Shri Rajendra Prahlad Ghute, Satara V. DCIT, Satara

ITA 1654/PUN/2012

• Counselvise Citation: 165424514 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-10-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 08-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1654/PN/2012 (ASSESSMENT YEAR: 2004-05) SHRI RAJENDRA PRALHAD GHUTE, PUNE BANGALORE ROAD, AT POST UMBRAJ, TAL: KARAD, DIST: SATARA PAN: ABDPG6378F . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA . RESPONDENT APPELLANT BY : SHRI C.H. NANIWADEKAR RESPONDENT BY : SHRI P.S. NAIK DATE OF HEARING : 28-10-2014 DATE OF PRONOUNCEMENT : 30-10-2014 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF C IT(A)- III, PUNE DATED 31-05-2011 RELATING TO ASSESSMENT YEAR 2004-05 AGAINST ORDER PASSED U/S.143(3) OF THE INCOME-TAX ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD.CIT(APPEALS) ERRED IN UP-HOLDING THE ADDITION OF RS.4,00,000/- MADE BY THE ASSESSING OFFICER BY WAY OF DISALLOWANCE OF AGRICULTURAL INCOME, REJECTING THE SALE PROCEEDS OF GINGER GROWN TO THAT EXTENT 2. THE LD. CIT(APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS. 30,000/- MADE BY THE ASSESSING OFFICER BY WAY DISALLOWA NCE OF RS.30,000/- OUT OF THE EXPENDITURE FOR TRANSPORT BUS INESS DONE BY THE APPELLANT. 3. THE REASONS GIVEN BY THE LD. CIT(APPEALS) FOR CONFIRM ING AND UP- HOLDING THE ABOVE TWO ADDITIONS ARE CONTRARY TO TH E FACTS AND THE LAW. ITA NO. 1654/PN/2012 SHRI RAJENDRA PRALHAD GHUTE 2 4. THE APPELLANT PRAYS THAT THE ADDITIONS MADE OF RS.4,00,00 0/- & OF RS.30,000/- BE DELETED. 5. THE APPELLANT CRAVES LEAVE TO AMEND/MODIFY ANY OF THE ABOVE GROUNDS AND TO TAKE ANY ADDITIONAL GROUNDS, IF FOUND NECESSARY. 3. THE ISSUE RAISED VIDE GROUND NO.1 IS AGAINST THE ADDIT ION OF RS.4,00,000/- ON ACCOUNT OF DISALLOWANCE OF AGRICULTURAL INCOME. 4. THE BRIEF FACTS OF THE CASE ARE THAT, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN INCOME FROM ITS PRO PRIETARY TRANSPORT BUSINESS AND ALSO AS PARTNER IN A REGISTERED FIRM. FURTHER, THE ASSESSEE HAD SHOWN AN AGRICULTURAL INCOME OF RS.19,5 5,266/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESS ING OFFICER MADE ENQUIRIES IN RELATION TO THE AGRICULTURAL OPERATIONS CA RRIED ON BY THE ASSESSEE. THE REQUISITE DETAILS WERE CALLED FOR AND AS SESSING OFFICER NOTED THAT THE AGRICULTURAL EXPENSES WERE ON ACCO UNT OF FERTILIZERS, LABOUR, PURCHASE OF SEEDS, ETC. THE ASSESSING O FFICER FURTHER NOTED THAT IN THE EARLIER YEARS AS WELL AS IN SUB SEQUENT YEARS, THERE WAS NO SUBSTANTIAL AGRICULTURAL INCOME. SUMMONS UND ER SECTION 131(1) OF THE ACT OF THE ACT WERE ISSUED TO VARIO US PERSONS I.E. THE LABOUR SUPPLIER, SUPPLIER OF SEEDS OF GINGER, SUPPLIER OF FER TILIZERS AND HIRE CHARGES FOR BULLOCK CART. THE ASSESSING OFFICER ALS O ISSUED SUMMONS UNDER SECTION 131(1) OF THE ACT TO THE SUPPLIER OF SEEDS & FERTILIZERS AND ALSO TO THE PARTNER OF FIRM M/S.GANESH RANGN ATH SHEDGE & CO., PUNE TO WHOM ENTIRE GINGER WAS SUPPLIED BY THE ASSESSEE FOR SALE. THE STATEMENTS OF THE SAID PERSONS WERE RECORDED UNDER SECTION 131 OF THE ACT AND ON THE EXAMINATION OF D ETAILS FILED BY THE SAID PERSON, THE ASSESSING OFFICER WAS OF THE VIEW THAT SERVICES TO THE EXTENT CLAIMED BY THE ASSESSEE WERE NOT RENDERED BY THE SAID PERSONS. IN THE STATEMENT RECORDED OF SHRI GANESH R. S HEDGE, PARTNER ITA NO. 1654/PN/2012 SHRI RAJENDRA PRALHAD GHUTE 3 OF M/S. GANESH RANGNATH SHEDGE & CO., THROUGH WHOM THE SALE OF GINGER WAS MADE, THE ASSESSING OFFICER NOTICED THAT HE ADM ITS TO HAVE RECEIVED GINGER BY TRUCKS THROUGH THE DRIVERS WHO IN TU RN STATED THAT THE GINGER BELONGED TO THE ASSESSEE. THE ASSESSING OFFICE R IN VIEW OF THE VARIOUS QUERIES PUT TO THE SAID PERSONS, OBSERVED HOWEVER, SHRI SHEDAGE COULD NOT STATE AS TO WHETHER THE GINGER REC EIVED IN HIS SHOP THROUGH TRUCK DRIVERS WERE AT ALL BELONGED TO THE AGRI CULTURAL PRODUCE OF SHRI RAJENDRA P. GHUTE. THE ASSESSING OFFICER FURTHER NOTED THAT DEMAND DRAFTS WERE PREPARED IN THE NAMES OF THE PERSON S WHO WERE OWNERS OF THE GOODS. THE ASSESSING OFFICER FURTHER OBSERV ED THAT ALTHOUGH THE DEMAND DRAFTS WERE ISSUED BY THE AFORESAID FIRM IN THE NAME OF THE ASSESSEE, BUT THE COMMISSION AGENT THROUGH WHOM THE GINGER WAS SOLD COULD NOT PROVE AS TO GOODS BELONGED TO THE ASSESSEE OR NOT. THE PLEA OF THE ASSESSEE THAT HE HAD EARNED AGRICULTURAL INCOME FROM THE SALE OF THE AGRICULTURAL PRODUCE WHICH IN TU RN WAS SUPPLIED AND SOLD THROUGH M/S. GANESH R. SHEDGE & CO. WA S NOT ACCEPTED BY THE ASSESSING OFFICER IN ENTIRETY. THE ASSESS ING OFFICER WAS OF THE VIEW THAT THE ASSESSEE EARNED AGRICULTURAL INC OME TO THE EXTENT OF RS.15,55,266/- AND THE BALANCE SUM OF RS.4,00,00 0/- WAS TREATED AS INCOME FROM OTHER SOURCES. 5. THE CIT(A) VIDE PARA 2.3 HAS TABULATED THE AGRICULTURAL LAND HOLDING OF THE ASSESSEE AND THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AND THE AGRICULTURAL EXPENSES CLAIMED BY THE AS SESSEE. THE CIT(A) FURTHER NOTED THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SHOWN AGRICULTURAL INCOME OF RS.19,55,266/ - AS AGAINST AGRICULTURAL INCOME SHOWN AT RS.8,43,628/- IN ASSES SMENT YEAR 2001-02, RS.80,442/- IN ASSESSMENT YEAR 2002-03 A ND LOSS OF RS.80,442/- IN ASSESSMENT YEAR 2003-04. THE CIT(A) COLLEC TED CERTAIN ITA NO. 1654/PN/2012 SHRI RAJENDRA PRALHAD GHUTE 4 INFORMATION FROM THE WEB AND WAS OF THE VIEW THAT THERE W AS NO POSSIBILITY OF PRODUCING GINGER TO THE EXTENT CLAIMED BY THE ASSESSEE FROM HIS LAND HOLDING. IN VIEW THEREOF, THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER AND CONFIRMED THE ADDITION OF RS.4,00,000/-. 6. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF TH E CIT(A). THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE TOTAL LAND HOLDING OF THE ASSESSEE WAS 78.5 GUNT AS. IT WAS FURTHER POINTED OUT BY THE LEARNED AUTHORIZED REPRESENT ATIVE FOR THE ASSESSEE THAT DURING THE PRECEDING YEARS, THE ASSESSEE WAS ENGAGED IN THE CROP OF POTATO, HOWEVER, IN ASSESSMENT YEAR 2003-04 , HE PLANTED GINGER IN HIS FIELDS AND IN ASSESSMENT YEAR 2004-05, THE SA ID GINGER WAS SOLD AS AN AGRICULTURAL PRODUCE AND THE INCOME THERE FROM WAS HIGHER THAN FROM THE SALE OF POTATO CROP. FURTHER, OUR A TTENTION WAS DRAWN TO THE STATEMENT OF SHRI GANESH R. SHEDGE RECORD ED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH IS PLACED AT PAGE S 37 ONWARDS OF THE PAPER BOOK AND IT WAS POINTED OUT BY TH E LEARNED AUTHORIZED REPRESENTATIVE THAT THE SAID PERSON HAD CLE ARLY ADMITTED THAT THE AGRICULTURAL PRODUCE WAS SOLD THROUGH HIM. FURT HER, DURING THE COURSE OF HEARING, THE LEARNED AUTHORIZED REPRESENTA TIVE FOR THE ASSESSEE SUBMITTED THE VARIOUS BILLS ISSUED BY THE SAID CO NCERN AND POINTED OUT THAT THE PAYMENT IN RESPECT OF SALE OF GINGER WAS RECEIVED VIDE DEMAND DRAFTS. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLA CED RELIANCE ON THE ORDER OF CIT(A). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE ADMITTEDLY, IS HOLDING CERTAIN LAND WHICH IS PU T TO ITA NO. 1654/PN/2012 SHRI RAJENDRA PRALHAD GHUTE 5 AGRICULTURAL OPERATIONS BY THE ASSESSEE. THE FACTUM OF AG RICULTURAL ACTIVITY CARRIED ON BY THE ASSESSEE IS NOT DISPUTED BY E ITHER OF THE AUTHORITIES BELOW. THE ONLY ISSUE ARISING BEFORE US IS WHET HER THE QUANTUM OF THE AGRICULTURAL INCOME DECLARED BY THE ASSESS EE IS ARISING FROM THE SAID AGRICULTURAL OPERATIONS. THE ASSESSEE CLAIME D THAT DURING THE YEAR UNDER CONSIDERATION, IT HAD SOLD GINGER (A GRICULTURAL PRODUCE) AND HAD DECLARED AGRICULTURAL INCOME OF RS.19,55,266/-. T HE SAID AGRICULTURAL PRODUCE WAS SOLD THROUGH ONE SHRI GANES H R. SHEDGE & CO., WHO WAS COMMISSION AGENT. THE RELEVANT BILLS RELATING TO THE SALE OF AGRICULTURAL PRODUCE ARE PLACED ON RECORD AND ADMITTEDLY, THE ASSESSEE RECEIVED THE SAID CONSIDERATION VIDE DEMAND DRAFTS FROM THE SAID PERSON. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER MADE ENQUIRIES AND STATE MENT OF PARTNER SHRI GANESH R. SHEDGE WAS RECORDED, WHO ADMITTE D THAT HE HAD RECEIVED AGRICULTURAL PRODUCE THROUGH THE DRIVERS OF VARIOUS TRUCKS FROM THE ASSESSEE AND THE SAME WAS SOLD BY HIM AND THE PAYMENT AGAINST THE SALE PROCEEDS WERE MADE BY DEMAND DRAFTS. ONE QUERY PUT BY THE ASSESSING OFFICER WAS AS TO HOW DOES H E KNOW THAT THE TRUCKS CARRYING THE GOODS ON BEHALF OF THE ASSESSEE ACTUALLY BELONGED TO THE ASSESSEE. IT IS UNDISPUTED THAT TOTAL S ALE PROCEEDS AGAINST THE SALE OF AGRICULTURAL PRODUCE HAVE BEEN RECEIVE D BY THE ASSESSEE FROM ONE CONCERN AND THAT ALSO THROUGH DEMAN D DRAFTS. FURTHER, THE ASSESSING OFFICER AND THE CIT(A) HAVE ACCEPTE D THE AGRICULTURAL INCOME TO THE EXTENT OF RS.15,55,266/- AND MA DE ADDITION OF RS.4,00,000/- ONLY. THE ASSESSEE HAS SUFFICIENT LAND HOLDIN G TO JUSTIFY THE AGRICULTURAL INCOME SHOWN IN HIS HANDS AND IN VIEW OF THE VARIOUS EVIDENCES COLLECTED BY ASSESSING OFFICER HIMSELF DURIN G THE ASSESSMENT PROCEEDINGS, WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITIES BELOW IN HOLDING THAT THE INCOME TO THE EXTEN T OF ITA NO. 1654/PN/2012 SHRI RAJENDRA PRALHAD GHUTE 6 RS.4,00,000/- WAS NOT AGRICULTURAL INCOME. REVERSING THE OR DER OF CIT(A), WE DIRECT THE ASSESSING OFFICER TO INCLUDE THE BALANC E INCOME OF RS.4,00,000/- AS AGRICULTURAL INCOME IN HANDS OF THE ASSESSE E FOR RATE PURPOSES. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSES SEE IS THUS, ALLOWED. 9. GROUND NO.2 RAISED BY THE ASSESSEE IS NOT PRESSED A ND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2014. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 30 TH OCTOBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE