Mangalam Timber Products Ltd, Cuttack V. ITO, Bhubaneswar

ITA 168/CTK/2011

• Counselvise Citation: 16822114 RSA 2011
• Duration Of Justice: 4 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-01-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHOVAN KRISHNA SAHU
• Assessee Lawyers: S N SAHU
• Keywords: Opportunity of being heard; Earning of tax free income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK B ENCH, CUTTACK , . . , BEFORE SHRI SUNIL KUMAR YADAV, JM & SHRI B.P.JAIN, AM ./ ITA NOS.168,169 & 170 /CTK/2011 ( ! ! ! ! / ASSESSMENT YEARS :2004-05, 2005-06 & 2007-08) M/S. MANGALAM TIMBER PRODUCTS LTD.,276, CUTTACK ROAD, RUCHIKA MARKET, LAXMI SAGAR, BHUBANESWAR. VS. ITO WARD 2(1), BHUBANESWAR ' ./ # ./ PAN/GIR NO.AABCM 5187 G ( '$ / APPELLANT ) .. ( %&'$ / RESPONDENT ) ( * * * * /ASSESSEE BY : SHRI S.N.SAHU * * * * /REVENUE BY : SHRI SHOVAN KRISHNA SAHU + ( / DATE OF HEARING : 18 TH MAY, 2015 -.! ( / DATE OF PRONOUNCEMENT 21 ST MAY,2015 / / / / / O R D E R PER B.P.JAIN, AM THESE THREE APPEALS OF THE ASSESSEE ARISE FROM THE COMMON ORDER OF THE LD CIT(A), BHUBANESWAR DATED 31.1.2011 FOR THE ASSE SSMENT YEARS 2004-05, 2005-06 & 2007-08, RESPECTIVELY. 2. THE LD COUNSEL FOR THE ASSESSEE HAS, IN FACT, PU RSUED ONLY GROUND NO.2 WITH REGARD TO THE DISALLOWANCE OF EXEMPT INCOME U/ S.10(1) OF THE ACT, WHICH IS IDENTICAL TO OTHER TWO ASSESSMENT YEARS UNDER CONSI DERATION. HOWEVER, FOR THE SAKE OF CONVENIENCE, WE REPRODUCE HEREINBELOW SAID GROUND NO.2 IN ITA ITA NOS.168,169 & 170 /CTK/2011 ASSESSMENT YEARS :2004-05, 2005-06 & 2007-08) 2 NO.168/CTK/2011 AND OUR ORDER HEREINBELOW SHALL BE APPLICABLE IDENTICALLY IN OTHER APPEALS MENTIONED HEREINABOVE: THAT THE FOLLOWING DISALLOWANCES CLAIMED AS EXEMPT U/S.10(1) HAVE BEEN ERRONEOUSLY UPHELD IN THE AFORESAID ORDER WHICH NEE DS TO BE REVERSED IN THE INTEREST OF EQUITY, JUSTICE AND FAIR PLAY: (A) RS.33,47,237/- FROM SALE OF TIMBER GROWN IN OWN PLANTATION AND USED IN OWN BUSINESS. (B) RS.24,01,137/- FROM SALE OF SEEDLINGS GROWN IN OWN PLANTATION AND USED IN OWN BUSINESS. (C) RS. 7,52,607/- FROM SALE OF TIMBER GROWN AND SOLD AS TIMBER. RS.65,00,981/- 3. THE BRIEF FACTS IN GROUND NO.2, THE ONLY GROUND WHICH HAS BEEN PURSUED BY THE LD COUNSEL FOR THE ASSESSEE FOR THE ASSESSME NT YEAR 2004-05, ARE THAT THE ASSESSEE HAS CLAIMED THE INCOME EXEMPT U/S.10(1 ) AS UNDER: I) PROFIT ON THE SALE OF SEEDLINGS : RS.24,01 ,137 II) PROFIT ON THE SALE OF PLANTATION : RS. 7,5 2,607 III) DIFFERENCE BETWEEN MARKET VALUE AND COST OF OWN PLANTATION (RS.80,80,580 MINUS RS.47,33,343) : RS.33,47 ,237 RS.65,00,981 4. THE ASSESSING OFFICER DID NOT ALLOW THE SAID AGR ICULTURAL INCOME OF RS.65,00,981/-AS EXEMPT U/S.10(1) OF THE ACT FOR TH E REASON THAT THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE CLAIM MAD E UNDER THE HEAD AGRICULTURAL INCOME AND THE ASSESSEE DID NOT SUBMIT ANY DETAILS . THE ASSESSEE CLAIMED THAT THE AGRICULTURAL INCOME HAS BEEN ALLOWED BY TH E ITAT IN EARLIER ASSESSMENT YEAR AND, ACCORDINGLY, THE CLAIM OF THE ASSESSEE SH OULD BE ALLOWED. AS REGARDS PROFIT FROM SEEDLING AND PROFIT FROM THE SALE OF PLANTATION ARE CONCERNED, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ONUS LIES ON THE ASSESSEE TO PROVE THAT IT HAS PERFORMED BASIC AS WELL AS SUBSEQ UENT AGRICULTURAL OPERATIONS ITA NOS.168,169 & 170 /CTK/2011 ASSESSMENT YEARS :2004-05, 2005-06 & 2007-08) 3 ON THE LAND WHILE GROWING THE PRODUCE. THERE IS N O EVIDENCE AVAILABLE ON RECORD TO SHOW THAT THE ASSESSEE HAS INDEED, DONE S O. MOREOVER, NO OTHER DOCUMENTS EVIDENCING THE SALE OF SEEDLINGS OR PLANT ATIONS HAS BEEN SUBMITTED EITHER ALONGWITH THE RETURN OF INCOME OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. MOREOVER, THE ASSESSING OFFICER OBSER VED THAT THE PROFITS FROM THE SAID HEADS WERE NOT THE MATTER OF DISCUSSION BEFORE THE ITAT IN ITS ORDER AS REFERRED TO HEREINABOVE. 5. THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESS ING OFFICER. 6. THE LD COUNSEL FOR THE ASSESSEE ARGUED THAT SIMI LAR CLAIM HAS BEEN ALLOWED BY THE ITAT IN THE CASE OF THE ASSESSEE IN THE EARLIER YEARS WHICH IS BINDING IN THE PRESENT APPEALS. HE RELIED ON THE V ARIOUS DECISIONS OF COURTS OF LAW IN THIS REGARD AS SUBMITTED BEFORE THE LD CIT(A ) ALSO. HE ALSO PRODUCED A CERTIFICATE OF THE TAHASILDAR, NABARANGPUR CERTIFYI NG THAT THE ASSESSEE IS CARRYING ON AGRICULTURAL OPERATION FOR GROWING TREE S LIKE EUCALYPTUS WHICH IS USED IN THEIR FACTORIES AS BASIC RAW MATERIAL FOR MANUFA CTURING OF MDF BOARDS FOR THE LAST 10 YEARS AND ALSO COPY OF MAP OF PLANTATIONS SITE IN ODISHA AND PHOTOGRAPHS OF AGRICULTURAL OPERATIONS. 7. ON THE OTHER HAND, LD D.R. RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW AND ARGUED THAT THE EVIDENCES SO PRODUCED BY THE LD COUNSEL FOR THE ASSESSEE ARE FRESH EVIDENCE AND CANNOT BE TAKEN ON RECORD. ITA NOS.168,169 & 170 /CTK/2011 ASSESSMENT YEARS :2004-05, 2005-06 & 2007-08) 4 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE C OULD NOT PRODUCE BEFORE THE AUTHORITIES BELOW ANY EVIDENCE OF ANY AGRICULTURAL OPERATION BEING CARRIED OUT BY THE ASSESSEE DURING THE IMPUGNED YEAR. EVEN BEFORE US, NO EVIDENCE WAS PRODUCED. NOTHING HAS BEEN POINTED OUT BY THE LD C OUNSEL FOR THE ASSESSEE WITH REGARD TO THE DECISION OF THE ITAT IN THE CASE OF T HE ASSESSEE ITSELF THAT THE CASE IS SQUARELY COVERED IN ASSESSEES FAVOUR. ALSO ON A QUERY FROM THE BENCH, THE ASSESSEE COULD NOT SUBMIT ANY REPLY WITH REGARD TO HOW THE SAID AGRICULTURAL LAND WAS ACQUIRED AND THE COPY OF LEASE DEED OR THE OWNERSHIP, ETC., IF ANY, WAS NOT BROUGHT TO OUR NOTICE. HOWEVER, THE LD COUNSEL FOR THE ASSESSEE HAS FURNISHED A CERTIFICATE FROM THE TAHASILDAR, NABARA NGAPUR, AS MENTIONED HEREINABOVE, ALONGWITH MAP OF PLANTATION SITES IN O DISHA AND PHOTOGRAPHS OF AGRICULTURAL OPERATIONS. ALTHOUGH THEY ARE FRESH E VIDENCES, BUT GOES TO THE ROOT OF THE MATTER AND, THEREFORE, REQUIRE FRESH EXAMINA TION WHETHER THE ASSESSEE IS ACTUALLY CARRYING ON THE AGRICULTURAL OPERATION, HOW AND WHETHER AGRICULTURAL PRODUCE IS ACTUALLY SOLD AND EVIDENCES IN THAT REGA RD HAVE TO BE EXAMINED. ACCORDINGLY, IN THE CIRCUMSTANCES AND FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, THE MATTER IS SET ASIDE AND RESTORED TO TH E FILE OF THE ASSESSING OFFICER WHO WILL EXAMINE THE ISSUE DENOVO AFTER AFFORDING A DEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE KEEPING INTO CONSIDERATION TH E FRESH EVIDENCES SUBMITTED BEFORE THE TRIBUNAL AS MENTIONED HEREINABOVE. 9. AS REGARDS OTHER ISSUES, AS ARGUED BY THE LD COU NSEL FOR THE ASSESSEE, ARE RELATED TO THE SAID AGRICULTURAL INCOME. WE TH EREFORE, SET ASIDE THE OTHER ISSUES AND RESTORE THE SAME TO THE FILE OF THE AO F OR DECIDING THE SAME DENOVO ITA NOS.168,169 & 170 /CTK/2011 ASSESSMENT YEARS :2004-05, 2005-06 & 2007-08) 5 AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, GROUNDS OF APP EAL TAKEN BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 10. NOW WE TAKE UP THE APPEALS OF THE ASSESSEE IN I TA NOS.169 & 170/CTK/2011 FOR THE ASSESSMENT YEARS 2005-06 & 200 7-08. 11. AS DISCUSSED HEREINABOVE, THE FACTS IN THE PRES ENT CASES ARE IDENTICAL TO THE FACTS FOR THE ASSESSMENT YEAR 2004-05 IN ITA NO .168/CTK/2011 AND, ACCORDINGLY, FOLLOWING THE SAME, WE SET ASIDE THE O RDERS OF THE LD CIT(A) FOR BOTH THE ASSESSMENT YEARS AND RESTORE THE ISSUES TO THE FILE OF THE AO FOR DECIDING THE SAME DENOVO AFTER AFFORDING ADEQUATE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. 12 IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 / 05/2015. SD/- SD/- ( ) (SUNIL KUMAR YADAV) ( . . ) (B.P.JAIN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 21/05/2015 B.K.PARIDA, SPS 1 11 1 1 11 1 1 11 1 ITA NOS.168,169 & 170 /CTK/2011 ASSESSMENT YEARS :2004-05, 2005-06 & 2007-08) 6 1 11 1 / / / / %( %( %( %( 3!( 3!( 3!( 3!( / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT : M/S. MANGALAM TIMBER PRODUCTS LTD.,276, CUTTACK ROAD, RUCHIKA MARKET, LAXMI SAGAR, BHUBANESWAR. 2. %&'$ / THE RESPONDENT. ITO WARD 2(1), BHUBANESWAR 3. 4 ( ) / THE CIT(A), BHUBANESWAR 4. 4 / CIT , BHUBANESWAR 5. 5 %( , , / DR, ITAT, CUTTACK 6. 7 8+ / GUARD FILE. &( %( //TRUE COPY// / / / / / BY ORDER, 9 99 9 / : : : : (ASSTT. REGISTRAR) 1111111 1111111 1111111 1111111 , / ITAT,CUTTACK 1