Tripta Anand, Secunderabad V. ITO, Ward 11(4), Hyderabad

ITA 1688/HYD/2012

• Counselvise Citation: 168822514 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 14-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-11-2012
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Keywords: Business income; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO. 1688/HYD/2012 ASSESSMENT YEAR: 2009-10 TRIPTA ANAND HYDERABAD [PAN: AAKPA6914D] VS IN COME TAX OFFICER , WARD-11(4), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI PAWAN KUMAR CHAKRAPANI , AR FOR REVENUE : S HRI RA JAT MITRA , DR DATE OF HEARING : 14 - 0 5 - 201 5 DATE OF PRONOUNCEMENT : 20 - 05 - 2015 O R D E R PER SAKTIJIT DEY, J.M. : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 15-09-2012 OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)-VI, HYDERABAD FOR THE ASSESSMENT YEAR (AY) 2009-10. THE FIRST IS SUE RAISED BY THE ASSESSEE RELATES TO THE FINDING OF LD.CIT(A) THAT T HE RECEIPT FROM SALE OF SEEDS IS NOT AGRICULTURAL INCOME. 2. BRIEFLY THE FACTS RELATING TO THIS ISSUE ARE, AS SESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER CONSIDER ATION, ASSESSEE FILED HER RETURN OF INCOME ON 05-09-2009 DECLARING TOTAL INCOME AT RS. 1,94,900/-BESIDES AGRICULTURAL INCOME OF RS. 27,09, 018/-. WHILE EXAMINING THE AGRICULTURAL INCOME DECLARED BY THE A SSESSEE, IT WAS I.T.A. NO. 1688/HYD/2012 TRIPTA ANAND :- 2 -: FOUND BY THE ASSESSING OFFICER (AO) THAT ASSESSEE E XPORTS TOMATO SEEDS RECEIPTS FROM WHICH HAS BEEN TREATED AS 'AGRICULTUR AL INCOME'. WHEN THE ASSESSEE WAS CALLED UPON TO ESTABLISH THE AGRICULTU RAL INCOME, IT WAS SUBMITTED BY HER THAT SHE ALONG WITH HER HUSBAND, W HO IS A SCIENTIST, HAVE DEVELOPED HYBRID TOMATO SEEDS BY TAKING ON LEA SE AGRICULTURAL LANDS AT RANNEBUR, IN THE STATE OF KARNATAKA. SHE SUBMITTED THAT THE SAID SEEDS ARE EXPORTED TO CANADA. HENCE, THE INCO ME DERIVED IS DECLARED AS 'AGRICULTURAL INCOME'. WHEN THE AO CAL LED UPON THE ASSESSEE TO SUBMIT THE LEASE AGREEMENTS FOR THE LANDS CLAIME D TO HAVE BEEN TAKEN ON LEASE ALONG WITH OTHER DOCUMENTARY EVIDENCES IN SUPPORT OF HER CLAIM, AS OBSERVED BY THE AO, THE ASSESSEE SUBMITTE D A NOTE STATING THE METHOD OF PRODUCING HYBRID TOMATO SEEDS, THE AO ON PERUSING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ACTIV ITY UNDERTAKEN BY THE ASSESSEE CANNOT BE CONSIDERED AS AN AGRICULTURAL AC TIVITY SINCE SUCH ACTIVITY IS NOT UNDERTAKEN BY A NORMAL CULTIVATOR. HE FURTHER OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE TO SHOW THAT SHE HAS UNDERTAKEN THE AGRICULTURAL ACTIVITY. THE AO OBSER VED THAT THE BASIC ACTIVITY UNDERTAKEN BY THE ASSESSEE IS JUST PROCURI NG THE SEEDS FROM THE FARMERS AND SELLING THE SAME TO INTENDING BUYERS. AO OBSERVED THAT THE ENTIRE PAYMENTS HAVE BEEN MADE BY THE ASSESSEE TO A N AGENT. AO ALSO OBSERVED THAT ASSESSEE DOES NOT OWN ANY AGRICULTURA L LAND FOR CARRYING OUT SUCH ACTIVITY. HE OBSERVED, EVEN THE ASSESSEE FAILED TO FURNISH COPY OF A SINGLE LEASE AGREEMENT OF THE AGRICULTURAL LAN D. ON THE BASIS OF THE AFORESAID FACT, THE AO FINALLY CONCLUDED THAT THE A SSESSEE'S CLAIM OF AGRICULTURAL INCOME FROM SALE OF TOMATO SEEDS IS NO T ACCEPTABLE AND ACCORDINGLY TREATED THE AMOUNT OF RS. 27,09,018/- A S 'BUSINESS INCOME' OF THE ASSESSEE. BEING AGGRIEVED OF THE ADDITION M ADE, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY. AS FAR AS AO'S OBSERVATION THAT THE ACTIVITY OF CULTIVATING TOMATO SEEDS IN THE PARTICULAR METHOD ADOPTED CANNOT BE CONSIDERED TO BE A SIMPLE AGRICULTURAL I.T.A. NO. 1688/HYD/2012 TRIPTA ANAND :- 3 -: ACTIVITY, THE LD.CIT(A) DID NOT AGREE WITH THE SAME . HOWEVER, LD.CIT(A) ON THE BASIS OF MATERIAL AVAILABLE ON RECORD NOTED THAT THERE IS NO EVIDENCE SUBMITTED BY THE ASSESSEE TO ESTABLISH THA T SHE HAS TAKEN LAND ON LEASE NOR THERE IS ANY EVIDENCE TO INDICATE THAT ASSESSEE HAS CARRIED OUT THE AGRICULTURAL OPERATIONS. THE LD.CIT(A) OBS ERVED THAT THOUGH IT MAY BE A FACT THAT THE ASSESSEE MIGHT HAVE SUPPLIED THE SEEDS ETC., AND MAY HAVE BEEN DIRECTLY INVOLVED IN THE TECHNICAL AN D DAY TO DAY SUPERVISION OF THE AGRICULTURAL ACTIVITIES, BUT SHE COULD NOT ESTABLISH THAT THE AGRICULTURAL OPERATIONS WERE ACTUALLY CARRIED O N BY HER THROUGH HIRING OF LABOUR AND LEASE OF LAND. SHE OBSERVED T HAT THE FACTS ON RECORD, ON THE CONTRARY, INDICATE THAT THE RELATIONSHIP OF THE ASSESSEE WITH THE FARMERS WAS THAT OF A PURCHASER OF SEEDS WHICH IN T URN WERE EXPORTED TO CANADA. ACCORDINGLY, LD.CIT(A) REJECTED ASSESSEE'S CLAIM OF AGRICULTURAL INCOME. 3. LD. AR MORE OR LESS REITERATING THE SUBMISSIONS MADE BEFORE THE DEPARTMENTAL AUTHORITIES SUBMITTED THAT THE ASSESSE E HAS TAKEN LEASE OF AGRICULTURAL LAND FROM THE FARMERS AND CARRIED OUT AGRICULTURAL ACTIVITY OF GROWING TOMATO SEEDS ON THE SAID LAND HERSELF. THE REFORE, THE INCOME DERIVED FROM THE SALE/EXPORT OF SAID SEEDS HAS TO B E TREATED AS 'AGRICULTURAL INCOME'. LD. AR SUBMITTED, THOUGH IT IS A FACT THAT ASSESSEE HAS TAKEN ON LEASE THE AGRICULTURAL LAND FROM FARME RS, THERE IS NEITHER ANY LEASE AGREEMENT NOR CONFIRMATION GIVEN BY THE C ONCERNED FARMERS AS THE FARMERS ARE NOT WILLING TO EITHER ENTER INTO A LEASE AGREEMENT OR GIVE ANY CONFIRMATION. THE LD. AR SUBMITTED HOWEVER, IT IS A FACT THAT THE ASSESSEE HAS TAKEN LEASE OF AGRICULTURAL LANDS FROM A NUMBER OF FARMERS AND CARRIED OUT THE ACTIVITY OF GROWING TOMATO SEED S. IN THIS CONTEXT, HE REFERRED TO AN AFFIDAVIT OF THE ASSESSEE ACCOMPANIE D BY A LIST SHOWING THE DETAILS OF LAND CLAIMED TO HAVE BEEN TAKEN ON LEASE FROM FARMERS FOR THE AGRICULTURAL OPERATIONS. I.T.A. NO. 1688/HYD/2012 TRIPTA ANAND :- 4 -: 4. LD. DR ON THE OTHER HAND STRONGLY SUPPORTING THE ORDER OF THE FIRST APPELLATE AUTHORITY AND AO SUBMITTED BEFORE U S THAT, AT NO STAGE, THE ASSESSEE COULD FURNISH ANY EVIDENCE TO ESTABLIS H THE FACT THAT SHE HAS TAKEN LEASE OF AGRICULTURAL LANDS FOR CARRYING OUT AGRICULTURAL ACTIVITY. THEREFORE, SINCE THE MOST BASIC THING RE QUIRED FOR CONDUCTING AGRICULTURAL ACTIVITY IS NOT AVAILABLE WITH THE ASS ESSEE, THE CLAIM OF AGRICULTURAL INCOME CANNOT BE ACCEPTED. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY THOUGH THE A SSESSEE HAS CLAIMED THAT IT HAS TAKEN ON LEASE AGRICULTURAL LAND FROM A NUMBER OF FARMERS, BUT SHE HAS NOT BEEN ABLE TO PRODUCE A SINGLE PIECE OF EVIDENCE TO ESTABLISH SUCH CLAIM. NO LEASE DEED OR CONFIRMATIO N FROM A SINGLE FARMER HAS BEEN PRODUCED TO DEMONSTRATE THE FACT THAT THE ASSESSEE HAS TAKEN LEASE OF AGRICULTURAL LAND FROM FARMERS FOR CARRYIN G OUT THE SO CALLED AGRICULTURAL ACTIVITY OF GROWING TOMATO SEEDS. THE RE IS ALSO NO EVIDENCE ON RECORD THAT LEASE RENTS WERE PAID TO THE CONCERN ED PERSONS. ON THE CONTRARY, AS RIGHTLY OBSERVED BY LD.CIT(A), THE MAT ERIAL ON RECORD CLEARLY PROVE THAT THE ASSESSEE HAS PURCHASED SEEDS FROM TH E FARMERS, THOUGH, IT MAY BE A FACT THAT SUCH GROWING OF TOMATO SEEDS WAS CARRIED OUT ON THE TECHNICAL SUPERVISION OF THE ASSESSEE. HOWEVER , THAT DOES NOT TAKE AWAY FROM THE BASIC FACT THAT THE ACTUAL AGRICULTUR AL ACTIVITY WAS CARRIED ON BY THE FARMERS AND THE ASSESSEE MERELY PURCHASED THE SEEDS CULTIVATED BY THE FARMERS IN THE LAND OWNED BY THEM . AT NO STAGE, THE ASSESSEE HAS PROVEN THE FACT THAT AGRICULTURAL LAND WAS EITHER TAKEN ON LEASE BY THE ASSESSEE OR SHE HERSELF HAS CARRIED OU T THE AGRICULTURAL ACTIVITY EMPLOYING THE FARMERS OWNING SUCH AGRICULT URAL LAND OR BY EMPLOYING OUTSIDE LABOUR. BEFORE US, LD. AR FILED AN AFFIDAVIT OF ASSESSEE STATING THAT SHE HAS CONDUCTED THE CULTIVA TION ACTIVITY. A LIST HAS BEEN ENCLOSED TO THE AFFIDAVIT SHOWING THE NAME OF FARMERS AND I.T.A. NO. 1688/HYD/2012 TRIPTA ANAND :- 5 -: DETAILS OF LAND CLAIMED TO HAVE BEEN TAKEN ON LEASE . WE ARE UNABLE TO ACCEPT ASSESSEE'S CLAIM IN THE AFFIDAVIT FOR TWO RE ASONS, FIRSTLY BECAUSE NO SUCH AFFIDAVIT WAS FILED EITHER BEFORE THE AO OR BEFORE LD.CIT(A) AND SECONDLY BECAUSE WHEN A QUERY WAS MADE BY THE BENCH TO LD. AR, WHETHER THE ASSESSEE CAN PRODUCE ANY LEASE DEED OR CONFIRMATION FROM CONCERNED FARMERS OR AT LEAST CAN PRODUCE A FEW OF THE FARMERS TO PROVE THE FACT OF TAKING ON LEASE THEIR LAND FOR CULTIVAT ION PURPOSE, HE EXPRESSED INABILITY OF ASSESSEE TO DO SO AND REQUES TED THE BENCH TO DECIDE THE ISSUE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THEREFORE, WHEN ASSESSEE HAS FAILED TO BRING ANY CORROBORATIVE EVIDENCE ON RECORD TO PROVE THE FACT THAT ASSESSEE IS EITHER OWNING OR HAS TAKEN ON LEASE AGRICULTURAL LAND, WHICH IS THE BASIC REQUIREMENT F OR CARRYING OUT AGRICULTURAL ACTIVITY, THE AFFIDAVIT FILED IS MEREL Y A SELF SERVING DOCUMENT, HENCE, CANNOT BE TAKEN INTO COGNIZANCE. THEREFORE , CONSIDERING THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE HER CLAIM OF AGRICULTURAL INCOME WITH ADEQUATE SUPPORTING EVIDENCES, THE ASSESSMENT OF SAID INCOME UNDER THE HEAD 'BUSINESS' HAS TO BE UPHELD. ACCORD INGLY, THIS GROUND IS DISMISSED. 6. THE NEXT ISSUE RAISED IN GROUND NO. V AND VI REL ATES TO TREATING THE BREEDER SHED RENT AND FARM RENT AMOUNTING TO RS. 1, 52,569/- AND RS. 2,30,000/- RESPECTIVELY, AS 'INCOME FROM BUSINESS' INSTEAD OF 'INCOME FROM HOUSE PROPERTY'. DURING THE ASSESSMENT PROCEE DINGS, THE AO NOTICED THAT THE ASSESSEE WAS EARLIER ENGAGED IN TH E POULTRY FARMING BUSINESS. HOWEVER, DURING THE YEAR UNDER CONSIDERA TION, ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 1,52,569/- FROM M/S. VENK ATESHWARA HATCHERIES LIMITED TOWARDS BREEDER SHED RENT WHICH SHE FAILED TO DISCLOSE IN HER RETURN OF INCOME. THE AO THEREFORE TREATED THE RENT RECEIVED FROM M/S. VENKATESHWARA HATCHERIES LIMITED AS 'INCOME FROM BUSINESS'. THOUGH THE ASSESSEE BEFORE THE FIRST AP PELLATE AUTHORITY I.T.A. NO. 1688/HYD/2012 TRIPTA ANAND :- 6 -: SUBMITTED THAT THE RENT RECEIVED FROM THE BREEDER S HED SHOULD BE TREATED AS 'INCOME FROM HOUSE PROPERTY', BUT LD.CIT (A) REJECTED SUCH CLAIM OF THE ASSESSEE OBSERVING THAT THERE IS NO EV IDENCE SUBMITTED BY THE ASSESSEE TO SHOW THAT SHE HAS CLOSED DOWN HER P OULTRY BUSINESS. ACCORDINGLY, SHE HELD THAT THE RENT RECEIVED SHOULD BE TREATED AS 'INCOME FROM BUSINESS'. 7. AT THE TIME OF HEARING BEFORE US, LD. AR HAS NO T ADVANCED ANY SPECIFIC ARGUMENT ON THE AFORESAID ISSUES. HOWEVER , AFTER GOING THROUGH THE MATERIALS ON RECORD, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF LD.CIT(A) IN HOLDING THAT THE BREEDER SHED RENT OF RS. 1,52,569/- IS TO BE TREATED AS 'INCOME FROM BUSINESS' AS THE ASSESSEE H AS NOT PROVED THE FACT THAT SHE HAS CLOSED DOWN HER POULTRY BUSINESS. AS FAR AS THE AMOUNT OF RS. 2,30,000/- IS CONCERNED, ON PERUSAL OF ASSESSME NT ORDER, WE FIND THAT THERE IS NO SUCH ADDITION MADE BY THE AO. BEF ORE US ALSO THE ASSESSEE HAS NOT ADVANCED ANY ARGUMENT ON THE ISSUE . ACCORDINGLY, GROUND RAISED IS DISMISSED. 8. IN THE RESULT, ASSESSEE'S APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 20 TH MAY, 2015. SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 20 TH MAY, 2015 TNMM I.T.A. NO. 1688/HYD/2012 TRIPTA ANAND :- 7 -: COPY TO : 1. TRIPTA ANAND, C/O. V.M. CHAKRAPANI & CO., CHARTE RED ACCOUNTANTS, 5-5-8/9 & 10, II FLOOR, SRINIVASA BUIL DING, RANIGUNJ, SECUNDERABAD. 2. THE INCOME TAX OFFICER, WARD-11(4), HYDERABAD. 3. CIT(APPEALS)-VI, HYDERABAD. 4. CIT-V, HYDERABAD. 5. D.R. ITAT, HYDERABAD