AMRITA RAMESH KASBEKAR, MUMBAI V. ACIT 22(1), MUMBAI

ITA 1689/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0515 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 20-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL DESH
• Assessee Lawyers: NITIN JOSHIAR
• Keywords: Assessment record; Onus to prove; Futures and options; Set aside
• Section: 143(3); 142(1); 12A; 250; 143(2); 13; 119; 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 1689/MUM/2019 ( ASSESSMENT YEARS: 2012-13 ) AMRITA RAMESH KASBEKAR 12A ANMOL, 13 TH ROAD, KHAR WEST, MUMBAI 400052 / VS. ACIT 22(1) R.NO. 322, 3 RD FLOOR, PIRAMAL CHAMBERS, LAL BAUG PAREL, MUMBAI ./ ./ PAN/GIR NO. : AMVPK2385B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI NITIN JOSHI,AR / RESPONDENT BY : SHRI SUNIL DESHPANDE, DR / DATE OF HEARING 07/12/2020 !'# / DATE OF PRONOUNCEMENT 22/12/2020 / O R D E R PER PAVAN KUMAR GADALE - JM: THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -34, MUMBAI, PASSED U/S. 143(3) AND 250 OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND CIT(A) ERRED IN CONFIRMING THE ADDITION MA DE BY ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 2 - THE A.O U/S 68 OF THE ACT IN RESPECT OF ALLEGE UNEX PLAINED CASH DEPOSITS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW CIT(A) ERRED IN UPHOLDING THE ACTION OF THE A.O IN TREATING THE AGRICULTURAL INCOME OF RS. 3,98,939 CL AIMED AS EXEMPT U/S 10(1) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE IS ENGAGED IN THE BUSINESS OF DEALING IN DERIVATIVE S, FUTURES AND OPTIONS AND DERIVES INCOME FROM AGRICULTURAL ACTIVITIES OF GROWING FLOWERS. THE ASS ESSEE FILED THE RETURN OF INCOME FOR THE A.Y 2012-13 ON 29.09.2012 DECLARING TOTAL INCOME OF RS. (-) 50,95,548/-. SUBSEQUENTLY, THE CASE WAS SELECTED FO R SCRUTINY UNDER CASS AND NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE, THE LD . AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED THE DETAILS. THE ASSESSING OFFICER (A.O) BASED ON THE AIR INFORMATION, FOUND THAT THE ASSESS EE HAS MADE CASH DEPOSITS OF RS. 18,50,000/- IN THE BANK ACCOUNT MAINTAINED WITH ICICI BANK AS UNDER: 22.07.2011 - 5,00,000 03.08.2011 - 1,00,000 15.09..2011 - 4,50,000 18.10.2011 - 5,00,000 21.12.2011 - 3,00,000 ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 3 - 2.1 THE ASSESSEE VIDE LETTER DATED 05.02.2015 HAS DISCLOSED THE RECEIPTS OF RS. 19, 00,461/-AS SALE PROCEEDS FROM AGRICULTURAL PRODUCTS AND CASH ON HAND OF RS.7,90,880/-. THE CONTENTIONS ARE THAT TH E ABOVE AMOUNTS HAVE BEEN UTILIZED FOR THE DEPOSITS I N ICICI BANK AGGREGATING TO RS. 18,50,000/-. FURTHER , THE A.O FIND THAT THE ASSESSEE HAS DISCLOSED THE AGRICULTURAL INCOME OF RS.3,98,939/- IN THE RETURN OF INCOME AND CLAIMED EXEMPTION U/S 10(1) OF THE ACT. THE A.O ON PERUSAL OF THE PROFIT AND LOSS ACCOUNT FOUND THAT THE ASSESSEE HAS DISCLOSED RS. 18, 21,062/- AS AGRICULTURAL RECEIPTS OUT OF THE SALE O F FLOWERS AND ROSES. THE ASSESSEE WAS FURTHER CALLED FOR THE DETAILS IN SUPPORT OF THE AGRICULTURAL RECEIPTS WITH SALE BILLS AND EXPENSES CLAIMED. THE ASSESSEE HAS FILED THE DETAILS ON 02.03.2015 REFERRED AT PARA 4. 3 OF THE ORDER EXPLAINING THE NATURE OF HOLDING OF AGRICULTURAL LANDS. THE AGRICULTURAL ACTIVITIES ARE CONDUCTED BY THE ASSESSEES FAMILY IN THE NAME OF M/S SANKALP FARMS. BUT THE A.O FOUND THE EXPLANATIONS OF THE ASSESSEE ARE NOT SATISFACTORY I N RESPECT OF CASH DEPOSITS MADE OUT OF SALE OF AGRICULTURAL PRODUCTS. FURTHER ON VERIFICATION OF BILLS ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 4 - AND VOUCHERS M/S. SANKALP FARMS NAME IS MENTIONED, WHERE THE ASSESSEE IS A PARTNER. THE A.O OBSERVED THAT THERE IS NO AGRICULTURAL ACTIVITY CAR RIED OUT BY THE ASSESSEE AND COULD NOT SUBSTANTIATE THE INCOME. FURTHER THE SUBMISSIONS OF THE ASSESSEE ARE THAT THE EXPENDITURE HAS BEEN PROPORTIONATELY ALLOCATED TO THE ASSESSEE ON THE BASIS OF LAND SHAR ING RATIO. THE ASSESSEE HAS NOT DISCHARGED THE BURDEN OF PROOF WITH EVIDENCES IN RESPECT OF GENERATION OF TH E RECEIPTS FROM THE AGRICULTURAL ACTIVITIES AND ALSO EXPENDITURE INCURRED FOR THE PURPOSE OF CULTIVATION . THEREFORE, THE A.O. IS OF THE OPINION THAT THE CASH DEPOSITS IN THE ICICI BANK ACCOUNT ARE UNEXPLAINED AND MADE ADDITION U/S 68 OF THE ACT AND THE AGRICULTURAL INCOME AS NOT GENUINE AND ASSESSED THE TOTAL INCOME OF RS. 32,45,550/- AND PASSED THE ORDE R U/S 143(3) OF THE ACT ON 23.02.2015. 3. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED A N APPEAL WITH THE CIT(A.) IN APPELLATE PROCEEDINGS LD . CIT(A) CONSIDERED THE GROUNDS OF APPEAL, WRITTEN SUBMISSIONS OF THE ASSESSEE AND EVIDENCES FILED IN SUPPORT OF LAND HOLDING BY THE ASSESSEE. THE LD.CIT (A) OBSERVED THAT THE ASSESSEE HAS DISCLOSED THE ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 5 - AGRICULTURAL INCOME OF RS. 3,98,939/- AND CLAIMED EXEMPTION U/S 10(1) OF THE ACT. THE ASSESSEE COULD NOT ESTABLISH THE GENUINENESS OF THE AGRICULTURAL INCOME AS THE BILLS AND VOUCHERS ARE IN THE NAME OF M/S SANKALP FARMS. FURTHER, THE AGRICULTURAL INCOME AS SOURCE FOR THE CASH DEPOSITS IN THE ICICI BANK ACCOUNT OF RS. 18,50,000/-IS NOT ACCEPTED AS THERE IS NO NEXUS BETWEEN THE DEPOSITS AND CASH GENERATED THROUGH AGRICULTURAL ACTIVITIES. FINALLY, LD. CIT(A ) FIND THE A.O ACTION IS TENABLE AND CONFIRMED THE ADDITIO N AND DISMISSED THE ASSESSEE APPEAL. AGGRIEVED BY TH E CIT(A) ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE SUBMITTED THAT THE CIT(A) HAS ERRED IN CONFIRMING T HE ACTION OF THE A.O IN DISBELIEVING THE AGRICULTURAL INCOME SOURCES GENERATED OUT OF THE AGRICULTURAL L AND HOLDINGS. FURTHER, THE LD.AR SUBMITTED THAT THE ASSESSEE ALONG WITH HER FAMILY MEMBERS ARE ENGAGED IN THE BUSINESS OF GROWING FLOWERS AND THE NAME OF THE M/S SANKALP FARMS HAS BEEN USED FOR THE BRAND PROMOTION AND SUBSTANTIATED HIS SUBMISSIONS WITH THE PAPER BOOK. FURTHER, THE LD.AR, EMPHASIZED THAT ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 6 - THE ASSESSEE IS REGULARLY FILING THE RETURN OF INCO ME DISCLOSING AGRICULTURAL INCOME BUT IN THE PRESENT ASSESSMENT YEAR, THE A.O HAS TREATED AGRICULTURE INCOME AS NON GENUINE AND REFERRED TO THE APPORTIONMENT OF INCOME STATEMENT OF FAMILY AND PRAYED FOR ALLOWING THE APPEAL. 5. CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD. AR EMPHASIZED THAT THE A.O AND CIT(A) HAVE ERRED IN DENYING THE SOURCES OF AGRICULTURAL INCOME GENERATED OUT OF THE AGRICULTUR E ACTIVITIES. THE ASSESSEE AND HER FAMILY MEMBERS ARE PARTNERS IN M/S SANKALP FARMS AND THE BRAND NAME OF THE FIRM IS USED BY THE FAMILY MEMBERS FOR ALL AGRICULTURAL OPERATIONS . EVEN IN ASSESSEES CASE, THE RECEIPTS ARE IN THE NAME OF THE M/S SANKALP FARMS, THE LD. AR REFERRED TO PAGE 29 TO 36 OF THE PAPER B OOK IN RESPECT OF SAMPLE COPIES OF BILLS FOR SALE OF F LOWERS AND AT PAGE 37 TO 79, LEDGER ACCOUNT OF EXPENSES ALONG WITH SAMPLE COPIES OF BILLS. WHEREAS, THE EXPENDITURE INCURRED IS IN THE NAME OF M/S SANKALP ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 7 - FARMS. THERE IS NO DOUBT ON THE GENUINENESS OF PURCHASE OF AGRICULTURAL LANDS BUT THE ONLY DOUBT THE A.O HAS RAISED IN THE ASSESSMENT PROCEEDINGS THAT T HE ASSESSEE COULD NOT SUBSTANTIATE THE AGRICULTURAL ACTIVITIES WITH EVIDENCES. THE LD. AR REITERATED T HE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND EXPLAINED THAT THE ASSESSEE HAS ACQUIRED THE AGRICULTURAL LANDS IN APRIL 2007 AND CONSTRUCTED POLYHOUSE BY OBTAINING LOAN FROM SYNDICATE BANK. THE ASSESSEE CARRIED OUT THE ACTIVITIES OF GROWING ROSES AND GERBERA. THE ASSESSEE IS A PARTNER IN M/S SANKALP FARM, WHICH IS A FAMILY MANAGED PARTNERSHIP FIRM CARRYING ON THE AGRICULTURAL ACTIVITIES FROM T HE YEAR 2003 AND EACH MEMBER OF THE FAMILY ALSO OWNED AGRICULTURAL LANDS AND WAS CARRYING ON THE AGRICULTURAL OPERATIONS. THE BRAND NAME OF M/S SANKALP FARM HAS BEEN USED AND THE INCOME AND EXPENSES ARE ROUTED THROUGH PARTNERSHIP FIRM AND SUBSEQUENTLY APPORTIONED BETWEEN THE FAMILY MEMBERS. THERE IS NO DIRECT EXPENDITURE INCURRED BY THE ASSESSEE AND THE EXPENSES HAVE BEEN APPORTIONED BASED ON THE LAND HOLDING REFERRED AT PAGE 119 OF T HE PAPER BOOK. THE LD. AR REFERRED TO THE FLOWER ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 8 - PHOTOGRAPHS AND PAGE 133 OF THE PAPER BOOK, RELEVAN T TO THE A.Y 2012-13 WHERE THE INCOME HAS BEEN AGRICULTURAL INCOME APPORTIONED BETWEEN THE PARTNER S AND M/S SANKALP FARM. THE LD. AR DEMONSTRATED THE INCOME TAX RETURNS FILED FOR THE EARLIER ASSESS MENT YEARS 2010-11 AND 2011-12, WHERE THE SHARE OF PROFI T OF PARTNERSHIP FIRM AND THE AGRICULTURAL INCOME WAS DISCLOSED. FURTHER FOR THE A.Y 2009-10, THE CASE WA S SELECTED FOR SCRUTINY AND ORDER U/S 143(3) OF THE A CT WAS PASSED THE LD. AR ALSO DEMONSTRATED THE FINANCIAL STATEMENTS OF M/S SANKALP FARMS AT PAGE 1 7 TO 23 OF THE PAPER BOOK. CONSIDERING THE OVERALL FA CTS AND THE EVIDENCES FILED AS REITERATED BY THE LD. AR , THE INFORMATION SUBMITTED BY THE ASSESSEE CANNOT BE DISBELIEVED. BUT THE FACT REMAINS THOUGH THE ASSESS EE HAS FILED THE DETAILS, THERE ARE NO OBSERVATIONS O F THE A.O NOR THE ASSESSEE COULD EXPLAIN THAT THE EXPENSE S AND INCOME ALLOCATED TO THE ASSESSEE SHARE ARE NOT CONSIDERED IN THE M/S SANKALP FARM. FURTHER, THE ASSESSMENT RECORDS OF M/S SANKALP FARMS ARE NOT AVAILABLE WITH THE A.O. THEREFORE, TO MEET THE END S OF JUSTICE, WE PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO ESTABLISH AND CLARIFY THE INCOME GENERA TED ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 9 - IN AGRICULTURAL ACTIVITIES AND THE EXPENSES INCUR RED ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) A ND REMIT THE ENTIRE DISPUTED ISSUES TO THE FILE OF ASSESSING OFFICER FOR LIMITED PURPOSE TO VERIFY AND EXAMINE THE CLAIMS. IT IS NEVERTHELESS TO MENTION T HAT THE ASSESSEE SHOULD BE PROVIDED WITH ADEQUATE OPPORTUNITY OF HEARING AND SHALL COOPERATE IN FURNISHING THE INFORMATION AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22.12.2020 SD-/ SD/- (PRAMOD KUMAR) (PAVAN KUMAR GADALE ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI, DATED 22/12/2020 KRK, PS ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 10 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / THE CIT(A) 4. ) ( ) / CONCERNED CIT 5. ,-. //'( , '(# , & / DR, ITAT, MUMBAI 6. .34 5 / GUARD FILE. / BY ORDER, , / //TRUE COPY// 1. / ( ASST. REGISTRAR) !' #, / ITAT, MUMBAI ITA NO . 1689 /MUM/2019 AMRITA RAMESH KASBEKAR, MUMBAI. - 11 - DATE INITIAL 1. DRAFT DICTATED ON 10 .1 2 .2020 PS 2. DRAFT PLACED BEFORE AUTHOR 10.12.2020 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER PS 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. PS 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 11. DICTATION PAD IS ENCLOSED 2. OTHER MEMBER ON WHICH THE