Sri.K.T.Ibrahim, Palakkad V. The ITO, Palakkad

ITA 172/COCH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7197 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-09-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 22-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Keywords: Additional evidence
• Section: 133A; 68

Judgement Text

1 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 172 TO 175/COCH/2014 & S.P. NOS 54 TO 57/COCH/2014 (ARISING OUT OF I.T.A NO. 172 TO 175/COCH/2014) (ASSESSMENT YEARS 2005-06 TO 2008-09) SHRI K.T. IBRAHIM M/S KTC VEGETABLES VS ITO, WD.2 MAIN ROAD, PATTAMBI (PO) PALAKKAD PALAKKAD PAN : ABCPI4255N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SIVDAS CHETTOOR RESPONDENT BY : SMT. LATHA V KUMAR DATE OF HEARING : 09-09-2014 DATE OF PRONOUNCEMENT : 12-09-2014 O R D E R PER N.R.S. GANESAN (JM) ALL THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAIN ST THE RESPECTIVE ORDER OF CIT(A) FOR THE ASSESSMENT YEARS 2005-06 TO 2008-09. SINCE COMMON ISSUE ARISES FOR CONSIDERATION, WE HEARD ALL THE APPEALS TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 2. SHRI SIVDAS CHETOOR, THE LD.REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A WHOLESALE DEALER I N VEGETABLES AND FRUITS. A SURVEY WAS CONDUCTED U/S 133A ON 17-01-2008 IN TH E PREMISES OF THE ASSESSEE. ACCORDING TO THE LD.REPRESENTATIVE FOR T HE ASSESSEE, DURING THE ASSESSMENT YEAR 2005-06 THE ASSESSEE INVESTED AN AM OUNT OF RS.1,06,500 ON PURCHASE OF LAND. THE ASSESSING OFF ICER ALSO FOUND THAT THE ASSESSEE HAS INVESTED ANOTHER SUM OF RS.1,07,00 0 FOR PURCHASE OF LAND AT MARUTHUR. AFTER ESTIMATING THE PERSONAL EX PENSES, IN THE ABSENCE OF ANY BOOKS OF ACCOUNT, THE INCOME WAS ADOPTED AT RS.2,73,500. ACCORDING TO THE LD.REPRESENTATIVE, THE INCOME FROM BUSINESS AND AGRICULTURE WAS NOT TAKEN INTO CONSIDERATION WHILE ESTIMATING THE INCOME. LIKEWISE, FOR THE ASSESSMENT YEAR 2006-07, THE ASSE SSING OFFICER ESTIMATED THE DIFFERENCE IN THE RETURNED INCOME ON THE EXPENDITURE AT RS.3,45,000. THE ASSESSING OFFICER MADE ADDITION O F RS.3,45,000. ACCORDING TO THE LD.REPRESENTATIVE, NO SUFFICIENT O PPORTUNITY WAS GIVEN TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS. THE ASSESSEE WAS UNDER THE BONA FIDE IMPRESSION THAT TH E ADDITION WAS MADE U/S 68 OF THE ACT. HOWEVER, AT A LATER STAGE, IT W AS FOUND THAT NO ADDITION WAS MADE U/S 68 OF THE ACT. THE ASSESSING OFFICER MADE THE ADDITION ONLY ON THE BASIS OF THE INVESTMENT AND THE ESTIMATION O F PERSONAL EXPENDITURE MADE BY THE ASSESSING OFFICER. THEREFORE, ACCORDIN G TO THE 3 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 LD.REPRESENTATIVE, THE ASSESSEE HAS TO EXPLAIN THE SOURCE OF INCOME FOR MAKING INVESTMENT IN THE LANDED PROPERTIES AND PERS ONAL EXPENDITURE. 3. FOR THE ASSESSMENT YEAR 2007-08, THE ADDITION MA DE BY THE ASSESSING OFFICER COMES TO NEARLY RS.3,12,000 AND F OR THE ASSESSMENT YEAR 2008-09 THE ADDITION WAS RS.16,10,342. THE LD .REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE WAS CULTIVATING ABOUT T WO ACRES OF AGRICULTURAL LAND. SINCE SUFFICIENT OPPORTUNITY WAS NOT GIVEN, ACCORDING TO THE LD.REPRESENTATIVE, THE INCOME FROM AGRICULTURE COUL D NOT BE EXPLAINED BEFORE THE ASSESSING OFFICER. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO EXPL AIN THE SOURCE FOR MAKING THE INVESTMENT AND FOR THE PERSONAL EXPENDIT URE THAT WAS ESTIMATED BY THE ASSESSING OFFICER. 4. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR S UBMITTED THAT THE ASSESSMENT ORDERS WERE PASSED ON 31-12-2010 AND THE FIRST APPELLATE AUTHORITY PASSED THE ORDERS ON 30-12-2013. THE ASS ESSEE HAD MORE THAN THREE YEARS. HOWEVER, NO MATERIAL WAS PRODUCED EVE N BEFORE THE CIT(A). THEREFORE, IT MAY NOT BE CORRECT TO SAY THAT THE AS SESSEE HAD NO OPPORTUNITY TO EXPLAIN THE SOURCE OF INCOME. THE L D.REPRESENTATIVE FURTHER SUBMITTED THAT THE SO-CALLED CONFIRMATION LETTERS S AID TO BE FILED BEFORE THE 4 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 ASSESSING OFFICER DOES NOT CONTAIN ANY DETAILS OF P AN. IT SIMPLY SAYS THAT AN AMOUNT IS OUTSTANDING FROM THE ASSESSEE. MOREOV ER, ACCORDING TO THE LD.DR, NO ADDITION WAS MADE ON CASH CREDIT. EVEN T HE AGRICULTURAL PROPERTY WAS PURCHASED IN THE YEAR 2005 AND THE SAME WAS NOT PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A). THEREFORE, AT THIS STAGE, ACCORDING TO THE LD.REPRESENTATIVE, THERE IS NO NEE D FOR REMANDING BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR REC ONSIDERATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE ASSESSEE WAS ENGAGED HIMSELF IN THE WHOLESALE SELLI NG OF VEGETABLE AND FRUIT. DURING THE COURSE OF SURVEY U/S 133A SOME I NVESTMENTS IN THE LANDED PROPERTY AND EXPENDITURE TOWARDS MARRIAGE AS ALSO INVESTMENT IN LIC POLICY WAS FOUND. THE ASSESSING OFFICER MADE A DDITION ON THE BASIS OF THE INVESTMENT, EXPENDITURE AND PAYMENTS ON THE INS URANCE POLICY, ETC. AFTER REDUCING THE INCOME DISCLOSED IN THE RETURNS FILED IN THE REGULAR COURSE. NOW THE ASSESSEE CLAIMS THAT THE ADDITION WAS MADE ONLY ON THE BASIS OF THE EXPENDITURE AND THE INVESTMENTS MADE B Y THE ASSESSEE AND NO ADDITION WAS MADE ON THE BASIS OF THE CREDIT FOU ND U/S 68 OF THE ACT. THEREFORE, THE CONFIRMATION LETTER FILED FROM THE C REDITOR MAY BE IRRELEVANT AT THIS STAGE. HOWEVER, THE ASSESSEE HAS TO EXPLAI N THE SOURCE FOR MAKING 5 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 INVESTMENT IN THE LANDED PROPERTY, EXPENDITURE LIKE MARRIAGE, PERSONAL DRAWINGS, PAYMENTS ON INSURANCE POLICY, ETC. THE A SSESSEE FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE SE EKING PERMISSION OF THE TRIBUNAL ON THE GROUND THAT TWO HECTARES AND 20.96 ARE LAND WAS PURCHASED AND IT WAS CULTIVATED. THE INCOME FROM A GRICULTURE IS ALSO AVAILABLE WITH THE ASSESSEE FOR INVESTMENT IN THE L ANDED PROPERTY FOR MEETING THE EXPENDITURE FOR MARRIAGE AND PAYMENT ON LIC POLICY. FROM THE AFFIDAVIT FILED BY THE ASSESSEE IT APPEARS THAT THE ASSESSEE PURCHASED AGRICULTURAL LAND ON 03-08-1998, 07-04-1999 AND 10- 01-2005. THEREFORE, IT IS NECESSARY TO FIND OUT WHETHER THE ASSESSEE CULTI VATED THE ABOVE SAID LAND AND RECEIVED ANY AGRICULTURAL INCOME. IF IT I S FOUND THAT THE ASSESSEE CULTIVATED LAND, THE INCOME GENERATED OUT OF CULTIV ATION WOULD ALSO AVAILABLE FOR MAKING INVESTMENT IN THE LANDED PROPE RTY AND FOR MEETING THE EXPENDITURE, ETC. APPARENTLY, THE ASSESSEE CONTEST ED THE PROCEEDINGS UNDER THE IMPRESSION THAT ADDITION WAS MADE U/S 68 BY FILING CONFIRMATION LETTER. ONLY WHEN THE PROCEEDINGS WERE PENDING BEF ORE THE CIT(A) IT WAS POINTED OUT THAT NO ADDITION WAS MADE U/S 68 AND WH AT WAS REQUIRED WAS TO EXPLAIN THE SOURCE FOR MAKING THE INVESTMENT AND EXPENDITURE, ETC. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT BOTH THE AUTHORITIES BELOW HAD NO OCCASION TO EXAMINE THE LA ND HOLDINGS OF THE ASSESSEE AND THE CULTIVATION SAID TO BE MADE BY THE ASSESSEE AND THE 6 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 POSSIBLE INCOME THAT WOULD HAVE BEEN GENERATED FROM CULTIVATION. INCOME- TAX PROCEEDINGS ARE ONLY TO ASSESS THE CORRECT TAXA BLE INCOME. MERELY BECAUSE THE ASSESSEE COULD NOT FILE CERTAIN DOCUMEN TS BEFORE THE LOWER AUTHORITIES ESPECIALLY WHEN THE AGRICULTURAL LAND W AS PURCHASED IN THE EARLIER ASSESSMENT YEARS, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE SAME CANNOT BE REASON FOR NOT GIVING AN OPPORTUNITY TO PRODUCE THE NECESSARY DOCUMENTS DURING THE PENDENCY OF THE PROC EEDING BEFORE THE APPELLATE AUTHORITIES. THE ASSESSEE SHALL BE GIVEN AN OPPORTUNITY TO PLACE THE MATERIAL BEFORE THE ASSESSING OFFICER REGARDING HOLDING OF THE LAND AND THE CULTIVATION THEREON. REJECTING THE CLAIM OF TH E ASSESSEE ON TECHNICALITY MAY NOT BE IN THE INTEREST OF JUSTICE. GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE MAY NOT PREJUDICE THE INTEREST OF THE REVE NUE IN ANY WAY. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIVING O NE MORE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE MATERIAL BEFORE THE ASS ESSING OFFICER WOULD DEFINITELY PROMOTE THE CAUSE OF JUSTICE. THE ASSES SING OFFICER CAN EXAMINE THE DOCUMENTS NOW FILED BEFORE THE TRIBUNAL AS ADDI TIONAL EVIDENCE ON MERIT AND ASSESS THE TAXABLE INCOME UNDER THE PROVI SIONS OF THE ACT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADDI TIONAL EVIDENCE FILED BY THE ASSESSEE HAS TO BE EXAMINED BY THE ASSESSING OF FICER AT THE FIRST INSTANCE. ACCORDINGLY, THE ORDERS OF THE LOWER AUT HORITIES ARE SET ASIDE AND THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER I S REMITTED BACK TO THE FILE 7 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 OF THE ASSESSING OFFICER FOR ALL THE ASSESSMENT YEA RS UNDER CONSIDERATION. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE ON THE BASIS OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE TH IS TRIBUNAL AND ANY OTHER MATERIAL THAT MAY BE PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THEREAFTER DECIDE THE ISSUE IN ACCORDAN CE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. THE STAY PETITIONS ARE NOT PRESSED BY THE LD.REP RESENTATIVE FOR THE ASSESSEE. AN ENDORSEMENT WAS ALSO MADE BY THE LD.R EPRESENTATIVE FOR THE ASSESSEE ON RECORD. MOREOVER, IN VIEW OF THE DISPO SAL OF THE APPEALS THE STAY PETITIONS BECOME INFRUCTUOUS. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED FOR STATISTICAL PURPOSE AND THE STAY PETITIONS ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH SEPTEMBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 12 TH SEPTEMBER, 2014 PK/- 8 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 COPY TO: 1. M/S KTC VEGETABLES, MAIN ROAD, PATTAMBI (PO), PA LAKKAD 2. THE ITO, WD.2, PALAKKAD 3. THE COMMISSIONER OF INCOME-TAX, CALICUT 4. THE COMMISSIONER OF INCOME-TAX(A)-V, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH 9 ITA NO. 172-175/COCH/2014 SP NOS 54-57/COCH/2014 1. DATE OF DICTATION : 09-09 2. DATE OF PLACING THE DRAFT ORDER BEFORE THE MEMBE R : 09-09 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.PS : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER: 5. DATE OF RETURN OF THE ORDER TO PS AFTER APPROVAL : 6. DATE OF PRONOUNCEMENT : 7. DATE ON WHICH THE FILE ALONG WITH THE ORDER SENT TO BC : 8. NO. OF PAGES OF DICTATION PADS ATTACHED TO THE F ILE : 10 9. NO. OF PAGES OF DRAFT COPY OF THE ORDER ATTACHED TO THE FILE :