D.C.I.T, Cir-3 Kolkata, Kolkata V. Shri Damanjit Singh Grewal, Kolkata

ITA 1720/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4768 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 19-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2013
• Court: TRIBUNAL
• Department Lawyers: MD G HYAS UDDIN
• Keywords: Additional evidence

Judgement Text

1 ITA NO.1720/KOL/2013-SHRI DAMANJIT SINGH GREWAL IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI WAS EEM AHMED, AM ] ITA NO.1720/KOL/2013 ASSESSMENT YEAR : 2009-10 D.C.I.T., CIRCLE-3, -VERSUS- SHRI DAMANJIT SING H GREWAL, KOLKATA KOLKATA (PAN:ADUPG 1564 E) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: MD. GHYAS UDDIN, JCIT, SR.D R FOR THE RESPONDENT: NONE DATE OF HEARING : 19.07.2016. DATE OF PRONOUNCEMENT : 03.08.2016 ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 18.03.2013 OF CIT(A) I, KOLKATA, RELATING TO AY 2009-10. 2. GROUND NO.1 RAISED BY THE REVENUE READ AS FOLL OWS: 1. LD. CIT(A) ERRED IN LAW AND ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE BY ALLOWING AGRICULTURE INCOME OF RS. 35,04,109/ - BY VIOLATING THE PROVISIONS OF RULE 46A AND ALLOWING THE CLAIM OF THE ASSESSEE WITHOUT DUE VERIFICATION OF THE AGRICULTURE INCOME/EXPENDITURES DECLARED BY THE ASSESSEE. 3. NOTICE OF HEARING OF THE APPEAL WAS SENT TO THE ASSESSEE BY REGISTERED POST WITH AD BUT THE SAME HAS BEEN DULY SERVED ON THE ASSESSEE. WHEN THE CASE WAS CALLED FOR HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE. WE THEREFORE DECIDE TO PROCEED TO HEAR THE APPEAL IN THE ABSENCE OF THE ASSESSEE AFTE R HEARING THE SUBMISSIONS OF THE LD. DR. 4. AS FAR AS GROUND NO.1 RAISED BY THE REVENUE IS C ONCERNED THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE DERIVES INCOME IN THE FORM OF COMMISSION ON CONTRACT WORK FOR REMOVAL OF OVERBURDEN BY TRANSPORTATION. I N THE COURSE OF ASSESSMENT PROCEEDINGS AO NOTICED THAT THE ASSESSEE HAS EARNED AGRICULTURAL INCOME OF RS.40,04,109/-. AO CALLED FOR THE DETAILS OF THE AG RICULTURAL LAND HOLDING AND EVIDENCE TO PROVE THE QUANTUM OF AGRICULTURAL INCOME. ACCORD ING TO THE ORDER OF AO THE ASSESSEE FILED ONLY THE PHOTO COPIES OF THE TWO LEA SE AGREEMENTS WHICH PROVED THE 2 ITA NO.1720/KOL/2013-SHRI DAMANJIT SINGH GREWAL ACQUISITION OF LAND ON LEASE. THE ASSESSEE DID NOT FURNISH ANY EVIDENCE TO SHOW THE QUANTUM OF AGRICULTURAL INCOME BY USE OF THE SAID L AND. THERE WAS NO EVIDENCE PRODUCED BY THE ASSESSEE TO PROVE THE DETAILS OF AC TUAL AGRICULTURAL PRODUCE AND EVIDENCE TO SHOW SALE OF THE SAME. IN THESE CIRCUMS TANCES, THE AO HELD THAT THE INCOME DECLARED BY THE ASSESSEE UNDER THE HEAD INCO ME FROM AGRICULTURE WAS INCOME FROM OTHER SOURCES AND ACCORDINGLY BROUGHT THE SAME TO TAX. 5. BEFORE CIT(A) THE ASSESSEE FILED THE FOLLOWING ADDITIONAL EVIDENCE :- (A) TWO LEASE AGREEMENTS DATED 10.07.2005 WITH SHRI VED PARKASH OF HIMACHAL PRADESH, LEASING OUT 13-17 BIGHAS OF AGRICULTURAL L AND TO THE APPELLANT FOR 7 YEARS AT THE ANNUAL LEASE MONEY AMOUNT OF RS.L ,00,000/- AND ANO THER DATED 10.07.2005 WITH SHRI DEVINDER KURNAR AND OTHERS, ALSO OF HIMACHAL PRADES H, LEASING OUT 30-33 BIGHAS OF AGRICULTURAL LAND AT THE ANNUAL LEASE MONEY AMOUNT OF RS.1,20,000/-. (B) COPIES OF VARIOUS CERTIFICATES ISSUED BY THE DI FFERENT MANDY SAMITIES TESTIFYING TO SALE OF AGRICULTURAL PRODUCTS LIKE APPLES ETC., ON DIFFERENT DATES COVERED BY THE YEAR UNDER CONSIDERATION BY M/S APPLE DISTRIBUTORS GROWE RS & TRADERS/ APPLE FRUIT AND VEGETABLE DISTRIBUTOR, THROUGH THOSE MANDIES. (C) AFFIDAVIT FILED BY THE APPELLANT DATED 17.02.20 11, STATING THAT HE IS THE PROPRIETOR OF THE CONCERN APPLE DISTRIBUTORS GROWERS & TRADERS.' (D) INCOME & EXPENDITURE ACCOUNT OF THE APPELLANT FOR THE RELEVANT YEAR, SHOWING NET AGRICULTURAL INCOME OF RS.40,04, 109/- 6. THE CIT(A) CONSIDERED THE AFORESAID ADDITIONAL EVIDENCE AND DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS FOLLOWS :- THE GROUND NO.2 TO 5 RELATES TO DISALLOWANCE OF AG RICULTURE INCOME FOR RS.40,04,109/- U/S 10. IT WAS CONTENDED BY THE APPELLANT THAT AO D ID NOT CONSIDER THE EVIDENCES FILED BEFORE HIM AND CERTAIN EVIDENCES RELATING TO AGRICU LTURE INCOME OF THE APPELLANT WERE ALREADY AVAILABLE IN THE PAST RECORDS OF ASSESSMENT AS ASSESSEE HAD CLAIMED NET AGRICULTURE INCOME OF RS.37,30,000/- IN AY-2007-08 AND AO DISALLOWED ON THE PART OF THE AGRICULTURE INCOME IN THAT YEAR I.E. RS.5,00,0 00/- WAS DISALLOWED BY THE AO. THE APPELLANT HAD PRODUCED TWO LEASE AGREEMENTS FOR SEV EN YEARS DATED 10.07.2005 WITH SHRI VED PRAKASH OF HIMACHAL PRADESH ALONG WITH CER TIFICATES ISSUED BY MANDI SAMITI REGARDING SALE OF AGRICULTURE PRODUCTS LIKE APPLES ON DIFFERENT DATES ALONG WITH THE RELEVANT INCOME AND EXPENDITURE ACCOUNT SHOWING NE T AGRICULTURE INCOME OF RS.40,04,109/- IN FORM OF VARIOUS ANNEXURES. THE D ETAILED RECEIPTS IN THE FINANCIAL YEAR BY APPLE DISTRIBUTORS' PROPRIETARY CONCERN OF THE A SSESSEE WERE RS.64,40,017/- ALONG WITH THE MANDI RECEIPTS OF HP AGRICULTURE BOARD SHI MLA AS PER RULE-68(4)[ FORM-J] OF HIMACHAL PRADESH GOVT. WAS FILED. AGAINST THESE REC EIPTS ASSESSEE HAD SHOWN NET AGRICULTURE INCOME OF RS.40,04,109/- AFTER DEBITING VARIOUS EXPENSES FOR SEEDS, FERTILISER, LEASE RENT ETC. KEEPING IN VIES ABOVE FACTS AND CIR CUMSTANCES AND THE PAST HISTORY OF THE CASE A SUM OF RS.5,00,000/- IS DISALLOWED OUT THIS NET AGRICULTURAL INCOME AND ADDITION 3 ITA NO.1720/KOL/2013-SHRI DAMANJIT SINGH GREWAL OF RS.5,00,000/- IS CONFIRMED UNDER THE HEAD THE IN COME FROM OTHER SOURCES. THEREFORE GROUND IS PARTLY ALLOWED. 7. THE GRIEVANCE OF THE REVENUE IS THAT THE CIT( A) ENTERTAINED ALL ADDITIONAL EVIDENCE AND DID NOT AFFORD OPPORTUNITY FOR EXAMINI NG THE ADDITIONAL EVIDENCES AND CLEARLY VIOLATED THE MANDATE LAID DOWN UNDER RULE 4 6A OF THE IT RULES, 1962. WE HAVE PERUSED THE GROUNDS OF APPEAL OF THE REVENUE A ND WE FIND THAT THE CIT(A) HAS ENTERTAINED ADDITIONAL EVIDENCE AND CONTRARY TO THE REQUIREMENTS OF RULE 46A OF THE IT RULES. IT IS INCUMBENT ON THE PART OF CIT(A) BEFORE ADMITTING THE ADDITIONAL EVIDENCE TO GIVE THE FINDING AS TO HOW THE ADDITIONAL EVIDEN CE COULD BE PERMITTED TO BE FILED AT THE APPELLATE STAGE AND SHOULD ALSO AFFORD OPPORTUN ITY TO THE AO TO LOOK INTO THE ADDITIONAL EVIDENCES AND TO RAISE OBJECTION WITH RE GARD TO THE ADMISSIBILITY AND VERACITY OF THE ADDITIONAL EVIDENCE FILED BY THE AS SESSEE. THE CIT(A) HAS CLEARLY VIOLATED THE MANDATE OF RULE 46A OF THE IT RULES. W E THEREFORE SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND REMAND THE ISSUE TO CIT(A) FOR FRESH CONSIDERATION WITH THE DIRECTION THAT THE CIT(A) SHOULD CONFRONT THE ADDIT IONAL EVIDENCE TO THE AO AND AFTER GETTING HIS OBJECTIONS ON ADMISSIBILITY OF ADDITION AL EVIDENCE AND IF CIT(A) ADMITS THE ADDITIONAL EVIDENCE THEN ALLOW THE AO OPPORTUNITY O F PUTTING FORTH HIS OBJECTIONS ON THE VERACITY OF THE CLAIM MADE BY THE ASSESSEE IN T HE FORM OF ADDITIONAL EVIDENCE. 8. GROUND NO.2 RAISED BY THE REVENUE READS AS FO LLOWS :- 2. LD. CIT(A) IS ERRED IN LAW AND ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE BY DELETING THE ADDITION OF RS. 1,21,212/- ON ACCOUNT OF SECURITY SERVICE CHARGE BASED ON THE BELIEF WHICH IS CONTRARY TO DOCUMENTARY EVIDENC E AVAILABLE ON THE RECORD. 9. THE AO IN THE COURSE OF ASSESSMENT PROCEEDING S NOTICED THAT THE ASSESSEE HAD CLAIMED AS DEDUCTION WHILE COMPUTING THE TOTAL INCO ME OF A SUM OF RS.4,84,850-/- UNDER THE HEAD SECURITY SERVICE CHARGES. THE ASS ESSEE EXPLAINED THAT THE AFORESAID SUM WAS PAID TO THE CHOWKIDAR ENGAGED FOR GUARDING THE PRODUCT AND THAT CONSIDERING THE PAYMENTS MADE TO THEM THERE WAS NO REQUIREMENT OF DEDUCTING TAX AT SOURCE. THE AO WAS OF THE VIEW THAT THE DETAILS OF THE EXPENSES WERE NOT FURNISHED BY THE ASSESSEE AND WERE THEREFORE NOT VERIFIABLE. HE THEREFORE DIS ALLOWED 25% OF THE EXPENSES CLAIMED WHICH RESULTED IN ADDITION OF RS.1,25,212/- TO THE TOTAL INCOME OF THE ASSESSEE. THE CIT(A) HOWEVER DELETED THE ADDITION M ADE BY THE AO, ACCEPTING THE 4 ITA NO.1720/KOL/2013-SHRI DAMANJIT SINGH GREWAL SUBMISSIONS OF THE ASSESSEE THAT THESE EXPENSES WER E NECESSARY EXPENSES FOR RUNNING THE BUSINESS OF THE ASSESSEE. 10. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE HAS RAISED GROUND NO.2 BEFORE THE TRIBUNAL. 11. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR, WE ARE OF THE VIEW THAT THE NATURE OF THESE EXPENSES HAS NOT BEEN PROPERLY EXPL AINED BY THE ASSESSEE. THE ASSESSEE CARRIES ON THE BUSINESS OF TRANSPORTATION OF OVERBU RDEN. HE ALSO CLAIMS TO HAVE INCOME FROM AGRICULTURE. AS TO WHETHER THE SECURITY SERVI CE CHARGES RELATE TO THE INCOME FROM AGRICULTURE OR OTHER BUSINESS IS NOT CLEAR FROM THE ORDER OF CIT(A). THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO GIVE THE DETAILS BEF ORE AO. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THIS ISSUE ALSO REQUIRES FRESH EXA MINATION BY THE AO AND ACCORDINGLY ORDER OF CIT(A) IS SET ASIDE AND THE ISSUE IS REMAN DED TO THE CIT(A) FOR FRESH CONSIDERATION. 12. IN THE RESULT THE APPEAL OF THE REVENUE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE COURT ON 03.08.2016. SD/- SD/- [WASEEM AHMED ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 03.08.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.SHRI DAMANJIT SINGH GREWAL, 11, DECRES LANE, ESPL ANADE EAST, KOLKATA-700069. 2. D.C.I.T., CIRCLE-3, KOLKATA. 3. CIT(A)-I, KOLKATA 4. CIT-I, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES 5 ITA NO.1720/KOL/2013-SHRI DAMANJIT SINGH GREWAL