Shri Naginbhai C. Patel,HUF, Dist.Baroda V. The Income tax Officer,Ward-2(2), Baroda

ITA 1743/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5790 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 17-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 16-05-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV BOTHAM
• Assessee Lawyers: M J SHAH
• Keywords: Unexplained expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, ACCOUNTANT MEMBER ITA NO.1743/AHD/2008 ASSESSMENT YEAR: 2004-05 DATE OF HEARING:17.6.10 DRAFTED:21.6.10 NAGINBHAI C PATEL, HUF, C/O. C. P. PATEL & SONS,N.H. NO.8 DASHRATH DIST. BARODA, PAN NO.AABHP3324D V/S . INCOME TAX OFFICER, WARD-2(2), BARODA (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M.J. SHAH, AR RESPONDENT BY:- SHRI GAURAV BOTHAM, DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEAL)-II, BARODA IN APPEAL NO.CAB/II- 608/06-07 DATED 04-03-2008. THE ASSESSMENT WAS FRAMED BY ITO WARDD-2(2), BARODA U/S.143(3) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS ORDER DATED 29-12-2006 FOR ASSESSMENT YEAR 2004-05. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ESTIMATION OF AGRICULTURAL INCOME AT A LESSER AMOUNT BY THE ASSES SING OFFICER AND THEREAFTER CONFIRMED BY CIT(A). FOR THIS, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THE LEARNED C.I.T.(APPEALS)II, BARODA, HAS WRON GLY REJECTED CULTIVATION AND PRODUCTION ON DANE LAND OF OTHER PERSONS BY APPELLA NT. 2. THE LEARNED C.I.T. (APPEALS)II, BARODA HAS WRONG LY ESTIMATE THE PRODUCTION OF TOBACCO AT THE RATE OF 45 MAUNDS PER ACRE. 3. THE LEARNED C.I.T. (APPEALS)II, BARODA HAS WRONG LY CONFIRMED THE ADDITION OF RS.53,000 ON ACCOUNT OF UNEXPLAINED EXPENDITURE. ITA NO.1743/AHD/2008 A.Y. 2004-05 NAGINBHAI C PATEL V. ITO WD-2(2) BRD PAGE 2 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE ASSESSEE IS MAINLY AN AGRICULTURIST AND CULTIVATES TOBACCO ON HIS OWN LAND (LAND OWNED BY HIM INDIVIDUALLY AS WELL AS THE LAND OWNED BY HIM JOINTLY) AS WELL AS ON THE LAND TAKEN ON LEASE. THAT THE GROSS AGRICULTURAL R ECEIPTS ON THE SALE OF TOBACCO AND OTHER CASH CROPS WERE RS.10,06,687/- AND THE EXPEND ITURE INCURRED ON SUCH AGRICULTURAL OPERATION WAS RS.2.90 LAKH. THUS, NET AGRICULTURAL INCOME OF RS.7,76,687/- WAS DISCLOSED BY THE ASSESSEE. THE AS SESSING OFFICER ESTIMATED THE YIELD OF THE TOBACCO AT 1800 KGS. PER HECTOR IN RES PECT OF THE LAND OWNED BY THE ASSESSEE. HOWEVER, IN RESPECT OF THE JOINT LAND AS WELL AS THE LEASE-HOLD LAND NO CROP WAS ACCEPTED. HE HAS STATED THAT AS PER THE P UBLICATION OF THE AGRICULTURAL DEPARTMENT, THE YIELD OF TOBACCO PER HECTARE VARIES DEPENDS ON VARIETIES OF TOBACCO. HE POINTED OUT THAT IN RESPECT OF BIDI TOBACCO IT RANGES FROM RS.2,255/- PER KG TO RS.2600/- PER KG PER HECTOR, WHILE IN RESPECT OF OT HER TOBACCO IT GOES AS HIGH AS RS.3500/- PER KG PER HECTOR. HE ALSO STATED THAT T HE ASSESSING OFFICER HAS GIVEN NO ADEQUATE REASON FOR NOT ACCEPTING THE AGRICULTURE P RODUCE FROM THE LAND JOINTLY OWNED BY THE ASSESSEE AS WELL AS THE LAND TAKEN ON LEASE. THE ASSESSEE HAS GIVEN NECESSARY EVIDENCE IN RESPECT OF THE LAND TAKEN ON LEASE. HE THEREFORE SUBMITTED THAT THE ENTIRE ADDITION MADE BY THE ASSESSING OFFI CER MAY BE DELETED. HE ALTERNATIVELY STATED THAT EVEN OTHERWISE, THE ESTIM ATE MADE BY THE ASSESSING OFFICER IS VERY LOW AND EVEN IF THE AGRICULTURAL INCOME WAS TO BE ESTIMATED, IT SHOULD HAVE BEEN A REASONABLE ESTIMATE. THE ASSESSING OFFICER A CCEPTED THE AGRICULTURAL INCOME AT RS.4,081/-/- ONLY AS AGAINST THE AGRICULTURAL IN COME OF RS.7,76,687/- DISCLOSED BY THE ASSESSEE. HE THEREFORE REQUESTED THAT A REASON ABLE ESTIMATE MAY BE MADE BY THE ITAT. 4. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND HE HAS STATED THAT THE ASSESSING OFFICER HAS FAIRLY WORKED OUT THE AGRICULTURE INCOME OF THE ASSESSEE AT RS.4,081/-. THE SAME SHOULD BE ACCEPTED AND THE ASSESSEES APPEAL MAY BE DISMISSED. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED MATERIALS PLACED BEFORE US. SINCE THE ASSESSEE HAS NOT MAINTAINED THE COMPLETE DETAILS IN RESPECT OF AGRICULTURE ACTIVITIES, THE P RODUCE SOLD AND THE EXPENDITURE INCURRED, THEREFORE, THE ENTIRE CLAIM OF THE AGRICU LTURAL INCOME OF THE ASSESSEE CANNOT ITA NO.1743/AHD/2008 A.Y. 2004-05 NAGINBHAI C PATEL V. ITO WD-2(2) BRD PAGE 3 BE ACCEPTED. HOWEVER, AT THE SAME TIME, ESTIMATE O F THE AGRICULTURAL INCOME BY THE ASSESSING OFFICER IS ALSO VERY LOW. IN OUR OPINION , IT WOULD MEET ENDS OF THE JUSTICE, IF THE AGRICULTURAL INCOME OF THE ASSESSEE IS ACCEPTED AT RS.3.75 LAKHS AS AGAINST THE INCOME OF RS.7,76,687/- DISCLOSED BY THE ASSESSEE. THUS, THE ADDITION OF RS.4,01,687/- IS SUSTAINED AS INCOME FROM UNDISCLOS ED SOURCES. 6. THE NEXT ISSUE REGARDING DIFFERENCE OF RS.53,000 /- ADDED BY ASSESSING OFFICER AND CONFIRMED BY CIT(A), WE FIND THAT THE A SSESSEE HAS SHOWN AGRICULTURAL INCOME AT RS.7,76,6,87/- AS AGAINST THE TOTAL GROSS RECEIPTS AT RS.10,66,687/- AND AGRICULTURAL EXPENSES AT RS.2.37 LAKHS. WE FIND TH AT THERE IS DIFFERENCE OF RS.53,000/- AND THE AGRICULTURAL INCOME SHOULD HAVE BEEN AT RS.8,29,687/- OR AGRICULTURAL EXPENSES SHOULD HAVE BEEN AT RS.2.90 L AKHS. WE FIND THAT THIS DIFFERENCE HAS NOT BEEN EXPLAINED BY THE ASSESSEE E VEN NOW BEFORE US, ACCORDINGLY, THIS ADDITION CONFIRMED BY CIT(A) IS UPHELD. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25/06 /2010 SD/- SD/- (D.C.AGRAWAL) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 25/06/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-II, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD