Bommareddy Padmajavani, Eluru V. THE ITO, WARD - 2, Eluru

ITA 194/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0171 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 27-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Section: 143(3)

Judgement Text

ITA NO.194/VIZAG/2013 BOMMAREDDY PADMAJAVANI, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.194/VIZAG/2013 ( / ASSESSMENT YEAR : 2004-05 ) BOMMAREDDY PADMAJAVANI ELURU VS. ITO WARD - 2 ELURU [ PAN: AFOPB2764B ] ( & & & & / APPELLANT) ( ' '' '(& (& (& (& / RESPONDENT ) & ) / APPELLANT BY : SHRI G.V.N. HARI, AR '(& ) / RESPONDENT BY : SHRI M.K. SETHI, DR ) - / DATE OF HEARING : 27.10.2015 ) - / DATE OF PRONOUNCEMENT : 04.12.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT(A)-11 MUMBAI, CAMP AT VISAKHAPATNAM DATED 8.1.2 013 FOR THE ASSESSMENT YEAR 2004-05. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL DERIVING INCOME FROM FISH BROKERAGE AND AGRICULTURAL INCOME FILED A RETURN OF INCOME ITA NO.194/VIZAG/2013 BOMMAREDDY PADMAJAVANI, ELURU 2 ADMITTING INCOME OF RS.60,000/- FROM THE FISH BROKE RAGE AND RS.2,40,000/- FROM THE AGRICULTURE. THE RETURN FIL ED BY THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS THE AC T). IN THE ASSESSMENT ORDER, THE A.O. HAS OBSERVED THAT THE LA ND HOLDINGS BY THE ASSESSEE WERE SHOWN AT 7.93 ACRES, THE CROPS GROWN WERE MAIZE, COCONUT & PADDY AND ANNUAL INCOME AT RS.2,40,000/-. A PERUSAL OF THE EARLIER RECORD REVEALS THAT AGRICULTURAL INCOME DEC LARED FOR THE ASSESSMENT YEAR 2001-02 TO 2002-03 OF RS.57,500/-. AGRICULTURAL HOLDINGS ARE SHOWN AT 5.75 ACRES. DURING THE ASSES SMENT YEAR 2003-04 AND 2004-05, THE AGRICULTURAL LAND HOLDINGS WERE SH OWN AT 7.93 ACRES. DURING THE COURSE OF HEARING, THE ASSESSEE WAS ASKE D FOR THE DETAILS OF THE CROPS GROWN, EXTENT OF THE LAND USED FOR EACH C ROP, EXPENSES INCURRED TOWARDS CULTIVATION, INCOME EARNED FROM EA CH CROP WITH SALE BILLS TOWARDS AGRICULTURAL PRODUCE AND EXPENDITURE VOUCHERS. THE ASSESSEE WAS UNABLE TO PRODUCE THE SAME EXCEPT M.R. O. CERTIFICATE DATED 16.11.2006 SHOWING THAT THE CROP GROWN AS PA LM OIL AND COCONUT AND THE INCOME EARNED THEREFROM IS RS.3,10,000/-. THE A.O. WAS OF THE OPINION THAT IN THE ABSENCE OF DETAILS OF LAND CULT IVATION IN RESPECT OF EACH CROP, SALE BILLS TOWARDS SALE OF AGRICULTURAL PRODUCE AND DETAILS OF EXPENSES INCURRED FOR CULTIVATION, ASKED THE ASSESS EE THAT WHY INCOME ITA NO.194/VIZAG/2013 BOMMAREDDY PADMAJAVANI, ELURU 3 SHOULD NOT BE ESTIMATED AT RS.10,000/- PER ACRE. I T WAS SUBMITTED BEFORE THE A.O. THAT NO BOOKS OF ACCOUNTS MAINTAINE D IN RESPECT OF AGRICULTURAL INCOME, ENTIRE PALM OIL IS SHIFTED TO PALM OIL FACTORIES AND NO RETAIL SALES ARE MADE IN RESPECT OF PALM OIL, THE A GRICULTURE OPERATIONS ARE PERSONALLY SUPERVISED AND PLEADED THAT RS.2,40, 000/- SHOWN BY THE ASSESSEE MAY BE ACCEPTED AND THE A.O. HAS DIRECTED THE INSPECTOR TO ENQUIRE INTO THE ISSUES AND AFTER CONSIDERING THE R EPORT FROM THE INSPECTOR HE HAS OBSERVED THAT AFTER PURCHASE OF TH E GARDEN, PALM OIL TREES ARE PLANTED IN THE GARDEN IN ADDITION TO COCO NUT TREES (COCONUT TREES ARE 60 PER ACRE) THE PRESENT AGE OF PALM OIL TREES ARE ABOUT 3 YEARS AT PRESENT. THE PALM OIL TREES ARE NOT GIVIN G ANY YIELD. THE YIELD FROM PALM OIL TREES ONLY COMES AFTER 10 YEARS. PAL M OIL TREES ARE REQUIRED SUN LIGHT TO GROW UP PROPERLY. IN THE PRE SENT CASE, PALM OIL TREES ARE PLANTED IN THE COCONUT GARDEN, THE PLANTS ARE NOT PROPERLY GROWN UP DUE TO THE COCONUT TREES SHADOW. THE COCO NUT TREES ARE NOT GIVING FULL YIELD AS THE FERTILE OF THE LANDS IS TA KEN AWAY BY THE PALM OIL TREES. 3. A.O. FURTHER OBSERVED THAT AS PER THE INFORMATIO N OF LOCAL AUTHORITIES, THE LAND OF SRI B.V. KRISHNA REDDY ABO UT 17 ACRES ARE GIVEN FOR LEASE FOR RS.1,50,000/- TO SHRI ADAPA SRINU, RA MASINGARAM VILLAGE. ITA NO.194/VIZAG/2013 BOMMAREDDY PADMAJAVANI, ELURU 4 IN VIEW OF THE INCOME TAX INSPECTORS REPORT, THE A .O. HAS ESTIMATED THE AGRICULTURAL INCOME OF THE ASSESSEE AT RS.10,00 0/- PER ACRE IN RESPECT OF COCONUT GARDEN SINCE THERE IS NO YIELD F ROM THE PALM OIL PLANTS. THE DIFFERENCE OF RS.1,60,700/- IS TREATED AS INCOME FROM OTHER SOURCES. ACCORDINGLY ASSESSMENT WAS COMPLETED. AS SESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) SIMPLY CONFIRMED THE ORDER OF THE A.O. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE IS HAVING AN AGRICULTURAL LAND TO THE EXTENT OF 7.9 3 ACRES IRRIGATED LAND AND ALREADY PLANTED COCONUT TREES WHICH ARE GIVING YIELD SINCE MORE THAN 3 YEARS AND PALM OIL ALSO PLANTED IN IT AND SU BMITTED THAT THE INCOME SHOWN BY THE ASSESSEE IS RS.2,40,000/- MAY B E PERMITTED AS INCOME FROM AGRICULTURE. 5. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORT ED THE ORDER PASSED BY THE A.O. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE C ASE OF THE ASSESSEE IS THAT THE ASSESSEE IS HAVING AN EXTENT OF 7.93 ACRES OF AGRICULTURAL LAND WHICH IS IRRIGATED AND COCONUT TREES WERE ALREADY P LANTED LONG BACK AND IT STARTED GIVING YIELD SINCE MORE THAN 3 YEARS AND PALM OIL TREES ARE ALSO ITA NO.194/VIZAG/2013 BOMMAREDDY PADMAJAVANI, ELURU 5 PLANTED. THE A.O. HAS NOT BELIEVED THE VERSION OF THE ASSESSEE. HE HAS DEPUTED THE INSPECTOR FOR A FULL ENQUIRY. THE INSP ECTOR AFTER VISITING THE FIELD GAVE A REPORT, WHEREIN HE HAS STATED THAT THE COCONUT TREES ARE 60 PER ACRE AND PALM OIL TREES ARE ABOUT 3 YEARS OLD A ND NOT GIVING ANY YIELD. HE ALSO STATED THAT PALM OIL TREES GIVES YI ELD ONLY AFTER 10 YEARS. WE DO NOT KNOW ON WHAT BASIS THE INSPECTOR CAME TO A CONCLUSION THAT PALM OIL TREES WILL GIVE YIELD AFTER 10 YEARS. AS PER OUR UNDERSTANDING, IT STARTS GIVING YIELD AFTER 4 YEARS. SO FAR AS THE C OCONUT TREES ARE CONCERNED, THE A.O. WITHOUT MAKING ANY ENQUIRY SAID THAT COCONUT TREES ARE NOT GIVING FULL YIELD. REGARDING YIELD IT HAS TO BE SEEN BASED ON THE YIELDING OF EACH TREE AND ACCORDINGLY AVERAGE HAS T O BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF CALCULATION OF THE INCOME. THE INSPECTOR, WITHOUT MAKING ANY ENQUIRY SIMPLY STATED THAT COCONUT TREES ARE NOT GIVING FULL YIELD. A.O. ACCEPTED THAT VERS ION OF THE INSPECTOR, WHICH WE FIND IT AS NOT CORRECT. SO FAR AS COMPARI SON MADE BY THE A.O. IN RESPECT OF SRI B.V. KRISHNA REDDY LEASED OUT HIS LAND OF 17 ACRES FOR RS.1,50,000/- SRI AADPA SRINU, RAMASINGARAM VILLAGE , IT IS NOT CLEAR FROM THE ASSESSMENT ORDER, WHETHER THE LAND BELONGING TO SRI B.V. KRISHNA REDDY IS IRRIGATED LAND?, WHAT IS THE CULTIVATION C ARRIED OUT BY SRI B.V. KRISHNA REDDY IN ITS LAND IS NOT CLEAR. THE EXTENT OF THE LAND HOLDING IS NOT CRITERIA TO DECIDE THE AGRICULTURAL INCOME. TH E AGRICULTURAL ITA NO.194/VIZAG/2013 BOMMAREDDY PADMAJAVANI, ELURU 6 INCOME HAS TO BE DECIDED BASED ON IRRIGATION FACILI TIES AVAILABLE IN THE LAND AND CROPS GROWN ON THAT LAND. IN THE PRESENT CASE, THE COMPARISON MADE BY THE A.O. IS WITHOUT MAKING ANY ENQUIRY ABOU T THE RELEVANT FACTORS IS NOT TENABLE. IN VIEW OF THE ABOVE, WE F IND THAT THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AT RS.2,40,000/- IS RE ASONABLE AND IT CAN BE ACCEPTABLE. IN VIEW OF THE ABOVE, THE ORDER PASSED BY THE LD. CIT(A) CANNOT BE SUSTAINED AND WE ALLOW THE APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 4 TH DEC15. SD/- SD/- ( . . . . ) ( . ) ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 3 / DATED : VG/SPS ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT BOMMAREDDY PADMAJAVANI, D.NO.25-3-12, SINGH STREET, N.R. PETA, ELURU, W.G. DIST, A.P. 2. '(& / THE RESPONDENT ITO WARD-2, ELURU 3 . 5 / THE CIT, RAJAHMUNDRY 4. 5 () / THE CIT(A)-11, MUMBAI, CAMP AT VISAKHAPATNAM 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER