Shri Baldevbhai Becharbhai Patel, Nadiad V. The Income tax Officer,Ward-1, Nadiad

ITA 1968/AHD/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6131 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 09-05-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY SRDR
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Business income; Corroborative evidences
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH BEFORE SHRI G.D. AGARWAL, HONBLE VICE-PRESIDENT (AZ) AND SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER ITA NO.1968/AHD/2007 ASSESSMENT YEAR:2003-04 DATE OF HEARING:9.6.11 DRAFTED: 1.7.11 SHRI BALDEVBHAI BECHARBHAI PATEL, PATEL KHADKI, CHATIYAWARD LIMDI, NADIAD PAN NO.ADOPP3708P V/S . INCOME TAX OFFICER, WARD-1, NADIAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SUNIL H TALATI, AR RESPONDENT BY:- SHRI PRAKASH DUBEY, SR-DR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX (APPEALS)-IV, BARODA IN APPEAL NO.CAB/IV -N-370/05-06 FOR THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS:- 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDI TION OF RS.2,30,250 MADE BY THE AO TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. YOUR APPELLANT SUBMITS THAT ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) IS UNJUST AND UNCALLED FOR. THE AGRICULTURAL INCOME AS DECLARED IN RETURN OF RS.2,0,250 BE ACCE PTED NOW AND ADDITION MADE TREATING THE SAME AS INCOME FROM OTH ER SOURCES BE DELETED IN TOTO. ITA NO.1968/AHD/2007 A.Y. 2003-04 SH BALDEVBHAI B PATEL V. ITO WD-1, NADIAD PAGE 2 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE A CTION OF THE AO OF LEVYING INTEREST U/S.234A AND 234B OF THE ACT. YOUR APPELLANT SUBMITS THAT LEVY OF INTEREST BE HELD INCORRECT AND SAME BE DELETED NOW. 3. THE GROUND NO.1 RELATES TO CONFIRMING THE ADDITI ON OF RS.2,30,250/- MADE BY ASSESSING OFFICER TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.52,750/- AND AGRICULTU RAL INCOME OF RS.2,90,250/-. THE ASSESSEE EARNED INCOME FROM BUSINESS OF SALE OF MILK FOR WHICH HE HAS NOT MAINTAINED REGULAR BOOKS OF ACCOUNT BUT HAS DIS CLOSED THE SAME @ 10% OF THE TOTAL SALES OF RS.5,27,500/- AS PER THE PROV ISION OF SECTION 44AF. ALONG WITH THIS, HE HAS ALSO DISCLOSED AGRICULTURAL INCOM E OF RS.2,90,250/-. IN SUPPORT OF HIS CLAIM OF AGRICULTURAL INCOME, THE AS SESSEE FILED EXTRACTS FROM THE REVENUE RECORD OF THE VILLAGE I.E. FORM 8-A AND 7/1 2. HE ALSO STATED THAT HE HAD BEEN CARRYING ON AGRICULTURAL ACTIVITIES DURING THE PAST 25 YEARS AND HAS GROWN BAJRI, PADDY, WHEAT, JUWAR ETC. FOR THE CURRE NT YEAR, THE ASSESSEE CLAIMED TO HAVE SOLD AGRICULTURAL PRODUCE OF RS.4,5 3,300/-. THIS INCLUDED OPENING STOCK OF RS.1,02,500/-. AFTER TAKING INTO A CCOUNT THE AGRICULTURAL EXPENSES OF RS.80,750/- AND STOCK-IN-HAND OF RS.20, 200/- THE INCOME FROM AGRICULTURE AMOUNTING TO RS.2,90,250/- WAS DECLARED . DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT ASSESS EE COULD NOT FURNISH ANY DETAILS IN RESPECT OF GROSS AGRICULTURAL INCOME CLA IMED. HE WAS UNABLE TO PRODUCE QUANTITIES OF VARIOUS AGRICULTURAL PRODUCE REALIZED DURING THE YEAR. HE COULD NOT SUBMIT ANY SUPPORTING DOCUMENTARY EVIDENC E WITH REGARD TO THE SALE OF SUCH AGRICULTURAL PRODUCE. THE ASSESSEE ALSO FAI LED TO GIVE ANY EVIDENCE TO SHOW THAT THE AREA CLAIMED BY HIM HAS ACTUALLY BEEN CULTIVATED DURING THE YEAR. FURTHER THE EXTRACTS OF 7/12 RECORD SHOWED TH AT THE LAND IN QUESTION WAS OWNED BY THREE OTHER PERSONS OWNED BY THE ASSESSEE. SINCE THE ASSESSEE FAILED TO GIVE ANY SUPPORTING EVIDENCE TO SUBSTANTI ATE HIS CLAIM FOR EARNING AGRICULTURAL INCOME, THE AO TREATED THE SUM OF RS.2 ,30,250/- AS THE ITA NO.1968/AHD/2007 A.Y. 2003-04 SH BALDEVBHAI B PATEL V. ITO WD-1, NADIAD PAGE 3 ASSESSEES UNDISCLOSED INCOME AND ACCEPTED RS.60,00 0/- AS INCOME EARNED FROM AGRICULTURAL ACTIVITIES. 5. BEFORE LD. CIT(APPEALS) THE ASSESSEES CONTENTIO N WAS THAT HE HAD BEEN DECLARING AGRICULTURAL INCOME FROM ASSESSMENT YEAR 2001-02 AND SAME HAD BEEN ACCEPTED BY THE DEPARTMENT. HE ALSO STATED THAT THOUGH IN THE LAND RECORD OWNERSHIP HAS BEEN MENTIONED FOR OTHER PERSO NS, BUT IN FACT THE ASSESSEE IS CULTIVATING THE TOTAL LAND AND OTHER LA ND OWNERS ARE NOT CARRYING OUT ANY AGRICULTURAL ACTIVITIES ON THE SAID LAND. H E THEREFORE SUBMITTED THAT SINCE THERE IS NO OTHER SOURCE OF INCOME IN THE CAS E OF THE ASSESSEE IT IS NOT CORRECT ON THE PART OF THE ASSESSING OFFICER TO CON SIDER THE AGRICULTURAL INCOME AS UNDISCLOSED INCOME OF THE ASSESSEE. HOWEVER, LD. CIT(APPEALS) WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HE ALSO WAS OF THE VIEW THAT NO EVIDENCE WAS ADDUCED BY THE ASSESSEE NEITHER AT THE STAGE OF ASSESSMENT NOR BEFORE HIM TO SHOW THAT HE HAD ACTUALLY EARNED THIS INCOME FROM AGRICULTURE. THEREFORE HE CONFIRMED THE ACTION OF A SSESSING OFFICER. 6. BEFORE US LD. COUNSEL FOR THE ASSESSEE REITERATE D THE SAME SUBMISSION AS MADE BEFORE LOWER AUTHORITIES AND ALSO PLACED RE LIANCE ON THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2006-07 IN ASSESSEES OWN CASE ACCORDING TO WHICH THE AGRICULTURAL INCOME SHOWN FOR THE LAST TH REE YEARS HAVE BEEN ACCEPTED BY THE DEPARTMENT. HE THEREFORE SUBMITTED THAT THE INCOME SHOWN FROM AGRICULTURAL INCOME MAY KINDLY BE ACCEPTED AND THE ADDITION MADE ON THIS GROUND MAY KINDLY BE DELETED. 7. LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES . 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT DEPARTMENT HAS NOT DISPUTED THE FACT ASSESSEE IS IN POSSESSION OF AGRICULTURAL LAND AND HE HAS CULTIVATED LAND DURING THE YEAR UND ER APPEAL. THE ADDITION HAS BEEN MADE BY TREATING THE AGRICULTURAL INCOME A S UNDISCLOSED INCOME OF ITA NO.1968/AHD/2007 A.Y. 2003-04 SH BALDEVBHAI B PATEL V. ITO WD-1, NADIAD PAGE 4 THE ASSESSEE AS ACCORDING TO THE LOWER AUTHORITIES, THE ASSESSEE FAILED TO SATISFACTORILY ADDUCE EVIDENCE TO SHOW THAT GROSS A GRICULTURAL INCOME WAS ACTUALLY EARNED BY THE ASSESSEE AND OTHER DETAILS L IKE QUANTITIES OF VARIOUS AGRICULTURAL PRODUCE COULD NOT BE FILED BY THE ASSE SSEE. WE FURTHER FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT ASSESSEE HA D SHOWN AGRICULTURAL INCOME IN THE SUBSEQUENT THREE ASSESSMENT YEARS AS UNDER:- 2004-05 2,70,520/- 2005-06 1,75,500/- 2006-07 1,40,225/- IT IS ALSO NOT IN DISPUTE THAT ABOVE AGRICULTURAL I NCOME SHOWED BY THE ASSESSEE WAS ACCEPTED BY DEPARTMENT. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT ASSESSING OFFICER WAS NOT J USTIFIED IN ESTIMATING THE AGRICULTURAL INCOME OF THE ASSESSEE TO THE TUNE OF RS.60,000/- ONLY. IN THE ABSENCE OF CERTAIN DETAILS REQUIRED IN SUPPORT OF T HIS AGRICULTURAL INCOME, THE AGRICULTURAL INCOME SHOWN BY ASSESSEE IS ALSO CANNO T BE ACCEPTED. KEEPING ALL THESE ASPECTS OF THIS CASE IN VIEW WE FEEL IT R EASONABLE THAT AGRICULTURAL INCOME TO THE TUNE OF RS.1.50 LAKH BE ACCEPTED. THE ASSESSING OFFICER IS THEREFORE DIRECTED TO TREAT THE SUM OF RS.1,40,250/ - AS THE ASSESSEES UNDISCLOSED INCOME AND ACCEPT RS.1.50 LAKH AS INCOM E EARNED FROM AGRICULTURAL ACTIVITIES. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. 9. GROUND NO.2 IS CONSEQUENTIAL IN NATURE DOES NOT REQUIRE ANY ADJUDICATION. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS DAY OF 8 TH JULY, 2011 SD/- SD/- ( G.D.AGARWAL ) ( D.K. TYAGI ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 08/07/2011 ITA NO.1968/AHD/2007 A.Y. 2003-04 SH BALDEVBHAI B PATEL V. ITO WD-1, NADIAD PAGE 5 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-IV, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD