RAnjan Kumar Nath, Koraput V. ITO, Jeypore

ITA 208/CTK/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7177 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 28-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P C SETHI
• Keywords: Income from undisclosed sources; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.208 /CTK/2014 ASSESSMENT YEAR : 2009 - 2010 RANJAN KUMAR NATH, POST OFFICE ROAD, KORAPUT. VS. ITO, WARD - 2, JEYPORE PAN/GIR NO. AIBPN 4939 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.C.SETHI, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 28 /03 / 2017 DATE OF PRONOUNCEMENT : 2 8 /03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - BERHAMPUR, DATED 24.2.2014 FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. IN GROUND NO.1 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER MAKING ADDITION OF RS.3 ,50,000/ - AS UNEXPLAINED I NVESTMENT IN THE CAPITAL OF THE FIRM. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE INVESTED RS.3,5 0,000/ - IN THE CAPITAL OF THE FIRM 2 ITA NO.208 /CTK/2014 ASSESSMENT YEAR :2009 - 2010 M/S. SUNLEY JEWELLERS, IN WHICH THE ASSESSEE IS A PARTNER. THE ASSESSEE EXPLAINED THE SOURCE OF THE CAPITAL IN THE FIRM TO BE OUT OF HIS EARLIER YEARS INCOME FOR WHICH THE ASSESSEE FILED COPIES OF RETURN OF INCOME OF LAST THREE YEARS BEFORE THE ASSESSIN G OFFICER, WHEREIN, THE ASSESSEE HAS SHOWN RETURN ED INCOME OF RS.1,12,050 / - AN D AGRICULTURAL INCOME OF RS.30,0 00/ - IN ASSESSMENT YEAR 2007 - 08 , RETURNED INCOME OF RS.1,30,630 / - AND AGRICULTURAL INCOME OF RS.36,2 00/ - IN ASSESSMENT YEAR 2008 - 09 AN D RETURNED I NCOME OF RS.1,59,710 / - AND AGRICULTURAL INCOME OF RS.35,8 00/ - IN ASSESSMENT YEAR 2009 - 10. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT ALL THE RETURNS OF INCOME WERE FILED BY THE ASSESSEE AFTER SURVEY WAS CONDUCT ED IN THE PREMISES OF THE FIRM ON 3.3.2009 AND ADDED RS.3, 5 0,000/ - TO THE INCOME OF THE ASSESSEE AS UNEXPLA INED INVESTMENT OF THE ASSESSEE 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDER ED THE MATTER AND GONE THROUGH THE ASSESSMENT RECORDS. ADMITTEDLY, THE RETURNS IN THIS CASE HAVE BEEN FILED AFTER THE SURVEY WAS CONDUCTED IN THE PREMISES OF THE FIRM IN WHICH THE APPELLANT IS A PARTNER. THEREFORE, NOT MUCH CREDENCE CAN BE GIVEN TO THE RET URNS FILED UNLESS INDEPENDENT CORROBORATING EVIDENCE IS FURNISHED IN SUPPORT OF THE STATEMENTS MADE IN THE RETURN PARTICULARLY RELATING TO AVAILABILITY OF THE OPENING CAPITAL AS ON 01 - 04 - 2006 WHICH IS PRIMARILY INTENDED TO EXPLAIN THE INVESTMENT DURING THE IMPUGNED ASSESSMENT YEAR. WHEN THE APPELLANT ADMITTEDLY DID NOT HAVE ANY TAXABLE INCOME IN EARLIER YEARS, IT IS NOT UNDERSTOOD AS TO HOW HE COULD HAVE A OPENING CAPITAL OF RS.2,58,626/ - . THE APPELLANT HAS NOT PRODUCED ANY CORROBORATING EVIDENCE LIKE COPY OF THE BANK ACCOUNT OR RECEIPT OF ANY MO NEY FROM SALE OF ANY INVESTMENT OR 3 ITA NO.208 /CTK/2014 ASSESSMENT YEAR :2009 - 2010 PROPERTY TO SUPPORT ITS CONTENTION THAT HE HAS ENOUGH CASH WITH HIM TO MAKE THE INVESTMENT. IN THE ABSENCE OF ANY SUCH EVIDENCE, I AM NOT INCLINED TO INTERFERE WITH THE ACTION OF THE AO IN TREATING THE SOURCE OF THIS INVESTMENT OF RS.3.5 LACS IN THE FIRM AS INCOME FROM UNDISCLOSED SOURCES. THE ADDITION OF RS.3.5 LACS IS ACCORDINGLY CONFIRMED AND THE GROUND NO.1 IS THUS DISMISSED. 5 . BEFORE ME, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE COULD NOT POINT OUT ANY ERROR IN THE ORDER OF THE CIT(A) OR PRODUCE ANY POSITIVE MATERIAL TO CONTROVERT THE FINDINGS OF THE LD CIT(A). THEREFORE, I DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HE REBY CONFIRMED AND , ACCORDINGLY, DISMISS THIS GROUND OF THE APPEAL. 6. IN GROUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING AGRICULTURAL INCOME OF RS.35,800/ - . 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DISCLO SED AGRICULTURAL INCOME OF RS.35,8 00/ - . THE ASSESSEE EXPLAINED THAT THE ASSESSEE HAD AGRICULTURAL LAND OF AC.1.5 FROM WHICH HE HAS PRODUCED SUGAR CANE WORTH RS.68,2 00/ - . THE ASSESSING OFFICER MADE ENQUIRIES THROUGH INCOME TAX INSPECTOR WHO REPORTED THAT THE ASSESSEE COULD NOT PRODUCE ANY DETAILS OF SUCH LANDED PROPERTY AND O THER DETAILS RELATING TO AGRICULTURAL INCOME. THEREFORE, THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE ABOUT AGRICULTURAL 4 ITA NO.208 /CTK/2014 ASSESSMENT YEAR :2009 - 2010 I NCOME AND MADE ADDITION OF RS.35 , 8 00/ - AS INCOME FROM OTHER SOURCES, AND ON APPEAL, THE ADDITION WAS CONFIRMED BY THE CIT(A) . 8. I FIND THAT THIS ISSUE IS ALSO IDENTICAL TO THE FACTS OF THE CASE OF THE FAMILY MEMBERS OF THE ASSESSEE IN THE CASE OF BHAGABAN NATH IN ITA NO.205/CTK/2014 FOR ASSESSMENT YEAR 2009 - 2010, WHEREIN, I HAVE DECIDED THE ISSUE VIDE ORDER OF EVE N DATE , OBSERVING AS UNDER : I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DISCLOSED AGRICULTURAL INCOME OF RS.60,240/ - . THE ASSESSEE EXPLAINED THAT THE ASSESSEE HAD AGRICULTURAL LAND OF AC.2.00 FROM WHICH HE HAS PRODUCED SUGAR CANE WORTH RS.1,19,400/ - . THE ASSESSING OFFICER MADE ENQUIRIES THROUGH INCOME TAX INSPECTOR WHO REPORTED THAT THE ASSESSEE COULD NOT PRODUCE ANY DETAILS OF SUC H LANDED PROPERTY AND OTHER DETAILS RELATING TO AGRICULTURAL INCOME. THEREFORE, THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE ABOUT AGRICULTURAL INCOME AND MADE ADDITION OF RS.60,240/ - AS INCOME FROM OTHER SOURCES. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT HE CARRIED OUT AGRICULTURAL ACTIVITY AND RECEIVED INCOME FROM THE SAME FOR RS.60,240/ - . HE FURNISHED DETAILS LIKE OWNERSHIP OF THE LAND, AGRICULTURAL ACTIVITY CARRIED OUT AND YIELD RECEIVED ETC. THE ASSESSING OFFICER REJECTED THE CLAIM AND ALLEGED THAT THE ASSESSEE HAS NOT FURNISHED ANY DETAILS. HE RELIED ON THE REPORT FURNISHED BY THE REPORT OF THE INSPECTOR WHO CONFIRMED THAT THE ASSESSEE DID NOT CARRY THE AGRICULTURAL ACTIVITY DURING THE ASSESSMENT YEAR. WITHOUT KEEPING ANY M ATERIAL ON RECORD TO SAY THAT THE ASSESSEE HAS NOT CARRIED OUT THE AGRICULTURAL ACTIVITY, TREATING THE AGRICULTURAL INCOME AS TAXABLE INCOME AND ADDED THE SAME TO THE RETURNED INCOME WAS UNJUST AND ARBITRARY. THE CIT(A) CALLED FOR A REMAND REPORT WHO VIDE LETTER DATED 17.1.2014 STATED THAT THE ASSESSEE COULD NOT FURNISH THE SOURCE OF AGRICULTURAL INCOME OF RS.60,240/ - AND THE ADDITION WAS JUSTIFIED AS INCOME FROM OTHER SOURCES.. IN RESPONSE TO THE REMAND REPORT, THE ASSESSEE REITERATED THE SUBMISSIONS MAD E EARLIER. 5 ITA NO.208 /CTK/2014 ASSESSMENT YEAR :2009 - 2010 THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT IT WAS A SETTLED PRINCIPLE OF LAW THAT THE BURDEN IS ON THE ASSESSEE TO PROVE THAT THE INCOME WAS AGRICULTURAL INCOME. HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GENKATESWAMY NAIDU, 29 ITR 529 (SC), WHEREIN, IT HAS BEEN HELD THAT IN ORDER TO CLAIM AN INCOME WHICH THE ASSESSEE CONSIDERS AS AGRICULTURAL INCOME, THE ASSESSEE HAS TO PUT BEFORE THE AUTHORITIES MATERIALS WHICH WILL ENABLE THEM TO COME TO A CONCLUSION THAT THE INCOME WHICH WAS SOUGHT TO BE ASSESSED WAS AGRICULTURAL INCOME. IT WAS NOT FOR THE AUTHORITIES TO PROVE THAT IT WAS NOT AGRICULTURAL INCOME. HE OBSERVED THAT FROM PERUSAL OF ASSESSMENT RECORDS, IT IS SEEN THAT THE ASSESSEE F ILED A LEASE DEED OSTENSIVELY SHOWING THAT HE HAD TAKEN AGRICULTURAL LAND ON LEASE FROM 1.2.2008 TO 31.9.2009 FOR RS.4,000/ - . THE ASSESSEE STATED THAT HE PRODUCED SUGAR CANE ON SUCH LEASED LAND AND THE INCOME WAS DERIVED THEREFROM. HE OBSERVED THAT MOST OF THE FAMILY MEMBERS OF THE ASSESSE, WHOSE APPEALS ARE BEING DISPOSED OF NAMELY, NATABAR NATH, SMT. SUNA NATH, PRADIP KUMAR DAS, KHETRABASI NATH, BATAKRUSHNA NATH AND RANJAN KUMAR NATH HAVE ALL CLAIMED THAT THEY HAD DERIVED AGRICULTURAL INCOME BY WAY OF SALE OF SUGAR CANE OUT OF LEASED LAND. IF THEIR CONTENTIONS ARE ACCEPTED THEN THE TOTAL SUGAR CANE APPARENTLY SOLD BY THE FAMILY MEMBERS OF THE ASSESSEE WILL EXCEED RS.8 LAKHS. HE OBSERVED THAT IT WAS SURPRISING THAT THE ASSESSEE WAS UNABLE TO GIVE A SHRE D OF EVIDENCE IN SUPPORT OF HIS SUGAR CANE CULTIVATION OR IN SUPPORT OF SALE OF SUCH SUGAR CANE WHICH WILL NORMALLY BE TO A SUGAR MILL. IN ABSENCE OF ANY SUCH EVIDENCE, HE WAS NOT INCLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE REGARDING ITS CLAIM OF AG RICULTURAL INCOME. THEREFORE, HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER TREATING THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AS INCOME FROM OTHER SOURCES AND DISMISSED THE GROUND OF APPEAL OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE IS IN APP EAL BEFORE ME. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. I FIND AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN TOTALITY THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE INCOME OF RS.60,240/ - SHOWN BY THE ASSESSEE AS AGRICULTURAL INCOME BUT TREATED THE SAME AS INCOME FROM OTHER SOURCES OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE EVIDENCE BEING SUGAR CANE CULTIVATION AND SALE OF SUGAR CANE. BEFORE ME ALSO THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE IN THAT REGARD. THEREFORE, I FIND NO GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES AND DISMISS THE GROUND OF APPEAL OF THE ASSESSEE. 6 ITA NO.208 /CTK/2014 ASSESSMENT YEAR :2009 - 2010 9. FOLLOWING THE SAME, I CONFIRM THE ORDER OF THE LD CIT(A) AND DISMISS TH E GROUND OF APPEAL OF THE ASSESSEE. 10. IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE INTEREST ON TERM DEPOSIT I N BANK. 11. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, ASSESSING OFFICER OBSERVED THAT THE ASSESSEE H AD FIXED DEPOSITS OF RS.31,32,400 / - WITH MICRO FINANCE. HE ESTIMATED THE INTEREST @ 10% ON THE DEPOSIT ON A CCRUAL BASIS AND ADDED RS.13,240 / - TO THE INCOME OF THE ASSESSEE , WHICH WAS CONFIRMED BY THE CIT(A). 12. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORIT IES. HE CONTENDED THAT INTEREST INCOME OF FIX ED DEPOSIT WAS OFFERED TO TAX BY CONSISTENTLY FOLLOWING METHOD OF OFFERING INTEREST INCOME TO TAX IN THE YEAR OF RECEIPT. WHEN QUESTIONED BY THE BENCH WHAT IS THE EVIDENCE THAT THE ASSESSEE HAS OFFERED TO TAX THE INTEREST INCOME ON FIXED DEPOSIT OF RS.1,32,400/ - IN TH E YEAR ON RECEIPT, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE ANY SUCH EVIDENCE. IN ABSENCE OF THE SAME, THE ARGUMENT OF THE LD A.R. OF THE ASSESSEE CANNOT BE ACCEPTED. THEREFORE, I DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A),WHICH IS HEREBY CONFIRMED AND GROUND OF APPEA L OF THE ASSESSEE IS DISMISSED. 7 ITA NO.208 /CTK/2014 ASSESSMENT YEAR :2009 - 2010 . 13 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRO NOUNCED IN THE OPEN COURT ON 28 /03 /2017 IN THE PRESENCE OF PARTIES. S D/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 2 8 /03 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : RANJAN KUMAR NATH , POST OFFICE ROAD, KORAPUT 2. THE RESPONDENT. ITO, WARD - 2, JEYPORE 3. THE CITA), BERHAMPUR 4. PR.CIT , BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//