M/s. Lila Farm, Aurangabad V. ITO, Ward 2(1), Aurangabad

ITA 2101/PUN/2012

• Counselvise Citation: 210124514 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 29-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: SUNIL PATHAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 2101 /PN/20 1 2 ASSESSMENT YEAR : 200 8 - 09 M/S. LILA FARM, OPP. OLD INCOME TA X OFFICE, BANSILAL NAGAR, AURANGABAD VS. INCOME TAX OFFICER, WARD 2(1), AURANGABAD (APPELLANT) (RESPONDENT) PAN NO. AABFL6222G APPELLANT BY: SHRI SUNIL PATHAK RESPONDENT BY: SHRI S.P. WALIMBE DATE OF HEARING : 21 - 0 4 - 2014 DATE OF PRONO UNCEMENT : 29 - 0 4 - 2014 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL , THE ASSESSEE HAS CHALLENG ED THE IMPUGNED ORDER OF THE LD. CIT(A) , AURANGABAD DATED 14 - 09 - 2012 F OR THE A.Y. 200 8 - 09. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUND IN THE APPE AL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD ERRED IN FACTS AND ON LAW IN CONFIRMING THE DISALLOWANCE OF 30% OF AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES ON ESTIMATED BASIS. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE AGRICULTURAL ACTIVITY. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2008 - 09 DECLARING TOTAL INCOME AT RS. NIL AND AGRICULTURAL INCOME OF RS.13,76,992/ - . THE ASSESSING OFFICER COMPLETED THE ASSESSMENT OF THE ASSESSEE BY PARTLY 2 ITA NO. 2101/PN/2012, M/S. LILA FARM, AURANGABAD ACCEPTING THE CLAIM OF THE ASSESSEE IN RESPECT OF THE AGRICULTURAL INCOME DECLARED IN THE RETURN OF INCOME. THE ASSESSING OFFICER TREATED RS.8,26,202/ - AS NON - AGRICULTURAL INCOME OUT OF THE AGRICULTURAL INCOME DECLARE D BY THE ASSESSEE AND ASSESSED THE SAME AS AN INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER ONLY ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF THE AGRICULTURAL INCOME TO THE EXTENT OF RS.5,50,790/ - . THE ASSESSEE GAVE THE DETAILS IN RESPECT OF THE FR UITS AND VEGETABLES SOLD WHICH ARE PRODUCED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS NOTED THAT THERE ARE NO DOCUMENTARY EVIDENCE REGARDING THE SALE OF THE FRUITS AND VEGETABLES. IT APPEARS THAT AS NOTED BY THE ASSESSING OFFICER THE SUMMONS WER E ALSO ISSUED WHICH ARE RETURNED UNSERVED. THE ASSESSEE HAS PRODUCED SOME PERSONS FOR CONFIRMATION AND IN THIS BACKGROUND THE ASSESSING OFFICER ALLOWED THE 40% CLAIM OF THE ASSESSEE TOWARDS THE AGRICULTURAL INCOME. 3. THE ASSESSEE CHALLENGED THE FINDING S OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A) AND LD. CIT(A) GAVE THE PART RELIEF TO THE ASSESSEE BASED ON THE FACTS AND FIGURES PROVIDED BY THE ASSESSEE IN RESPECT OF THE AREA UNDER CULTIVATION AND OTHER DETAILS. THE LD. CIT(A) HELD THAT OUT OF THE AG RICULTURAL INCOME DECLARED BY THE ASSESSEE AT RS.13,76,992/ - THE 30% CANNOT BE ACCEPTED AND ONLY TO THE EXTENT OF 70% THE SAME CAN BE ACCEPTED AND ACCORDINGLY SUSTAINED THE ADDITION TO THE EXTENT OF RS. 4,13,100/ - . THE FINDINGS OF THE LD. CIT(A) ARE AS UND ER: 8. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND RIVAL CONTENTIONS. ON PERUSAL OF THE SAME IT HAS BEEN NOTICED THAT THE A.O. HAS ACCEPTED AGRICULTURAL INCOME DECLARED BY THE APPELLANT FIRM AT RS.13,76,992/ - TO THE EXTENT OF 40% AS GENUINE AND HAS DISALLOWED THE SAME TO THE EXTENT OF 60% I.E. RS.8,26,202/ - AND ASSESSED THE SAME AS INCOME FROM OTHER SOURCES. THE A.O. HAS MADE THE ADDITION TO ABOVE EXTENT FOR THE FOLLOWING REASONS 3 ITA NO. 2101/PN/2012, M/S. LILA FARM, AURANGABAD (I) THE APPELLANT HAS NOT FILED ALL THE 7/12 EXTRACTS IN RESPECT OF AGRICULTURAL LAND CLAIMED TO HAVE BEEN OWNED, BUT HAS FILED ONLY PART OF THE SAME. (II) THE APPELLANT COULD NOT PRODUCE EVIDENCE IN SUPPORT OF ITS CONTENTION THAT IT HAS SOLD AGRICULTURAL PRODUCE OF RS.19,27,375/ - (III) THE APPELLANT HAS SOLD AGRICULTUR AL PRODUCE IN THE WEEKLY MARKET, HOWEVER, THE TRANSPORTATION EXPENDITURE HAS BEEN CLAIMED AT RS.1,762/ - ONLY. (IV) THE SUMMONS ISSUED TO 9 PARTIES TO WHOM THE AGRICULTURAL PRODUCE WAS CLAIMED TO HAVE BEEN SOLD BY THE APPELLANT, HOWEVER RECEIVED BACK UNSERV ED. (V) THE APPELLANT COULD PRODUCE ONLY 4 PARTIES WHO HAVE CONFIRMED THAT THEY HAVE PURCHASED FRUITS FROM THE APPELLANT FIRM; HOWEVER, THEY COULD NOT PRODUCE EVIDENCE FOR THE FRUITS PURCHASED AND QUANTUM THEREOF. 8.1 ON THE OTHER HAND THE APPELLANT HAS C LAIMED AS UNDER - (I) THE APPELLANT HAS OWNED SUBSTANTIAL AGRICULTURAL LAND OF 98.245 ACRES AND THE OWNERSHIP OF THE LAND IS ALSO SUPPORTED BY THE 7/12 EXTRACTS FILED BY THE APPELLANT ON THE RECORD OF THE A.O. FURTHER, THE CROPS GROWN WERE ALSO MENTIONED IN THE 7/12 EXTRACTS WHICH SHALL JUSTIFY THE NET AGRICULTURAL INCOME SHOWN BY THE APPELLANT AT RS.13,76,992/ - . (II) THE AGRICULTURAL PRODUCE OF THE APPELLANT WAS PERISHABLE GOODS SUCH AS VEGETABLES AND FRUITS AND HENCE THE SAME HAVE BEEN SOLD IMMEDIATELY TO THE AVAILABLE CUSTOMERS AND TRADERS. IT IS NOT COMPULSORY AND IT IS NOT PRACTICE OF THE FARMERS TO OBTAIN FULL ADDRESSES OF THE PURCHASERS OF GOODS AND HENCE IN THE ABSENCE OF FULL ADDRESSES, THE SUMMONS COULD NOT BE SERVED ON THE 9 PURCHASERS. FURTHER, THE SAID SUMMONSES WERE ISSUED AFTER SUBSTANTIAL PASSAGE OF TIME. (III) THE APPELLANT HAS PRODUCED 4 PERSONS WHO HAVE CONFIRMED THAT THE APPELLANT HAVE SOLD AGRICULTURAL PRODUCE TO THEM BUT DUE TO PASSAGE OF TIME AND NON - MAINTENANCE OF RECORD, THEY COULD NOT FURNISH EXACT QUANTUM OF AGRICULTURAL PRODUCE PURCHASED BY THEM. 4 ITA NO. 2101/PN/2012, M/S. LILA FARM, AURANGABAD (IV) THE AGRICULTURAL PRODUCE I.E. PERISHABLE GOODS HAS BEEN SOLD BY THE APPELLANT IN THE OPEN MARKET TO DIFFERENT CUSTOMERS IN CASH AND HENCE QUESTION OF KEEPING RECORD OF THEIR NAMES AND ADDRESSES DID NOT ARISE. (V) THE APPELLANT HAS MAINTAINED BOOKS OF ACCOUNTS AND ALSO BALANCE SHEET FOR F.Y.2007 - 08 IN WHICH THE FACT OF BOOKS OF ACCOUNTS MAINTAINED HAS BEEN MENTIONED. (VI) THE A.O. HAS CLAIMED THAT THE CONVEYANCE/TRANSPORTATION EXPE NSES HAVE BEEN CLAIMED ONLY AT RS.1,762/ - AND HENCE THIS ASPECT RAISES DOUBT ABOUT SALE OF AGRICULTURAL PRODUCE BY THE APPELLANT FIRM IN THE WEEKLY MARKET AT RS.19,27,375/ - . THIS OBSERVATION OF THE A.O. IS FACTUALLY INCORRECT AS THE APPELLANT HAS INCURRED TRACTOR AND HIRE CHARGES EXPENSES OF RS.28,498/ - TO SUPPLY AGRICULTURAL PRODUCE TO WEEKLY MARKET AND OTHER ACTIVITIES. (VII) THE APPELLANT HAS REASONABLY SHOWN AGRICULTURAL INCOME ONLY AT RS.14.016/ - PER ACRE IN RESPECT OF CASH CROPS LIKE VEGETABLES AND F RUITS CULTIVATED BY IT WHEREAS AS PER A.O., THE INCOME OF THE APPELLANT IS ONLY RS.5,606/ - PER ACRE I.E. RS.5,50,790/ - FROM 98.245 ACRES OF LAND, WHICH IS ON MUCH LOWER SIDE. 8.2 FROM THE ABOVE FACTS AND RIVAL CONTENTIONS OF THE A.O. AND THE APPELLANT IT HAS BEEN NOTICED THAT THERE IS SOME MERIT IN THE CONTENTIONS RAISED BY THE A.O. AND ALSO IN THE CONTENTIONS RAISED BY THE APPELLANT. IT IS KNOWN FACT THAT IN RESPECT OF SALE OF AGRICULTURAL PRODUCE IN THE OPEN MARKET EVIDENCE FOR SALE IS GENERALLY NOT AVAI LABLE AND IT IS NOT PRACTICE OF THE AGRICULTURISTS TO MAINTAIN THE RECORD OF THE SALE. UNLESS THE AGRICULTURAL PRODUCE IS SOLD IN APMC, IT IS DIFFICULT TO OBTAIN/MAINTAIN THE EVIDENCE FOR SALE OF AGRICULTURAL PRODUCE. THE A.O. HAS ESTIMATED THE AGRICULTURA L INCOME OF THE APPELLANT AT RS.5,50,790/ - BY ACCEPTING THE AGRICULTURAL INCOME DECLARED BY THE APPELLANT TO THE EXTENT OF 40%. CONSIDERING THE TOTAL HOLDING OF AGRICULTURAL LAND BY THE APPELLANT, THE SAID ESTIMATION MADE BY THE A.O. IS FOUND TO BE ON LOWE R SIDE. THE APPELLANT HAS CLAIMED THAT THE AGRICULTURAL INCOME REASONABLY SHOWN BY IT WORKS OUT TO RS.14,016/ - PER ACRE AS AGAINST RS.5,606/ - 5 ITA NO. 2101/PN/2012, M/S. LILA FARM, AURANGABAD ESTIMATED/ACCEPTED BY THE A.O. IN VIEW OF THE FACTS DISCUSSED ABOVE AND CONSIDERING THE TOTALITY OF THE FACTS AND TO MEET THE ENDS OF JUSTICE, THE AGRICULTURAL INCOME DECLARED BY THE APPELLANT AT RS.13,76,992/ - IS ACCEPTED TO THE EXTENT OF 70% AND NOT ACCEPTED TO THE EXTENT OF 30%. THE ADDITION, @ 30% OF THE AGRICULTURAL INCOME DECLARED BY THE APPELLANT WORKS OUT TO R S.4,13,100 / - AS AGAINST RS.8,26,202/ - WORKED OUT BY THE A.O. THE A.O. IS DIRECTED TO ASSESS AGRICULTURAL INCOME DECLARED BY THE APPELLANT TO THE EXTENT OF RS.4,13,100/ - AS INCOME FROM OTHER SOURCES. THE APPELLANT GETS RELIEF OFRS.4,13,102/ - . NOW THE ASSES SEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. IN THIS CASE, IT IS SEEN THAT THE ASSESSING OFFICER ISSUED THE SUMMONS AS WELL AS LETTERS TO THE PARTIES AS PER THE INFORMATION GIVEN BY THE ASSESSE BUT THOSE SUMMONS WERE RE TURNED UN SERVED. ON THE PERUSAL OF THE REASONS GIVEN BY THE LD. CIT(A), WE FIND THAT HE HAS TAKEN INTO CONSIDERATION THE AREA UNDER CULTIVATION AND MADE OUT THE REASONABLE ESTIMATION. NO NEW EVIDENCE IS ALSO FILED BEFORE US OTHER THAN PLACED BEFORE LD. C IT(A). N OTHING HAS BEEN PRODUCED BEFORE TO CONTROVERT THE FINDING OF THE LD. CIT(A). IN OUR OPINION THE ESTIMATION MADE BY THE LD. CIT(A) IS VERY REASONABLE AND NO INTERFERENCE IS CALLED FOR. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS CONFIRM AND GROUN D TAKEN BY THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29 - 0 4 - 201 4 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 29 TH APRIL, 2014 6 ITA NO. 2101/PN/2012, M/S. LILA FARM, AURANGABAD COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) , AURANGABAD 4 THE CIT, AURANGABAD 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APP ELLATE TRIBUNAL PUNE