Praham Perfumery, Baroda V. The Income tax Officer,Ward-5(4), Baroda

ITA 2186/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85640 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 23-12-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 28-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M K PATEL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 2186 / AHD/ 20 1 0 (A SSESSMENT YEAR: 2003 - 04 ) PRAHAM PERFUMERY PROP: JAGDISHCHANDRA M. BHATT 28/B, ASHIRWAD SOCIETY, HARNI WARASIA RING ROAD, BARODA V/S THE I.T.O., WARD 5 (4), BARODA (APPELLANT) (RESPONDENT) PAN: ACNPB 4785F APPELLANT BY : SHRI M.K. PATEL, A.R. RESPONDENT BY : SHRI B.L. YADAV, SR. D.R. ( )/ ORDER DATE OF HEARING : 23 - 12 - 2014 DATE OF PRONOUNCEMENT : 23 - 01 - 2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - V , BARODA DATED 27.04.2010 FOR A.Y. 2003 - 04. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDE R. 3. ASSESSEE IS AN INDIVIDUAL AND PROPRIETOR OF PRAHAM PERFUMERY AND IS STATED TO BE ENGAGED IN THE BU SINESS OF PURCHASE AND SALE OF A GA RB ATTI S . ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 03 - 04 ON 30.12.2003 DECLARING TOTAL INCOME OF RS. 70,958/ - AND HAD ALSO SHOWN AGRICULTURAL INCOME OF RS. 2,04,518/ - . THE CASE ITA NO 2186/AHD/2010 . A.Y. 2003 - 04 2 WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 03.03.2006 AND THE TOTAL INCOME WAS DETERMINED AT RS. 12,12,090/ - . AGGRIEVED BY THE ORD ER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DATED 27.04.2010 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS; - 1. THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE CLAIM OF AGRICULTURAL INCOME TO RS.68,173/ - AS AGAINST THE APPELLANT'S CLAIM OF RS.3,01,134/ - THEREBY CONFIRMING THE ADDITIONS OF RS.2,32,961/ - MADE ON ACCOUNT OF AGRI CULTURAL INCOME. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIONS OF RS. 1,35,416/ - MADE ON ACCOUNT OF THE ALLEGED UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT. 3. THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES TO THE EXTENT OF RS. 11,827/ - . 4. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DELETE OR MODIFY THE ABOVE GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. GROUND NO. 1 & 2 ARE CONSIDERED TOGETHER 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NOTICED THAT ASSESSEE HAD CLAIMED TO HAVE EARNED GROSS AGRICULTURE INCOME OF RS. 3,01,134/ - AND AFTER DEDUCTING AGRICULT URAL EXPENSES OF RS. 96,015/ - H E HAD SHOWN NET AGRICULTURE INCOME OF RS. 2,04,518/ - . THE ASSESSEE WAS ASKED TO FURNISH DETAILS IN SUPPORT OF HIS CLAIM OF EARNING AGRICULTURAL INCOME. ON THE BASIS OF THE DETAILS FURNISHED BY ASSESSEE A.O NOTED THAT ASSESSEE HAD PURCHASED AGRICULTURAL LAND ONLY IN THE MONTH OF DECEMBER, 2002 AND JANUARY 2003 AND HAD NO AGRICULTURAL LAND BEFORE 10.12.2002. HE ALSO NOTICED THAT ASSESSEE HAD CLAIMED TO HAVE SOLD THE AGRICULTURE PRODUCE OF COTTON FROM APRIL, 2002 TO JANUARY 2003 WHEN THE ASSESSEE WAS NOT HAVING ANY LAND. HE ALSO NOTICED THAT ASSESSEE HAD N OT FURNISHED ANY EVIDENCE TO SHOW THE AGRICULTURE PRODUCE. HE THEREFORE CONSIDERED THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE OF RS. 3,01,134/ - TO BE FROM UNDISCLOSED SOURCES AND ADDED TO THE INCOME. A.O ALSO NOTICED THAT IN THE BANK AC COUNT MAINTAINED WITH UTI BANK , THERE WERE CASH DEPOSITS TO THE TUNE O F RS. 4,36,550/ - . THE A SSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN BANK TO WHICH IT WAS S UBMITTED THAT THE CASH DEPOSITS REPRESENTS THE NET ITA NO 2186/AHD/2010 . A.Y. 2003 - 04 3 AGRICULTURE INCOME. THE SUBMISSION OF THE ASSESSEE WITH RESPECT TO DEPOSITS WAS NOT FOUND ACCEPTABLE TO THE A.O HE CONSIDERED THE DEPOSITS IN BANK TO BE UNEXPLAINED AND HE CLUBBED/TELESCOPED THE ADDITION MADE ON ACCOUNT OF UNDIS CLOSED INCOME FROM AGRICULTURAL SOURCES AND MADE ADDITION OF RS. 1,35,416/ - . AGGRIEVE D BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: - 4.3 I HAVE CAREFULLY CONSIDERED THE F ACTS OF THE CASE, THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. DURING ASSESSMENT AND APPELLATE PROCEEDINGS, NO EVIDENCE COULD BE PRODUCED INDICATING THAT THE APPELLANT WAS GANOTIA ENJOYING 50% BENEFIT OF CROPS, THE EVIDENCES AVAILABLE ONLY CO NFIRM THAT HE BECAME OWNER OF LAND IN DECEMBER, 2002. ACCORDINGLY, THE CLAIM OF AGRICULTURAL INCOME IS RESTRICTED TO AGRICULTURAL INCOME FOR 4 MONTHS I.E. RS.68,173/ - (2,04,518 X 4/12). CONSEQUENTLY, THE ADDITION FOR CASH DEPOSITS IN BANK IS SUSTAINED TO T HE EXTENT OF RS.3,68,377/ - (RS.4,36,550 - RS.68,173). THE NET EFFECT IS THAT THE ADDITIONS MADE BY AO IN GROUND NO. 1 & 2 ARE SUSTAINED IN TOTALITY ALBEIT FOR DIFFERENT REASONS. 5. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND CIT(A). HE FURTHER SUBMITTED THAT ASSESSEE WAS CULTIVATING COTTON THROUGHOUT THE YEAR ON THE SAME AGRICULTUR AL LAND UP TO DECEMBER 2002 AS G ANOTIA (AGRICULTURAL LABOURER) AND THEREBY WAS GETTING 50% SHARE IN THE TOTAL PRODUCE OF THE CROP. IN DECEMBER 2002 , ASSESSEE PURCHASED THE AGRICULTURAL LAND ALONG WITH THE STANDING CROPS. HE FURTHER SUBMITTED THAT ASSESSEE HAD FURNISHED THE COPY OF 7/12 STATEMENTS AND OTHER PROOF OF LAND HOLDINGS. HE ALSO PLACED ON RECORD THE COPY OF THE AGREEMENT FOR PURCHASE OF LAND. THE LD. A.R. FURTHER SUBMITTED THAT ASSESSEE HAD SHOWN AGRICULTURAL INCOME OF RS. 1,52,800/ - IN A.Y. 04 - 05. HE PLACED ON RECORD THE COPY OF THE RETURN OF INCOME AND THE COMPUTATION O F TOTAL INCOME. HE THEREFORE SUBMITTED THAT IN THE PRESENT CASE, NO ADDITION IS CALLED FOR. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE INCOME EARNED FROM A GRICULTURAL PRODUCE HAS BEEN DOUBTED BY THE A.O FOR THE REASON THAT THE ASSESSEE BECAME THE OWNER OF THE LAND FROM WHICH THE CROPS WAS CULTIVATED AND SOLD , ONLY IN THE MONTH OF DECEMBER, 2002. IT IS ASSESSEE S SUBMISSION THAT PRIOR TO DE CEMBE R 2002, HE WAS WORKING AS ITA NO 2186/AHD/2010 . A.Y. 2003 - 04 4 G ANOTIA (FARM LABOURER) AND WAS THEREFORE ENJO YING 50% BENEFIT OF THE CROPS A N D IN DECEMBER 2002, THE ASSESSEE HAS PURCHASED THE LAND ALONG WITH THE STANDING CROPS AND THEREFORE HE BECAME THE OWNER OF THE ENTIRE CROPS AND IN SUPPO RT OF WHICH ASSESSEE HAS ALSO FILED THE COP Y OF THE PURCHASE DEEDS OF LAND. THE AFORESAID SUBMISSIONS HAVE NOT BEEN CONTROVERTED BY REVENUE BY PLACING ANY MATERIAL ON RECORD . WE FURTHER FIND THAT AGAINST THE TOTAL ADDITION OF AGRICULTURAL INCOME MADE BY A. O, CIT(A) RESTRICTED THE AGRICULTURAL INCOME FOR 4 MONTHS I.E. FROM DECEMBER TO MARCH 2003. CONSIDERING THE FACT THAT THE SUBMISSIONS OF THE ASSESSEE HAS N OT BEEN CONTROVERTED BY REVENUE AND IN VIEW OF THE FACT THAT ASSESSEE S OWN 70 ACRES OF LAND AND CONS IDERING THE FACT THAT ASSESSEE HAS DISCLOSED THE AGRICULTURAL INCOME IN SUBSEQUENT YEARS WHICH HAS BEEN ACCEPTED BY REVENUE W E ARE OF THE VIEW THAT CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION TO RS. 3,68,377/ - BUT HOWEVER IN VIEW OF THE FACT THAT ASSESSEE HAD NOT FURNISHED THE COPY OF SALES BILLS OF AGRICULTURE PRODUCE SOLD BY HIM BEFORE THE A.O , W E ARE OF THE VIEW THAT CONSIDERING THE TOTALITY OF THE FACTS , THE LUMP SUM DISALLOWANCE OF RS. 75,000/ - WILL MEET THE ENDS OF JUSTICE . WE DIRECT ACCORDIN GLY. IN THE RESULT, THIS GROUND IS PARTLY ALLOWED. GROUND NO. 3 IS WITH RESPECT TO HOUSEHOLD EXPENSES. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF HOUSEHOLD EXPENSES AND ITS SOURCE TO WHICH ASSESSEE SUB MITTED THAT RS. 25,000/ - WAS FROM INCOME EARNED FROM BUSINESS AND 80,000/ - WAS FROM AGRICULTURAL INCOME. SINCE T HE SUBMISSION OF THE ASSESSEE OF HAVING AGRICULTURAL INCOME WAS NOT FOUND ACCEPTABLE TO THE A.O, HE CONSIDERED THE HOUSEHOLD EXPENSE OF RS. 80,0 00/ - TO BE UNEXPLAINED AND ADDED IT TO THE INCOME. AGGRIEVE D BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: - 6.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE SUB MISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. IN PARA 4.3 ABOVE, THE CLAIM OF AGRICULTURAL INCOME WAS ACCEPTED TO THE EXTENT OF RS.68,173/ - . ACCORDINGLY, THE ADDITION IS SUSTAINED TO THE EXTENT OF RS. 11,827/ - (RS.80,000 - RS.68,173). ITA NO 2186/AHD/2010 . A.Y. 2003 - 04 5 9. AGGRIEVED B Y THE AFORESAID ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 10. BEFORE US, LD. A.R. REITERATED THE SUBMISSION MADE BEFORE A.O AND CIT(A). HE FURTHER SUBMITTED THAT NO ADDITION WAS CALLED FOR. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A. O. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) HAS GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. BEFORE US, NO MATERIAL HAS BEEN PLACED ON RECORD BY THE ASSESSEE TO CONTROVERT THE FINDINGS OF CIT(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF ASSESSEE IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 23 - 01 - 201 5 . SD/ - SD/ - (G.C. GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. T HE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD