Shri Rameshbhai N. Vekaria (HUF), Rajkot V. The ITO, Ward-2(3), Rajkot

ITA 231/RJT/2007

• Counselvise Citation: 23124914 RSA 2007
• Duration Of Justice: 4 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 15-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI D.K. TYAGI (JUDICIAL MEMBER) AND SHRI A .L. GEHLOT (AM) I.T.A. NO.231/RJT/2007 (ASSESSMENT YEAR 2004-05) SHRI RAMDESHBHAI N VEKARIA (HUF) VS ITO, WD.2(3) T.R. DOSHI & CO, CAS RAJKOT 501/4, EVEREST OPP SHASTRI MAIDAN SUBHASH ROAD, RAJKOT PAN : AACHV0943B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KALPESH DOSHI RESPONDENT BY: SHRI MK SINGH DATE OF HEARING : 26-09-2011 DATE OF PRONOUNCEMENT : 30-09-2011 O R D E R PER D.K. TYAGI, JM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)- III, RAJKOT DATED 18-01-2007 AND PERTAINS TO ASSESS MENT YEAR 2004-05. 2. THE SOLE GROUND RAISED IN THE APPEAL PERTAINS TO CONFIRMATION OF ADDITION OF RS.22,035 AS UNEXPLAINED AGRICULTURE EX PENSES U/S 69C OF THE I.T. ACT. 3. THE ASSESSEE IN THE RETURN OF INCOME FILED HAS D ECLARED AGRICULTURAL INCOME OF RS.3,43,221 AND EXPENSES OF RS.98,092 THE REOF. THE ASSESSING ITA NO.231/RJT/2007 2 OFFICER, HOWEVER, FOLLOWING THE DECISION OF THE ITA T, AHMEDABAD BENCH-A IN THE CASES OF SHRI DHIRUBHAI L NAROLA, SHRI BABUB HAI L NAROLA & SHRI DALSUKHBHAI L NAROLA VS ITO, WD.9(1), SURAT IN IT A PPEAL NO.2190, 2191 & 2192/AHD.2004 DATED 17-09-2004 HAS ATTRIBUTED 40% OF THE GROSS AGRICULTURAL RECEIPTS EXPENDITURE TOWARDS THE AGRIC ULTURAL ACTIVITIES. THIS RESULTED IN AN ADDITION OF RS.39,196 U/S 69C OF THE ACT. ON APPEAL, THE CIT(A) ESTIMATED THE SAME AT 35%. THIS RESULTED IN CONFIRMATION OF ADDITION TO THE EXTENT OF RS. 22,025 AS AGAINST ADD ITION OF RS.39,196 MADE BY THE ASSESSING OFFICER U/S 69C OF THE ACT. 4. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE BEFO RE US HAS PLACED A COPY OF THE ORDER OF THE TRIBUNAL DATED 28-02-2007 IN THE CASE OF SHRI LABHUBHAI NAGDANNBHAI AHIR IN ITA NO.420/RJT/2006 F OR THE ASSESSMENT YEAR 2004-05 TO BUTTRESS THE POINT THAT THE ITAT, U NDER SIMILAR SET OF FACTS HAS DELETED THE ADDITION. IN THIS CASE ALSO, THE A SSESSING OFFICER ESTIMATED THE EXPENDITURE TOWARDS AGRICULTURAL ACTIVITIES AT 40% AND THE CIT(A) BROUGHT IT DOWN TO 35%. HOWEVER, THE TRIBUNAL TAKI NG INTO ACCOUNT THE PAST HISTORY OF THE CASE HAS KNOCKED DOWN THE ADDIT ION ON THE BASIS OF THE FOLLOWING FINDINGS: 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE ASSESSEE IS HAVING 17 ACRES OF AND AT MOTA MAHUVA (2 ACRES) AND ISHWARIYA (15 ACRES). WE FIND THAT THE ASSESSEE IS FILING RETURN OF INCOME FOR THE ASSESSM ENT YEAR ITA NO.231/RJT/2007 3 2001-02. THE ASSESSEE HAS SHOWN THE INCOME AND EXP ENSES FOR PRECEDING THREE YEARS, WHICH IS REPRODUCED AS U NDER: A.Y. AGRICULTURE INCOME AGRICULTURE EXPENSES PERCENTAGE OF EXPENSES 2001-02 2,38,925/- 70,710/- 29.59 2002-03 2,68,860/- 81,336/- 30.25 2003-04 2,21,660/- 50,015/- 22.56 2004-05 2,90,139/- 73,744/- 25.42 FROM THE ABOVE TABLE, IT IS SEEN THAT THE EXPENSES IN PERCENTAGE DURING THE PERIOD FROM 2001-02 TO 2004-0 5 RANGES FROM 29.59% TO 30.25% BEING THE MINIMUM AND THE MA XIMUM RESPECTIVELY. WE FIND THAT DURING THE YEAR UNDER C ONSIDERATION THE ASSESSEE HAS CLAIMED EXPENSES OF RS.73,744 AS A GAINST THE GROSS RECEIPTS OF RS.2,90,139 AND THE EXPENSES IN PERCENTAGE COMES TO ABOUT 25.42%. CONSIDERING THE EXPENSES SHOWN BY THE ASSESSEE IN THE EARLIER YEARS , THE EXPENSES SHOWN BY THE ASSESSEE APPEARS TO BE MORE REASONABLE. FURTHER, THERE IS NO MATERIAL ON RECOR D TO ESTIMATE THE EXPENSES AT 40% AS ADOPTED BY THE ASSE SSING OFFICER OR 35% AS ADOPTED BY THE CIT(A). THEREFORE , CONSIDERING ALL THESE WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION MADE BY WAY OF ESTIMATION CANNOT BE SUSTAI NED AND THEREFORE, THE SAID ADDITION IS DELETED. WE ORDER ACCORDINGLY. 5. WE ARE IN AGREEMENT WITH THE CONTENTION OF THE L D.REPRESENTATIVE THAT THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSI DERATION ARE SIMILAR TO THAT IN THE DECISION QUOTED ABOVE. WE ARE ALSO OF THE OPINION THAT IN AN AGRICULTURAL ACTIVITY, THE EXPENDITURE CANNOT REMAI N CONSTANT AT A CERTAIN PERCENTAGE. TOO MANY CONTRIBUTING FACTORS SUCH AS NATURAL CALAMITY, ETC. HAS TO BE GIVEN DUE CREDENCE. THEREFORE, A ATTRIBU TING A UNIFORM RATE OF EXPENDITURE FOR THE AGRICULTURAL ACTIVITIES WOULD B E TOO HARSH. IN THE INSTANT CASE THE EXPENDITURE DISCLOSED BY THE ASSESSEE WORK S OUT TO 27% PLUS, ITA NO.231/RJT/2007 4 WHICH, IN OUR CONSIDERED OPINION, VIEWED FROM THE E ARLIER ORDER OF THE TRIBUNAL QUOTED ABOVE, IS QUITE REASONABLE. THEREF ORE, RESPECTFULLY FOLLOWING THE PRECEDENT, WE DELETE THE ADDITION OF RS. 22,025 SUSTAINED BY THE CIT(A). 6. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-09-2011. SD/- SD/- (A.L. GEHLOT) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 30 TH SEPTEMBER, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-III, RAJKOT 4. THE CIT, II, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT