Shri Upendrabhai D.Prajapati, Baroda V. The Dy.CIT.,Circle-2(2), Baroda

ITA 237/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63141 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Keywords: Business income

Judgement Text

ITA NO 237/ AHD/2011 A.YR.. 2007 -08 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AH MEDABAD (BEFORE SHRI D. K. TYAGI, JM & SHRI ANIL CHATURVEDI A.M.) I.T.A. NO.237 /AHD/2011. (ASSESSMENT YEAR: 2007-08 ) SHRI UPENDRA D.PRAJAPATI, SATYANARAYAN BHAVAN, REFINERY ROAD, GORWA, BARODA. (APPELLANT) VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(2), AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA. (RESPONDENT) PAN: ADOPP 0637 R APPELLANT BY : MR. TEJ SHAH RESPONDENT BY : MR. D.K.SINGH, SR.D.R. ( )/ ORDER DATE OF HEARING : 10-10-201 2 DATE OF PRONOUNCEMENT : 23-11-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THE ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM B USINESS, OTHER SOURCES, AGRICULTURAL AND CAPITAL GAIN. HE FILED RE TURN OF INCOME ON 31-3- 2008 DECLARING TOTAL INCOME OF RS.17,71,095/-.THE C ASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS FRAMED U/S.143(3) V IDE ORDER DATED 29- 12-2009 AND THE TOTAL INCOME WAS DETERMINED AT RS.2 2,94,695/- AFTER MAKING VARIOUS ADDITIONS. THE ASSESSEE PREFERRED AP PEAL BEFORE THE CIT ITA NO 237/ AHD/2011 A.YR.. 2007 -08 2 (A) AND PARTIAL RELIEF WAS GRANTED VIDE ORDER DATED 2-11-2010. AGGRIEVED BY THE ORDER OF CIT (A), THE ASSESSEE IS NOW IN APP EAL BEFORE US. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. OBSERVED THAT THE ASSESSEE HAS DECLARED TO HAVE EARNED NET AGRICU LTURAL INCOME OF RS.8,21,480/-.THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF THE AGRICULTURAL INCOME EARNED BY IT. FROM COPIES OF BI LLS SUBMITTED BY THE ASSESSEE A.O. OBSERVED THAT THE BILLS DID NOT HAVE ADDRESS OF THE PURCHASER. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS A.O. NOTED THAT THE ASSESSEE HAD CLAIMED TO HAVE EARNED GROSS AGRIC ULTURAL INCOME OF RS.18,71,095/- AND IN SUPPORT OF THIS CLAIM THE ASS ESSEE HAD FILED COPY OF BILLS OF M/S. PARSHWA TRADING CO AND M/S. HARSH CO RPORATION. FROM THE COPIES OF BILLS A.O. NOTICED THAT THE BILL NUMBERS WERE THE SAME THOUGH OF NEARER DATES IN THE CASE OF ASSESSEES RELATIVES. H E THEREFORE CONCLUDED THAT THE ASSESSEE WAS COPYING THE BILLS ISSUED TO H IS RELATIVES TO PROVE HIS AGRICULTURAL INCOME. HE ACCORDINGLY CONCLUDED THAT THE ASSESSEE WAS TREATING HIS BUSINESS INCOME AS AGRICULTURAL INCOME AND ACCORDINGLY OUT OF THE NET AGRICULTURAL INCOME OF RS.8,21,480/- HE TRE ATED RS.4,00,000/- AS THE BUSINESS INCOME OF THE ASSESSEE AND ADDED IT TO THE TOTAL INCOME. 3. AGGRIEVED BY THE ADDITION, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT (A). 4. THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT (A) WERE NOT ACCEPTED BY HIM AND HE UPHELD THE ORDER OF THE A.O. BY HOLDING AS UNDER:- ITA NO 237/ AHD/2011 A.YR.. 2007 -08 3 2.3. I HAVE GIVEN DUE CONSIDERATION TO FACTS ON RE CORD AND TO THE SUBMISSION OF THE APPELLANT. THE APPELLANT HAD PROD UCED BILLS FROM M/S. PARSHWA TRADING CO. AND HARSH CORPORATION TO S UBSTANTIATE ITS CLAIM OF AGRICULTURAL INCOME. THE A.O. HAS DISCUSSE D THE ISSUE IN DETAIL IN THE ASSESSMENT ORDER. THE BILLS DID NOT H AVE THE ADDRESS OF THE PARTIES SO NO FURTHER VERIFICATION WAS POSSIBLE . SECONDLY SIMILAR NUMBER BILLS WITH PROXIMATE DATES WERE USED BY THE OTHER FAMILY MEMBER IN THEIR CASES. THE A.O. ALSO DID NOT FIND ANY EVIDENCE OF THE APPELLANT HAVING DRUM STICKS TREES. BEFORE ME I T WAS STATED THAT BUYERS START NEW SERIAL NUMBERS ON EACH DAY HENCE S ERIAL NUMBERS ARE REPEATED. THE APPELLANT HAS ALSO ARGUED ABOUT P AST HISTORY OF AGRICULTURAL INCOME BEING ACCEPTED. HAVING GIVEN CA REFUL CONSIDERATION, I FIND THAT THE APPELLANT HAS FAILED TO SUBSTANTIATE SATISFACTORILY HAVING EARNED AGRICULTURAL INCOME TO THE EXTENT SHOWN. EVIDENCE PRODUCED FOR EARNING GROSS AGRICULTURAL RE CEIPTS TO THE EXTENT OF MORE THAN RS.18,71,095/- IS NOT RELIABLE. THE A.O. HAS RIGHTLY RESTRICTED THE NET AGRICULTURAL INCOME TO R S.3,71,480/- FROM RS.8,21,480/- SHOWN. 5. AGGRIEVED BY THE ORDER OF CIT (A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, THE LD. A.R. SUBMITTED THAT THE ASSES SEE ALONG WITH HIS FAMILY MEMBERS WAS HOLDING SUBSTANTIAL AREA OF AGRI CULTURAL LAND AND CARRYING OUT AGRICULTURAL ACTIVITIES. THE INCOMES EARNED FROM AGRICULTURAL OPERATIONS IN EARLIER YEARS HAVE BEEN ACCEPTED IN T HE ASSESSMENTS MADE U/S.143 (3). HE POINTED OUT TO THE FACT THAT THE A SSESSEE HAD AGRICULTURAL INCOME IN A.Y. 2004-05 OF RS.14,11,195/-, IN A.Y. 2 005-06 OF RS.13,39,932/- AND IN A.Y. 2006-07 OF RS. 9,44,715/ -. IT WAS SUBMITTED THAT SINCE THERE WAS NO CHANGE OF FACTS, AGRICULTURAL IN COME AS SUBMITTED BY THE ASSESSEE SHOULD HAVE BEEN ACCEPTED. THE LD. A.R. FU RTHER SUBMITTED THAT THE EARNING OF AGRICULTURAL INCOME WAS DOUBTED BY T HE A.O. FOR THE REASON THAT ON VERIFICATION OF THE BILLS HE OBSERVED THAT SERIAL NUMBERS OF INVOICES ITA NO 237/ AHD/2011 A.YR.. 2007 -08 4 ISSUED WERE IDENTICAL FOR DIFFERENT DATES. LD. A.R. FURTHER SUBMITTED THAT THE BUYERS FOLLOWED THE PRACTICE OF ISSUING BILLS START ING WITH SERIAL NUMBER ONE ON EACH DAY AND THEREFORE THERE COULD BE A POSSIBIL ITY OF THE SAME SERIAL NUMBER BEING REPEATED NUMBER OF TIMES DURING THE YE AR. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD SOLD AGRICULTURAL C OTTON THROUGH AGRICULTURAL PRODUCE MARKET COMMITTEE(APMC) KARJAN & APMC HAS ALSO ISSUED RECEIPTS FOR THE SAME. IN VIEW OF THESE FACT S, THE LD. A.R. SUBMITTED THAT THE A.O. HAD ERRED IN TREATING RS.4 LAC AS BUS INESS INCOME INSTEAD OF AGRICULTURAL INCOME. IN THE ALTERNATE HE SUBMITTED THAT THE MATTER BE REMITTED BACK TO THE FILE OF A.O. FOR VERIFICATION. ON THE OTHER HAND THE LD. D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE A.O. HAS HELD THAT THE BI LLS ISSUED BY THE BUYERS TO BE UNRELIABLE FOR THE REASON THAT THE BILLS DID NOT HAVE ADDRESS OF THE PARTIES AND SIMILAR BILL NUMBERS WITH PROXIMATE DATES WERE USED BY THE OTHER FAMILY MEMBERS IN THEIR CASES. WE FIND THAT THE ASSESSEE H AS EARNED INCOME FROM AGRICULTURAL IN EARLIER YEARS AND HAS ALSO BEE N ASSESSED AS SUCH. ASSESSEE HAS ALSO SUBMITTED THAT THE PRODUCES HAS A LSO BEEN SOLD THROUGH APMC. IN VIEW OF THE TOTALITY OF THE FACTS WE FEEL THAT IN THE INTEREST OF JUSTICE AND FAIR-PLAY ONE MORE OPPORTUNITY BE GRANT ED TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM OF EARNING AGRICULTURAL INCO ME BEFORE THE A.O. WE ACCORDINGLY REMIT THE MATTER BACK TO THE FILE OF A. O. WITH THE DIRECTION TO HIM TO VERIFY THE CLAIM OF THE ASSESSEE AND PASS A SPEA KING ORDER. NEEDLESS TO SAY THAT THE A.O. SHOULD GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL ALSO CO-OPERATE BY FUR NISHING ALL THE NECESSARY DOCUMENTS REQUIRED BY THE A.O. FOR FINALI ZING THE CASE AND SHALL ITA NO 237/ AHD/2011 A.YR.. 2007 -08 5 NOT SEEK ADJOURNMENT ON FRIVOLOUS GROUNDS. THUS, TH E APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 23 11 - 2012. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-II, BARODA. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO 237/ AHD/2011 A.YR.. 2007 -08 6 1.DATE OF DICTATION 21 - -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 21 / 11 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..