Annakalanjiam Mathivanan, CHENNAI V. ACIT Non Corporate Circle 13, CHENNAI

ITA 2451/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5935 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 27-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. RENGA RAJAN
• Keywords: Set aside
• Section: 22

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2451/CHNY/2018 ( )( / ASSESSMENT YEAR : 2015-16 SMT. ANNAKKALANJIAM MATHIVANAN, NO.91/15, EAST JONES ROAD, SAIDAPET, CHENNAI - 600 015. PAN : AAGPM 1853 P V. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 13, CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI ARJUN RAJ, CA -.+, / 0 / RESPONDENT BY : SHRI S. RENGARAJAN, JCIT 1 / 2$ / DATE OF HEARING : 09.01.2019 34) / 2$ / DATE OF PRONOUNCEMENT : 22.01.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -14, CHENN AI, DATED 29.06.2018 AND PERTAINS TO ASSESSMENT YEAR 2015-16. 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE DISCLOSED A SUM OF 20,00,000/- FROM AGRICULTURE. HOWEVER, THE ASSESSING OFFICER RESTRICTED THE SAME TO 12,00,000/- 2 I.T.A. NO.2451/CHNY/18 AND THE REMAINING AMOUNT OF 8 LAKHS WAS ADDED TO THE TAXABLE INCOME. ACCORDING TO THE LD. COUNSEL, THE CULTIVAT ION MADE BY THE ASSESSEE IS NOT DISPUTED. THE REASON FOR DISALLOWA NCE WAS MADE ONLY ON THE GROUND THAT THE ASSESSEE COULD NOT PROD UCE BILLS AND VOUCHERS FOR SALE OF AGRICULTURAL PRODUCE. ACCORDI NG TO THE LD. COUNSEL, WHEN THE CULTIVATION IS NOT DISPUTED, THE ASSESSING OFFICER OUGHT NOT TO HAVE DISALLOWED ANY PORTION OF AMOUNT DISCLOSED BY THE ASSESSEE. THE LD.COUNSEL FURTHER CLARIFIED THAT TH E ASSESSEE, IN FACT, CULTIVATED 22 ACRES OF LAND. REFERRING TO TH E COPY OF ADANGAL EXTRACT, WHICH IS AVAILABLE AT PAGE 23 TO 27 OF THE PAPER-BOOK, THE LD.COUNSEL SUBMITTED THAT THE ASSESSEE IS CULTIVATI NG PADDY, COCONUT AND TEAK. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING T HE CLAIM OF THE ASSESSEE. 3. ON THE CONTRARY, SHRI S RENGARAJAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT IN THE ABSENCE OF AN Y BILLS FOR SALE OF AGRICULTURAL PRODUCE, THE ASSESSING OFFICER REASONA BLY ESTIMATED THE INCOME AT 12,00,000/-. ACCORDINGLY, THE BALANCE AMOUNT OF 8,00,000/- WAS TREATED AS TAXABLE INCOME. ON A QUE RY FROM THE BENCH WHETHER ANY INVESTMENT WAS SAID TO BE MADE FR OM 3 I.T.A. NO.2451/CHNY/18 AGRICULTURAL INCOME? THE LD. D.R. CLARIFIED THAT N O SUCH INVESTMENT WAS MADE DURING THE YEAR UNDER CONSIDERATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE ARISES FOR CONSIDERATION IS ADDITION OF 8,00,000/- OUT OF 20,00,000/- DISCLOSED BY THE ASSESSEE AS AGRICULTURAL INCOME. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE COULD NOT PRODUCE A NY BILLS AND VOUCHERS FOR SALE OF AGRICULTURAL PRODUCE. THE ASS ESSEE ALSO COULD NOT PRODUCE ANY RECEIPTS FOR EXPENDITURE INCURRED. FROM THE ORDER OF THE ASSESSING OFFICER IT APPEARS THAT THE ASSESS EE HAS FILED CERTIFICATE FROM THE VILLAGE ADMINISTRATIVE OFFICER . THE CIT(APPEALS), HOWEVER, FOUND THAT THE ASSESSEE COUL D NOT ESTABLISH THAT HE WAS CARRYING OUT AGRICULTURAL OPERATION ON THE LAND. THE FACT REMAINS THAT THE ADANGAL EXTRACT AVAILABLE BEFORE T HE LOWER AUTHORITIES AND BEFORE THIS TRIBUNAL ESTABLISHES TH AT THE ASSESSEE WAS CULTIVATING PADDY, COCONUT, TEAK, ETC. ON THE S UBJECT LAND. THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN SAY ING THAT THE ASSESSEE COULD NOT ESTABLISH THE FACT OF CULTIVATIO N. THE FACT OF CULTIVATION IS ESTABLISHED BY THE ASSESSEE. BOTH T HE AUTHORITIES BELOW DISPUTE THE SALE OF AGRICULTURAL PRODUCE. SI NCE THE ASSESSEE 4 I.T.A. NO.2451/CHNY/18 COULD NOT PRODUCE BILLS AND VOUCHERS FOR SALE OF AG RICULTURAL PRODUCE AND EXPENSES, THE CLAIM OF THE ASSESSEE WAS DISBELI EVED. 5. THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS ) HAVE TO APPRECIATE THE FACT THAT THE AGRICULTURAL PRODUCTS IN THIS COUNTRY ARE TRADED IN UNORGANIZED SECTOR. THE WORKFORCE IN THE AGRICULTURAL SECTOR IS UNORGANIZED. WHEN THE AGRICULTURAL PRODU CTS ARE TRADED IN UNORGANIZED SECTOR IN THE COUNTRY, EXPECTING THE AS SESSEE TO PRODUCE BILLS FOR SALE OF AGRICULTURAL PRODUCE IS S OMETHING WHICH CANNOT BE PRODUCED BY THE ASSESSEE. MOREOVER, WHEN THE ASSESSEE ENGAGES LABOURERS IN CARRYING OUT AGRICULT URAL OPERATION AND INCUR EXPENDITURE, PRODUCING VOUCHERS IS SOMETH ING UNCALLED FOR. WHAT IS TO BE SEEN IS THAT WHETHER THE ASSESS EE HAS CULTIVATED THE LAND AS CLAIMED. WHEN THE ASSESSEE CLAIMS THAT THE LAND WAS CULTIVATED WITH CERTAIN CROPS AND WHEN THE ASSESSIN G OFFICER HAS TAKEN UP THE ASSESSMENT FOR EXAMINATION AFTER THREE OR FOUR YEARS FROM THE RELEVANT FINANCIAL YEAR, NO MATERIAL EVIDE NCE WILL BE AVAILABLE ON THE LAND TO SHOW THAT THE ASSESSEE HAS CULTIVATED AS CLAIMED. THE ONLY EVIDENCE AVAILABLE IS THE RECORD MAINTAINED BY THE STATE GOVERNMENT IN ITS REVENUE DEPARTMENT. AS PER THE REVENUE BOARDS STANDING ORDERS OF GOVERNMENT OF TA MIL NADU, THE 5 I.T.A. NO.2451/CHNY/18 VILLAGE ADMINISTRATIVE OFFICER IN HIS OFFICIAL DUTY HAS TO GO ROUND THE VILLAGE AND TAKE STOCK OF THE CULTIVATION MADE AT T HE RELEVANT FIELD AND IT HAS TO BE RECORDED IN VILLAGE ACCOUNT NO.2. THE VILLAGE ACCOUNT NO.2 IS OTHERWISE KNOWN AS ADANGAL. THEREF ORE, THE ONLY OFFICIAL DOCUMENT MAINTAINED IN THE COURSE OF ADMIN ISTRATION IS THE ADANGAL EXTRACT MAINTAINED BY THE VILLAGE ADMINISTR ATIVE OFFICER. BEYOND THIS, THE ASSESSEE CANNOT PRODUCE ANY EVIDEN CE FOR ESTABLISHING THE CULTIVATION. 6. MOREOVER, FOR YIELD, THERE CANNOT BE ANY OTHER E VIDENCE OTHER THAN ESTIMATION. A COCONUT TREE MAY YIELD 100-120 NUTS IN A YEAR. NOW THE AGRICULTURE DEPARTMENT AND AGRICULTURE UNIV ERSITY INVENTED HYBRID COCONUT VARIETIES WHICH GIVE 150-200 NUTS IN A YEAR. THEREFORE, ESTIMATION OF YIELD IN AGRICULTURE IS SO METHING DIFFICULT AND WHICH NEEDS TO BE APPRECIATED BY THE AUTHORITIES WH O ARE PERFORMING JUDICIAL FUNCTION. WHEN AGRICULTURAL PR ODUCE INCLUDING COCONUTS IS TRADED IN UNORGANIZED MARKET LIKE UZHAV AR SANDHAI AND OTHER LOCAL MARKET, EXPECTING THE ASSESSEE TO PRODU CE BILLS AND VOUCHERS IS NOTHING BUT ASKING THE ASSESSEE TO PERF ORM AN IMPOSSIBLE TASK. THEREFORE, THIS TRIBUNAL FINDS NO REASON TO DISALLOW ANY CLAIM OF THE ASSESSEE. HAD THE ASSESSING OFFIC ER FOUND THAT 6 I.T.A. NO.2451/CHNY/18 THE ASSESSEE HAS NO LAND OR HE HAS NOT CULTIVATED A S CLAIMED, THE MATTER MIGHT HAVE STOOD IN A DIFFERENT FOOT. IN TH IS CASE, THE ASSESSING OFFICER ACCEPTED THE FACT THAT THE ASSESS EE HAS CULTIVATED THE LAND. THE ONLY REASON FOR DISALLOWANCE IS THAT THE ASSESSEE COULD NOT PRODUCE BILLS AND VOUCHERS FOR SALE OF AG RICULTURAL PRODUCE AND RECEIPTS FOR EXPENSES. APART FROM THAT, THE AS SESSEE HAS ESTABLISHED BY PRODUCING COPY OF ADANGAL EXTRACT TH AT THE LAND IN QUESTION WAS SUBJECT TO CULTIVATION. IN THOSE CIRC UMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO REASON TO DISALLOW ANY PART OF CLAIM. THEREFORE, THIS TRIBUN AL IS UNABLE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDING LY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSI NG OFFICER IS DIRECTED TO DELETE THE ADDITION OF 8,00,000/-. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22 ND JANUARY, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 22 ND JANUARY, 2019. 7 I.T.A. NO.2451/CHNY/18 KRI. / -278 98)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 :2 () /CIT(A)-14, CHENNAI-34 4. PRINCIPAL CIT-10, CHENNAI 5. 8; -2 /DR 6. <( = /GF.