SHRI BHIKHUBHAI C.RATHOD., SILVASSA. V. THE INCOME TAX OFFICER, VAPI.

ITA 2497/AHD/2003

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8920 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 16-02-2010
• Assessment Year: 1997-1998
• Appeal Filed On: 26-05-2003
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA SRDR
• Assessee Lawyers: MEHUL K PATEL; GOPAL KRISHNAN AIYER
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PAHUJA, ACCOUNTANT MEMBER ITA NO.2497 & 2775/AHD/2003 ASSESSMENT YEARS: 1997-98 & 1998-99 DATE OF HEARING:16.2.10 DRAFTED:16.2.10 SHRI BHIKHUBHAI C RATHOD, AT & POST.NAROLI, SILVASSA, U.T. OF DADRA & NAGARBAVELI PAN NO.ABTPR7430D V/S. INCOME TAX OFFICER, WARD-1, VAPI (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI MEHUL K PATEL & SHRI GOPAL KRISHNAN AIYER, AR REVENUE BY:- SHRI C.K. MISHRA, SR-DR O R D E R PER BENCH:- THESE TWO APPEALS BY THE ASSESSEE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-II & I, SURAT I N APPEAL NO.CAS(II)/99/01-02 & CAS/VLS/106/02.03 DATED 10-03-2003 AND 24-03-2003. THE ASSESSMENTS WERE FRAMED BY THE DCIT, CIRCLE-1, VAPI AND ITO, VAPI W ARD-3, VAPI U/S.143(3) R.W.S. 147 R.W.S. 144A OF THE INCOME-TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS THE ACT) VIDE THEIR ORDER DATED 27-03-2001 AND 22-03-2002 FOR THE ASSESSMENT YEAR 1997-98 AND 1998-99. 2. THE FIRST COMMON ISSUE IN BOTH THE APPEAL OF THE ASSESSEE IS AS REGARDS TO ESTIMATION OF AGRICULTURAL INCOME AND CONFIRMATION BY CIT(A). FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND:- ITA NO.2429/AHD/2003 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS-II) OUGHT NOT T O HAVE CONFIRMED THE ITA NO.2497 & 2775/AHD/2003 A.YS.97-98 & 98-99 BHIKUBHAI C RATHOD V. ITO WD-1 VAPI PAGE 2 ACTION OF THE LEARNED ASSESSING OFFICER, TREATING T HE AGRICULTURAL INCOME TO THE TUNE OF RS.2,45,617/- AS INCOME FROM OTHER SOURCES U/S.56 OF THE INCOME TAX ACT. THE ACTION OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS-II) IS CONTRARY TO THE FACTS OF THE CASE AND DESERVES TO B E DELETED. ITA NO.2775/AHD/2003 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS-I) OUGHT NOT TO HAVE CONFIRMED THE ACTION OF THE LEARNED ASSESSING OFFICER, TREATING T HE TOTAL RECEIPTS FROM AGRICULTURAL BY THE APPELLANT TO THE TUNE OF RS.3,8 7,536/- AS INCOME FROM OTHER SOURCES U/S.56 OF THE INCOME TAX ACT. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS-I) IS CONTRARY TO THE FACTS OF THE CASE AND DESERVES TO BE DELETED. 3. THE BRIEF FACTS LEADING TO THE ABOVE COMMON ISSU E ARE THAT THE ASSESSEE CLAIMED AGRICULTURAL INCOME AT RS.2,45,617/- IN ASS ESSMENT YEAR 1997-98 AND RS.3,87,536/- IN ASSESSMENT YEAR 1998-99. THE ASSE SSING OFFICER TREATED THE ENTIRE AGRICULTURAL RECEIPT DECLARED BY THE ASSESSEE AS IN COME FROM OTHER SOURCES AS THE ASSESSEE HAS NOT GIVEN ANY DETAILS OF HIS LAND SUCH AS DETAILS OF LAND HOLDING, RENT AGREEMENT, PAYMENT OF ELECTRICITY, WATER, IRRIGATIO N, LAND REVENUE DEPOSITS, THE DESCRIPTION AND LOCATION OF THE LAND ETC. ETC., EV EN THE ASSESSEE FILED ONLY X-EROX COPIES OF BILLS OF AGRICULTURAL PRODUCE I.E. SALE O F FRUIT AND VEGETABLE BUT NO DETAILS OF SEEDS, FERTILIZERS, IRRIGATION ACTIVITIES WERE FILE D. ACCORDINGLY, ASSESSING OFFICER IN BOTH THE YEARS TREATED THE ENTIRE RECEIPTS AS INCOM E FROM OTHER SOURCES. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE C IT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AND THE RELEVANT FINDING OF C IT(A) PARA-4 WHICH READS AS UNDER:- 4. I HAVE CONSIDERED THE SUBMISSIONS MADE ON BEHAL F OF THE APPELLANT AND ALSO THE SUBMISSION OF THE A.O. IT IS A FACT THAT T HE APPELLANT DID NOT HAVE AGRICULTURAL LAND OF HIS OWN. TE PROOF OF AGRICULTU RAL OPERATION AND POSSESSION OF THE LAND ON RENT WAS NOT PROVED BEFORE THE A.O A ND THE AGREEMENT WITH THE ALLEGED LAND OWNER HAS BEEN PRODUCED BEFORE ME IN S TAMP PAPER OF RS.10/-. THIS XEROX COPY OR ORIGINAL SHOULD HAVE BEEN FURNIS HED BEFORE THE A.O ONCE HE WAS CALLED UPON TO EXPLAIN THE AGRICULTURAL INCO ME. THE APPELLANT FAILED TO PRODUCE THESE EVIDENCES BEFORE THE A.O. FROM THE SU BSEQUENT CONDUCT OF THE APPELLANT REGARDING PURCHASE OF AGRICULTURAL LAND A ND ITS IMMEDIATE SALE SUGGESTS THAT HE IS NOT AN AGRICULTURIST. IT CANNOT BE BELIEVED THAT AN AGRICULTU9RIST WILL GIVE HIS LAND ON RENT OF RS.180 00 ONLY SO THAT THE APPELLANT COULD MAKE AGRICULTURAL INCOME OF RS.2,45,617/-. TH E CONTENTION OF THE APPELLANT DOES NOT APPEAR TO BE GENUINE, THEREFORE, ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE A.O HAS CORRECTLY ASSESSED THE ALLEGED AGRICULTURAL INCOME AS INCOME FROM OTHER SO URCES. THE ADDITION OF RS.2,45,617 IS, THEREFORE, CONFIRMED. ITA NO.2497 & 2775/AHD/2003 A.YS.97-98 & 98-99 BHIKUBHAI C RATHOD V. ITO WD-1 VAPI PAGE 3 4. BEFORE US LD. COUNSEL FOR THE ASSESSEE STATED TH AT EXACTLY ON THE SAME SUBMISSION IN THE ASSESSMENT YEAR 1996-97 AND IN AS SESSMENT YEAR 1995-96 THE ASSESSING OFFICER ACCEPTED THE SAME LAND AND ALSO A CCEPTED THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AT RS.2,62,318/-. HE STATE D THAT FOR THE ASSESSMENT YEAR 1996-97 ASSESSMENT WAS U/S.143(3) OF THE ACT WAS FR AMED AT THE SAME AGRICULTURAL INCOME WAS THE SUBJECT-MATTER AS IN THESE TWO ASSES SMENT YEARS, I.E. 1997-98 AND 1998-99. THE AO IN THE YEAR 1996-97 HAS NOTED AS UN DER:- THE ASSESSEE HAS DURING THE YEAR UNDER CONSIDERATI ON EARNED INCOME FROM CARTING AND BROKERAGE AS WELL AS FROM AGRICULTURAL ACTIVITIES. THE NET PROFIT OF THE ASSESSEE FROM BUSINESS ACTIVITY IS SHOWN AT RS. 65,658/- AND THAT FROM AGRICULTURAL ACTIVITY IS SHOWN IS AT RS.2,62,318/- WE FIND THAT THE AGRICULTURAL INCOME IN EARLIER YEA R HAS BEEN ACCEPTED AT RS.2,62,318/- AND IT CAN BE SAID THAT IN ASSESSMENT YEAR 1998-99, THE ASSESSEES AGRICULTURAL INCOME AT RS.3,85,536/- IS EXCESSIVE A ND A REASONABLE DISALLOWANCE IN THIS YEAR CAN BE MADE AT RS.1 LAKH. AS REGARDS TO A SSESSMENT YEAR 1997-98, THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME AT RS.2,4 5,617/- WHICH IS QUITE REASONABLE. ACCORDINGLY, THIS COMMON ISSUE OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 1997-98 IS ACCEPTED AND THAT OF ASS ESSMENT YEAR 1998-99 A REASONABLE DISALLOWANCE OF RS.1 LAKH IS DIRECTED TO BE MADE. 5. THE NEXT ISSUE IN ASSESSMENT YEAR 1997-98 IN THI S APPEAL OF ASSESSEE IS AS REGARDS TO ADDITION OF RS.4.50 LAKHS IN RESPECT OF UNEXPLAINED CASH CREDITS ADDED BY THE ASSESSING OFFICER U/S.68 OF THE ACT. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE FILE D THE EVIDENCE REGARDING THE CASH CREDIT AND HE REFERRED TO ASSESSEES BANK ACCO UNT MAINTAINED IN DENA BANK, WHEREBY CHEQUES NO.797 WAS ISSUED FOR MAKING A DEPO SIT OF ABOVE AMOUNT OF RS.4.50 LAKHS BY SHRI J.G. SOLANKI, WHO HAS GIVEN T HIS LOAN OF RS. 4.50 LAKHS. WE HAVE SEEN THE PASS BOOK AND FOUND THAT THERE ARE AM PLE DEPOSITS AVAILABLE IN EARLIER MONTHS, I.E. PRIOR TO SEPTEMBER96 AND THIS CHEQUES WAS ADVANCED IN NOV96. FROM THE RUNNING ACCOUNT, IT CAN EASILY BE ASCERTAINED T HAT THERE ARE AMPLE DEPOSITS IN THIS ACCOUNT, WHICH CAN BE ATTRIBUTED THAT THE ASSESSEE HAS NOT GIVEN THIS AMOUNT TO THE ITA NO.2497 & 2775/AHD/2003 A.YS.97-98 & 98-99 BHIKUBHAI C RATHOD V. ITO WD-1 VAPI PAGE 4 CASH CREDITOR, SHRI J.G. SOLANKI. EVEN, WE FIND THA T BANK ACCOUNT WAS BEFORE THE ASSESSING OFFICER AT THE TIME OF REMAND REPORT AND THIS CAN BE VERIFIED FROM THE REMAND REPORT AND THE RELEVANT PARA IN THE CASE OF ASSESSEE READS AS UNDER:- SHRI J.G. SOLANKI DURING THE COURSE OF ASSESSMEN T PROCEEDINGS ON VERIFICATION OF THE BALANCE-SHEET IT REVEALED THAT THE ASSESSEE HAS SOWN LIABILITY IN THE NAME OF SHRI J.G. SOLANKI RS.4,5 0,000/-. THE ASSESSEE HAS FAILED CONFIRMATION LETTER ALONG WITH THE COPY OF D ENA BANK ACCOUNT. IN VIEW OF THESE FACTS, WE ARE OF THE CONSIDERED VI EW THAT THE LOWER AUTHORITIES HAVE ERRED IN MAKING AND CONFIRMING THIS ADDITION AND WE DELETE THE SAME. THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. 7. THE NEXT GROUND NO.5, 6 AND 7 IN ASSESSMENT YEAR 1997-98 IN THIS APPEAL OF ASSESSEE ARE NOT PRESSED. ACCORDINGLY, THESE ARE D ISMISSED AS NOT PRESSED. 8. IN THE RESULT, ASSESSEES APPEALS ARE PARTLY ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON 22/02/2010 SD/- SD/- (A.N.PAHUJA) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 22/02/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-II & I SURAT 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD