Sangappa K. Hanumasagar, Laxmeshwar 582116 V. ITO, Hubli

ITA 25/BANG/2014

• Counselvise Citation: 2521114 RSA 2014
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 19-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR K SHANKAR PRA SAD
• Assessee Lawyers: K Y NINGOJI RAO
• Section: 143(3); 234B; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE , ACCOUNTANT MEMBER ITA NO S . 2 5 & 26 / BANG/20 1 4 (ASSESSMENT YEAR S : 2008 - 09 & 20 09 - 10 ) SHRI SANGAPPA K.HANUMASAGAR, PRO P. M/S.SIDDALINGESHWAR TRADING FIRM, NEAR OLD BUS STAND ROAD, APMC YARD, LAXMESHWAR - 582116. APPELLANT PAN:AAVPH5038G VS. INCOME - TAX OFFICER, WARD 1(2), HUBLI. RESPONDENT APPELLANT BY: SHRI K.Y.NINGOJI RAO, CA. RESPONDE NT BY: SHRI DR.K.SHANKAR PRASAD, CIT(DR) . DATE OF HEARING : 19 /01/2015. DATE OF PRONOUNCEMENT: 23 / 0 1 / 2015 . O R D E R PER SMT. P.MADHAVI DEVI, JM : THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), HUBLI, DATED 31/10/201 3 FOR ASSESSMENT YEAR 2008 - 09. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN RESTRICTING THE PROCESS LOSS OF GROUNDNUTS AT 24% AS AGAINST THE ASSESSEE S CLAIM OF 30.9% AND ALSO LEVY OF INTEREST U/S 234A ITA NO S . 25 & 26 /BANG/201 4 SHR I SANGAPA K.HANUMASAGAR PAGE 2 OF 5 AND 234B OF THE INCOME - TAX ACT, 1961[HEREI NAFTER REFERRED TO AS 'THE ACT']. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF TRADING IN GROUNDNUTS, MOONG DAL AND SUNFLOWER ETC., HAD FILED HIS RETURN OF INCOME ON 29/09/2008 FOR ASSESSMENT YEAR 2008 - 09 DECLARING A TOTAL INCOME OF RS.1,43,300/ - . DURING THE ASSESSMENT PROCEEDINGS U / S 143(3) OF THE ACT, THE ASSESSING OFFICER (AO) OBSERVED THAT THERE WAS A DIFFERENCE IN THE WEIGHTAGE OF GROUNDNUTS AND THAT THE ASSESSEE HAD CLAIMED SHORTAGE OF 1284. 70 QUINTALS ON ACCOUNT OF SHORTAGE DUE TO MOISTURE, DIRT AND DRYING OF SEEDS FROM THE DATE OF PURCHASE OF GROUNDNUTS TO THE SALE OF GROUNDNUT SEEDS. THE ASSESSEE HAS CLAIMED THE SHORTAGE PERCENTAGE TO BE 30.9% WHEREAS THE AO RESTRICTED IT TO 20% ON ACCOUNT OF ENQUIRIES MADE IN THE APMC YARD. HE, ACCORDINGLY DISALLOWED 10.9% WHICH WORKS TO 435.15 QUINTALS AT THE AVERAGE RATE OF RS.2,363/ - PER QUINTAL AMOUNTING TO RS.10,70,793/ - AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE AND BROUGHT IT TO TAX FOR THE A SSESSMENT YEAR 2008 - 09 . SIMILAR DISALLOWANCE WAS MADE IN ASSESSMENT YEAR 2009 - 10 ALSO. 3. AGGRIEVED, THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A) ALONG WITH A CERTIFICATE ISSUED BY THE SECRETARY OF THE AGRICULTURAL PRODUCE MARKET COMMITTEE (APM C), LA X MESHWAR, DATED 15/12/2011 WHEREIN IT WAS MENTIONED THAT THE SHORTAGE OF GROUNDNUT - SEED IS MORE THAN 30% O F THE GROUNDNUTS PURCHASED ITA NO S . 25 & 26 /BANG/201 4 SHR I SANGAPA K.HANUMASAGAR PAGE 3 OF 5 FROM THE AGRICULTURISTS. THE CIT(A), FURTHER OBSERVED THAT THE ASSESSEE, IN THE WRITTEN SUBMISSIONS, HAS GIVEN THE P ERCENTAGE OF SHORTAGE FOR THE ASSESSMENT YEARS 2004 - 05 TO 2009 - 10 THE AVERAGE OF WHICH WAS AROUND 23%. THEREFORE, HE HELD THAT IT WOULD BE APPROPRIATE AND REASONABLE TO ADOPT SHORTAGE OF GROUNDNUTS AT 24%. 4. AGGRIEVED, THE ASSESSEE IS IN APP EAL BEFORE US. EXCEPT FOR THE QUANTUM, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 10 ARE ALSO THE SAME. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORITIES BEL OW WHILE THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THERE IS NO DISPUTE THAT THERE IS BOUND TO BE LOSS OF WEIGHTAGE FR OM THE DATE OF PURCHASE TO THE DATE OF SALE DUE TO LOSS OF MOISTURE AND DIRT ATTACHED TO THE PODS . THE AO HAD REFERRED TO ORAL ENQUIRIES MADE BY HIM WITH APMC TO HOLD THAT THE AVERAGE SHORTAGE IS ABOUT 20%. THE ASSESSEE HAS FILED A CERTIFICATE OF THE SEC RETARY, APMC BEFORE THE CIT(A) WHEREIN IT IS MENTIONED THAT THE AVERAGE SHORTAGE WOULD BE 30%. WE FIND THAT THE CIT(A) HAS RELIED UPON THE PERCENTAGE OF SHORTAGE RETURNED BY THE ASSESSEE FOR THE EARLIER ASSESSMENT YEARS TO COME TO THE CONCLUSION THAT 24% IS REASONABLE. THE ITA NO S . 25 & 26 /BANG/201 4 SHR I SANGAPA K.HANUMASAGAR PAGE 4 OF 5 CIT(A) HAS ALSO NOT CONSIDERED THE CERTIFICATE FILED BY THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS SOLD PART OF THE GROUNDNUTS AS GROUNDNUTS ONLY WHILE THE BALANCE WAS DE - HUSKED AND SOLD AS GROUNDNUT SEEDS. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE CERTIFICATE GIVEN BY THE SECRETARY, APMC IS THAT THE SHORTAGE OF 30% IS DUE TO LOSS OF MOISTURE, DIRT, STONES AND ALSO HUSK FROM THE GROUNDNUT S SUPPLIED BY THE AGRICULTURISTS. THEREFORE, THE SHORTAG E OF 30% IS AFTER THE DE - HUSKING OF GROUNDNUTS TO GROUNDNUT SEEDS. IT IS THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE HAS SOLD PART OF THE GROUNDNUTS AS GROUNDNUT S AND THE BALANCE AS GROUNDNUT SEEDS. THEREFORE, AS PER THE CERTIFICATE OF THE SECRETARY , APMC, THE SHORTAGE ON ACCOUNT OF WASTAGE OF GROUNDNUT AFTER DE - HUSKING SHOULD BE 30%. THEREFORE, WE DIRECT THE AO TO ALLOW 24% AS THE SHORTAGE ON ACCOUNT OF GROUNDNUTS SOLD AS GROUNDNUTS AND TO ADOPT 30% SHORTAGE ON ACCOUNT OF GROUNDNUT WHICH ARE DE - HUS KED AND SOLD AS GROUNDNUT SEEDS. THE ASSESSEE GETS RELIEF ACCORDINGLY. 7. IN THE RESULT, THE ASSESSEE S APPEALS ARE TREATED AS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 23 RD JANUARY , 201 5 . SD/ - SD/ - ( ABRAHAM P GEORGE ) ( SMT. P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER EKSRINIVASULU ITA NO S . 25 & 26 /BANG/201 4 SHR I SANGAPA K.HANUMASAGAR PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE