Shri Anwarali Alladinbhai Andani, V. The Income tax Officer, Ward-2(3), Bhavnagar

ITA 2608/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0302 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-10-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 12-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NITA SHAH
• Keywords: Income from undisclosed sources; Opportunity of being heard; Principle of natural justice; Additional evidence

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGARWAL, A.M.) I.T.A. NO. 2608/AHD./2007 ASSESSMENT YEAR : 2003-2004 SHRI ANWARALI ALLADINBHAI ANDANI, BOTAD -VS.- I NCOME TAX OFFICER, WARD-2(3), BHAVNAGAR (P.A. NO. ABPPA 8583 Q) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI SURESH GA NDHI RESPONDENT BY : SMT. NITA SHAH O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 29.03.2007 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -XVIII, AHMEDABAD CONFIRMING THE ADDITION OF RS.5,50,972/- MADE BY TH E A.O. AS INCOME FROM UNDISCLOSED SOURCES AS AGAINST AGRICULTURE INCOME DECLARED BY THE ASSES SEE IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-2004. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN I NDIVIDUAL CARRYING ON THE BUSINESS OF CATTLE FOOD AT BOTAD, DIST. BHAVNAGAR FOR MORE THAN TWO DE CADES. HE HOLDS AGRICULTURE LAND SINCE AROUND 8 TO 10 YEARS. THE A.O. FRAMED THE ASSESSMEN T UNDER SECTION 143(3), WHEREIN HE TREATED THE AGRICULTURE INCOME OF RS.5,50,972/- DECLARED BY THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. ON APPEAL, IN THE IMPUGNED ORDER THE LEARN ED COMMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ACTION OF A.O. AGGRIEVED BY THIS ORDER O F LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING ON BEHALF OF THE ASSESSEE SHRI SURESH GANDHI APPEARED AND CONTENDED THAT GROSS AGRICULTURE INCOME WAS RS.6,84 ,882/- (NOT AT RS.7,90,333/- AS STATED BY THE A.O.). THE TOTAL EXPENDITURE FOR AGRICULTURE WAS OF RS.47,280/- AND THEREBY NET AGRICULTURE INCOME/RECEIPTS SHOWN BY THE ASSESSEE WAS RS.6,37,6 02/-. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN THIS AS AGRICULTURE INCOME AND ADDED THE SAME TO THE TOTAL INCOME FOR RATE PURPOSE AS REQUIRED UNDER THE INCOME TAX ACT. COPY OF AGRICULT URE INCOME ACCOUNT, SALES BILLS WERE FURNISHED BEFORE THE A.O. 2 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. PROPOSED TO TAKE EXPENDITURE ON AGRICULTURE RECEIPTS AT 30% AS BASE FOR DETERMINING AGRICULTURE RECEIPTS. HOWEVER, FINALLY AFTER CONSIDERING THE REPLY, THE A.O. TOOK 20% EXPENDITUR E AS BASE FOR EARNING AGRICULTURE INCOME/ RECEIPTS AND THEREBY WORKED OUT AGRICULTURE INCOME AT RS.1,33,910/-. THE DIFFERENCE AMOUNTING TO RS.5,50,972/- WAS TREATED AS INCOME FROM UNDISCL OSED SOURCES. THE LD. COUNSEL OF THE ASSESSEE FURTHER EXPLAINED THAT BEFORE THE LEARNED COMMISSIO NER OF INCOME TAX(APPEALS), THE ASSESSEE FILED DETAILED SUBMISSIONS. THE LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) REFERRED THE MATTER TO A.O. CALLED THE REMAND REPORT DATED 31.01 .2007. AFTER CONSIDERING THE REMAND REPORT, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HEL D THAT AGRICULTURE INCOME AS SHOWN BY THE ASSESSEE IS NOT POSSIBLE BASED ON HIS LAND HOLD ING. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FURTHER HELD THAT THE APPELLANT HAS FA ILED TO PROVE THE CLAIM OF AGRICULTURE INCOME. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT BOTH THE DEPARTMENTAL AUTHORITIES BELOW IGNORED THE BASIC FACT THAT THE ASSESSEE IS MAINTAINING AND DECLARING AGRICULTURE INCOME ON CASH BASIS. APART FROM THIS, BOTH THE DEPARTMENTAL AUTHORITIES BELOW COMPLETELY IGNORED THE GOODS PRODUCED IN QUANTITY, THE OPENING STOCK OF COTTON, JIRU AND SESAME, ETC., WHICH THE ASSESSEE IS HAVING AT THE BEGINNING OF THE YEAR RELEVANT TO THE ASSESSMENT YE AR UNDER APPEAL. THE OPENING STOCK OF THE VARIOUS COMMODITIES WAS ALSO SOLD IN THE PREVIOUS Y EAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. ALL THE SALE BILLS ARE AVAILABLE. IF ONE TA KES INTO CONSIDERATION THE OPENING STOCK OF THE VARIOUS GOODS, NO ADDITION IS CALLED FOR. 5. SMT. NITA SHAH, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. THE LD. D.R. POINTED OUT THAT NO QUANTITATIV E DETAILS WERE FURNISHED BEFORE ANY OF THE DEPARTMENTAL AUTHORITIES BELOW. THEREFORE, THESE QU ANTITATIVE DETAILS NOW FURNISHED CANNOT BE ADMITTED. ALTERNATIVELY, THE LD. D.R. POINTED OUT T HAT WHETHER OPENING STOCK WAS AVAILABLE LOOKING TO THE GOODS PRODUCED AND AGRICULTURE INCOM E SHOWN IN THE LAST TWO YEARS NEEDS VERIFICATION AT THE END OF A.O. HE ACCORDINGLY SUGG ESTED THAT THE ADDITION BE UPHELD. IN CASE, THE ADDITIONAL EVIDENCES NOW FURNISHED ARE ADMITTED, IN THAT EVENT, THE MATTER BE RESTORED TO THE FILE OF A.O., WHO WILL EXAMINE THE SAME WITH REFERENCE T O AGRICULTURE RECORD MAINTAINED BY THE ASSESSEE IN THE LAST TWO YEARS SO AS TO FIND OUT WH ETHER THE OPENING STOCK WAS AVAILABLE AT THE BEGINNING OF THE YEAR RELEVANT TO THE ASSESSMENT YE AR UNDER APPEAL. 3 6. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT BOTH THE DEPARTMENTAL AUTHORITIES BELOW COMPLETELY IGNORED THAT THE ASSES SEE IS MAINTAINING AGRICULTURE ACCOUNTS ON CASH/ RECEIPT BASIS. BEFORE THE LEARNED COMMISSIONE R OF INCOME TAX(APPEALS), THE ASSESSEE HAS FURNISHED THE FOLLOWING DOCUMENTS :- (I) EXTRACT OF 7/12 FROM THE LAND REVENUE RECORDS I N THE NAME OF THE APPELLANT AS A PROOF OF AGRICULTURE LAND HOLDING, (II) ABSTRACT OF FORM NO. 8-A FOR SAID LAND HOLDIN G, (III) COPIES OF ALL THE SALES BILLS OF AGRICULTURE PRODUCES WHICH HAVE BEEN SOLD THROUGH THE AGRICULTURAL PRODUCE MARKET COMMITTEE (APMC), BOTAD AND REGISTERED COMMISSION AGENTS WHO ARE WELL KNOWN PARTIES. (IV) COPIES OF BILLS/ VOUCHERS IN RESPECT OF EXPENS ES INCURRED FOR AGRICULTURE ACTIVITIES CARRIED OUT BY THE APPELLANT. (V) THE AGRICULTURE LAND IS HAVING THE FACILITY OF BORE WELL TO ENSURE THE AVAILABILITY OF WATER ROUND THE YEAR, (VI) IN PAST RETURNS, THE APPELLANT HAS SHOWN THE A GRICULTURE INCOME WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT. 7. BEFORE US, THE ASSESSEE HAS SUBMITTED THE QUANTI TATIVE DETAILS OF AGRICULTURE PRODUCES FOR LAST THREE YEARS, WHICH ARE AS UNDER :- [ QTY. IN KGS.] SL. NO. PARTICULARS F.Y.2000- 01/A.Y.2001-02 F.Y.2001- 02/A.Y.2002-03 F.Y.2002- 03/A.Y.2003-04 (A) COTTON (KAPAS) OPENING STOCK 5560.000 4200.000 0.000 ADD. PRODUCTION (APPROX.) 15128.000 8140.000 13099.000 TOTAL 20688.000 12340.000 13099.000 LESS : SOLD DURING THE YEAR 16488.000 12320.000 13099.000 CLOSING STOCK 4200.000 0.000 0.000 SL. NO. PARTICULARS F.Y.2000- 01/A.Y.2001-02 F.Y.2001- 02/A.Y.2002-03 F.Y.2002- 03/A.Y.2003-04 (B) CUMIN (JIRU) OPENING STOCK 0.000 350.000 700.000 4 ADD. PRODUCTION (APPROX.) 350.000 350.000 750.000 TOTAL 350.000 700.000 1450.000 LESS : SOLD DURING THE YEAR 0.000 0.000 1430.000 CLOSING STOCK 350.000 700.000 20.000 SL. NO. PARTICULARS F.Y.2000- 01/A.Y.2001-02 F.Y.2001- 02/A.Y.2002-03 F.Y.2002- 03/A.Y.2003-04 (C) SESAME (TAL/TIL) OPENING STOCK 0.000 4500.000 8500.000 ADD. PRODUCTION (APPROX.) 4500.000 4000.000 4500.000 TOTAL 4500.000 8500.000 13000.000 LESS : SOLD DURING THE YEAR 0.000 0.000 12551.000 CLOSING STOCK 4500.000 8500.000 449.000 8. IT APPEARS THAT AFORESAID DETAILS WERE NOT CALLE D BY ANY OF THE DEPARTMENTAL AUTHORITIES BELOW. ALL THE DETAILS REGARDING SALE OF AGRICULTUR E PRODUCES ARE ALSO AVAILABLE. BEFORE US, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE DETAILS OF AGRICULTURE PRODUCES IN LAST TWO YEARS AND SOLD DURING THE LAST TWO YEARS CAN ALSO BE PRODUCED BEFORE THE A.O. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, IN OUR OPINION, IT WILL MEET THE ENDS OF NATURAL JUSTICE IF THE MATTER IS SENT TO A.O. FOR FRESH EXAMINATION IN ACCORDANCE WITH LAW. THE ASSESSEE IS ALSO DIRECTED TO FURNISH QUANTITY-WISE DETAILS FOR LAST THREE YEARS TO THE A.O. SHOWING HOW THE OPENING TOCK WAS AVAILABLE FOR SALE IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE SHALL FURNISH THE COMPLETE RECORDS I.E. SALES MADE IN EARLIER YEARS, DETAILS OF EXPENSES INCURRED OR ANY OTHER DETAILS, WHICH MAY CALLED. THE A.O. MAY E XAMINE THE SAME AND RE-ADJUDICATE THE ADDITION OF RS.5,50,972/- AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE COURT ON 16.10.2009 SD/- SD/- (D.C. AGARWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 / 10 / 2009 5 COPY OF THE ORDER IS FORWARDED TO : 1) SHRI ANWARALI ALLADINBHAI ANDANI, CATTLE ROAD MERCH ANT, DINDAYAL ROAD, BOTAD- 364710, (2) ITO, WARD-2(3), BHAVNAGAR 3) CIT(A)- ,AHMEDABAD (4) CIT- ,AHMEDA BAD.(5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMED ABAD LAHA/SR.P.S.