Shardaben Virjibhai Godhani, Surat V. The Income Tax Officer, Ward-8(4), Now Ward-3(2)(4), Surat

ITA 2759/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2006 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P M JAGASHETH
• Keywords: Unexplained cash credit
• Section: 131; 68; 271(1)(c)

Judgement Text

SHARDABEN V. GODHANI V. ITO 8(4) SURAT/I.T.A. NO.2550 /AHD/2013 & 2759/AHD/2015/A.Y.10-11 PAGE 1 OF 7 , , INCOM TAX APPELLATE TRIBUNAL-SURAT-BENCH-SURAT . . , . . , BEFORE C .M. GARG, JUDICIAL MEMBER AND O. P. MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO. 2550/AHD/2013 & 2759/AHD/2015 /ASSESSMENT YEAR:2010-11 SMT. SHARDABEN V. GODHANI 65-66, KANTARESHWAR SOCIETY , NEAR BALASHRAM, KATARGAM ROAD SURAT 395004 PAN:ABAPG3868P V. INCOME TAX OFFICER, WARD- 8(4) SURAT APPELLANT /RESPONDENT ASSESSEE BY SHRI P. M. JAGASHETH, CA REVENUE BY SHRI DILIP KUMAR, SR. D.R. DATE OF HEARING 10.10.2018 DATE OF PRONOUNCEMENT 29 .10.2018 /ORDER PER O. P. MEENA, AM 1. THESE TWO APPEALS AT THE INSTANCE OF THE ASSESSEE ARE DIRECTED AGAINST AN ORDER DATED 13.09.2013 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-V., SURAT (IN SHORT THE CIT (A)) IN RESPECT OF QUANTUM APPEAL FOR THE ASSESSMENT YEAR 2010-11 AND ORDER OF CIT (A)-3 SURAT DTD. 26.08.2015 IN RESPECT OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 2010-11. SHARDABEN V. GODHANI V. ITO 8(4) SURAT/I.T.A. NO.2550 /AHD/2013 & 2759/AHD/2015/A.Y.10-11 PAGE 2 OF 7 QUANTUM APPEAL IN I.T.A.NO. 2550/AHD/2013/A.Y.10-11 2. GROUND NO. 1&2 ARE AGAINST THE CONFIRMATION OF ACTION OF THE AO IN MAKING ADDITION OF RS. 7,37,333 ON ACCOUNT OF SALES OF SUGARCANE AS INCOME FROM UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 3. SUCCINCTLY, FACTS ARE THAT THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS.9,17,170 FOR RATE PURPOSE ONLY IN THE RETURN OF INCOME. ON BEING EXPLAINED, THE ASSESSEE HAS FILED COPIES OF BILLS OF AGRICULTURE RECEIPTS, I.E. SALES OF SUGARCANE COTTON AND JIRU CROPS. THE AO HAS EXAMINED SHRI MAHENDRABHAI DALPATBHAI PATEL UNDER SECTION 131 OF THE ACT, TO WHOM AGRICULTURAL PRODUCE WERE CLAIMED TO HAVE BEEN SOLD. HOWEVER, IN HIS STATEMENT, SHRI MAHENDRABHAI DALPATBHAI PATEL HAS DENIED TO EVER INVOLVE IN TRANSACTION WITH THE ASSESSEE. THEREFORE, SHRI KRUNALBHAI BHARATBHAI LAD, THROUGH WHOM THE AGRICULTURAL PRODUCED WERE CLAIMED TO HAVE BEEN SOLD TO SHRI MAHENDRABHAI DALPATBHAI PATEL WAS ASKED TO BE PRODUCED, BUT THE ASSESSEE HAS FAILED TO PRODUCE HIM ON THE GIVEN DATE. ACCORDINGLY, THE AO MADE AN ADDITION OF RS.8,37,333 AFTER ACCEPTING AGRICULTURAL INCOME OF RS. 79,837 FROM RS. 9,17,170, AS CREDITED IN THE BOOKS OF ACCOUNTS IN THE FORM OF SALES PROCEEDS OF SUGARCANE AS INCOME FROM UNEXPLAINED SOURCES UNDER SECTION 68 OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). IT WAS SUBMITTED THAT THE ASSESSEE IS CO-OWNER OF 9.80 HECTARES OF AGRICULTURAL LAND AS PER COPY OF 7/12 AND 8A SUBMITTED. THE REVENUE RECORDS ALSO SHOWS SHARDABEN V. GODHANI V. ITO 8(4) SURAT/I.T.A. NO.2550 /AHD/2013 & 2759/AHD/2015/A.Y.10-11 PAGE 3 OF 7 THAT THE LAND IS USED FOR AGRICULTURAL PURPOSE HAVING IRRIGATION FACILITY ON WHICH AGRICULTURAL PRODUCE SUCH AS COTTON; SUGARCANE, GROUNDNUT ETC. ARE PRODUCED. THEREFORE, IN VIEW OF SUCH FACTS, THE CIT (A) OBSERVED THAT THAT SOME AGRICULTURAL INCOME IS EARNED BY THE APPELLANT FROM THE AGRICULTURE LAND. SINCE THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE HER CLAIM OF THE AGRICULTURAL INCOME COMPLETELY, BUT KEEPING IN FACT THAT SHE IS THE OWNER OF 9.80 HECTARES OF AGRICULTURAL LAND, IT IS LIKELY THAT SHE IS EARNING SOME AGRICULTURAL INCOME AS CO- OWNER. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE LD. CIT (A) HAS CONSIDERED AN AMOUNT OF RS.1, 00,000 AS A REASONABLE AMOUNT OF AGRICULTURAL INCOME IN ADDITION TO BE 79,837 ALREADY ACCEPTED AS AGRICULTURAL INCOME. HENCE, THE ADDITION MADE BY THE AO OF RS. 7,37,333 WAS UPHELD AND RELIEF OF RS. 1 LAKH ON ACCOUNT OF AGRICULTURAL INCOME WAS ALLOWED. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT (A) HAS ACCEPTED THAT THE ASSESSEE HAS OWNED 9.80 HECTARES AGRICULTURAL LAND AS CO-OWNER. THE LEARNED COUNSEL FOR THE ASSESSEE FILED A CHART SHOWING THE TREND OF YIELD OF SUGARCANE @ 637.50 PER HECTARES DURING PERIOD 1990-91 TO 2011-12 IN INDIA. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FILED A REPORT FOR DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION, MINISTRY OF CONSUMER AFFAIRS, GOVT. OF INDIA, ACCORDING TO WHICH, PRICE OF SUGARCANE PAYABLE TO EACH SUGARCANE SEASON WAS AT RS. 129.84 ROUNDED OF RS. 130 PER QUINTAL. THEREFORE, IT WAS CONTENDED THAT SHARDABEN V. GODHANI V. ITO 8(4) SURAT/I.T.A. NO.2550 /AHD/2013 & 2759/AHD/2015/A.Y.10-11 PAGE 4 OF 7 THE ASSESSEE MIGHT HAVE EARNED INCOME FROM SUGARCANE AT RS. 8,12,175[ 637.50 X 9.80 HECTARES=8,12,175]. BESIDE THIS, THE ASSESSEE HAS ALSO EARNED INCOME FROM SALE OF COTTON AND GROUNDNUT ETC. IT WAS FURTHER, SUBMITTED THAT DURING THE COURSE OF REMAND PROCEEDING, THE AO EXAMINED SHRI KRUNALBHAI LAD, WHO HAS NOT DENIED THE SALE OF SUGARCANE PRODUCE, BUT COULD NOT EXPLAINED PROPERLY. THEREFORE, IT WAS CONTENDED THAT THE ASSESSEE HAS EARNED AGRICULTURAL INCOME, WHICH HAS BEEN CORRECTLY SHOWN BY THE ASSESSEE. HENCE, ADDITION SUSTAINED BY THE CIT (A) WAS REQUESTED TO BE DELETED. 6. ON THE OTHER HAND, THE LD. SR. DR HAS SUPPORTED THE ORDER OF CIT (A) AND CONTENDED THAT THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE AGRICULTURAL INCOME WITH CORROBORATING EVIDENCES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE AGRICULTURAL LAND HOLDING OF 9.80 HECTARES IS NOT IN DISPUTE. THE ASSESSEE HAS FILED COPIES OF BILLS OF AGRICULTURAL PRODUCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND COPY OF LEDGER ACCOUNT SHOWING SALE OF SUGARCANE AT RS. 8,37,33 AS GIVEN IN PARA 3 OF THE TABLE OF ASSESSMENT ORDER. THE ASSESSEE HAS ALSO PRODUCED SHRI MAHENDRABHAI PATEL AND SHRI KRUNALBHAI LAD FOR EXAMINATION THROUGH WHOM SALE OF SUGARCANE WAS EFFECTED. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A CHART-SHOWING YIELD @ 637.50 PER HECTARES DURING RELEVANT PERIOD AND RATE OF SALE @ 130 PER QUINTAL. ACCORDINGLY, THE ESTIMATE OF SUGARCANE SALE COMES TO RS. 8,12,175 [637.50 X SHARDABEN V. GODHANI V. ITO 8(4) SURAT/I.T.A. NO.2550 /AHD/2013 & 2759/AHD/2015/A.Y.10-11 PAGE 5 OF 7 9.80 HECTARES = 8,12,175]. BESIDE, THIS THE ASSESSEE HAS ALSO EARNED INCOME FROM SALE OF COTTON ETC., WHICH IS ALSO SUPPORTED BY 7/12 EXTRACT AND 8A. THEREFORE, CONSIDERING THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND TAKING A HOLISTIC VIEW, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE MIGHT HAVE EARNED THE GROSS AGRICULTURAL INCOME AT RS.8,12,175/-, THEREFORE, CONSIDERING THE EXPENDITURE @ 40% OF GROSS INCOME THE NET INCOME WOULD BE AT RS.4,87,305/- (RS.8,12,175/ - RS.3,24,870/- = RS.4,87,305/-). FURTHER, THE AO ACCEPTED RS.79,837/- AGRICULTURAL INCOME EARNED BY THE ASSESSEE AS REASONABLE. IN VIEW OF THESE FACTS, THE NET AGRICULTURAL INCOME IS CONSIDERED AT RS.5,67,142/- (RS.4,87,305/- + RS.79,837/-) AS AGAINST THE AGRICULTURAL INCOME CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AT RS.9,17,170/-, ACCORDINGLY, THE ADDITION ON ACCOUNT OF AGRICULTURAL INCOME IS RESTRICTED TO RS.4,87,305/- AND ACCORDINGLY THE ASSESSEE GETS RELIEF OF RS.4,29,865/-, THEREFORE, THIS GROUND IS PARTLY ALLOWED. I.T.A.NO. 2759/AHD/2015/A.Y. 10-11- PENALTY UNDER SECTION 271(1)(C). 8. GROUND NO. 1 RELATES TO CONFIRMING PENALTY OF RS. 2,01,021 UNDER SECTION 271(1)(C) OF THE ACT. 9. SINCE THE CIT(A) HAS TREATED THE ADDITION OF RS.7,37,333/- ON ACCOUNT OF SUGARCANE RECEIPTS, THEREFORE, THE AO LEVIED A PENALTY OF RS.2,01,021/- TREATING THE INCOME FROM UNEXPLAINED SOURCES. THE ASSESSEE HAS CARRIED THE MATTER BEFORE THE CIT(A) WHEREIN THE ASSESSEE HAS PLACED RELIANCE IN THE CASE SHARDABEN V. GODHANI V. ITO 8(4) SURAT/I.T.A. NO.2550 /AHD/2013 & 2759/AHD/2015/A.Y.10-11 PAGE 6 OF 7 OF RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) AND OTHERS AS MENTIONED IN PARA 6.4 OF THE APPELLATE ORDER. HOWEVER, THE COMMISSIONER OF INCOME-TAX (APPEAL) HAS CONFIRMED THE PENALTY LEVIED BY THE AO ON THE GROUND THAT THE ASSESSEES EXPLANATION WAS NOT FOUND THE SUBSTANTIATED IN TREATING THE AGRICULTURAL INCOME OF RS.7,37,333/-. 10. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE US. THE LD. COUNSEL CONTENDED THAT THE AO HAS INITIATED PENALTY FOR FILING INACCURATE PARTICULARS OF INCOME WHEREAS THE AO HAS LEVIED THE PENALTY FOR CONCEALMENT OF INCOME, THEREFORE, PENALTY IMPOSED IS INVALID IN THE LIGHT OF DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. MANU ENGG. WORKS [1980] 122 ITR 306 (GUJ) AND CIT VS. CIT VS. SAMSON PERINCHERY [2017] 392 ITR 4 (BOMBAY) /[2017] 88 TAXMANN.COM 413 (BOMBAY) AND MULTIVISION INFOTECH PVT. LTD. VS. ACIT [2017] 88 TAXMANN.COM 874 (AHMEDABAD TRIBUNAL). IT WAS FURTHER SUBMITTED THAT THE ADDITION SUSTAINED IS ON ESTIMATED BASIS AS NO POSITIVE CONCEALMENT OF INCOME HAS NOT BEEN BROUGHT ON RECORD, THEREFORE, PENALTY IS NOT LEVIABLE U/S.271(1)(C) OF THE ACT. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE GONE THROUGH THE CASE LAWS RELIED UPON THE LEARNED COUNSEL FOR THE ASSESSEE. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE THE AO HAS MADE ADDITION ON ACCOUNT OF AGRICULTURAL INCOME TREATING THE SAME AS UNEXPLAINED WHICH THE CIT (A) HAS FURTHER, REDUCED SHARDABEN V. GODHANI V. ITO 8(4) SURAT/I.T.A. NO.2550 /AHD/2013 & 2759/AHD/2015/A.Y.10-11 PAGE 7 OF 7 BY RS. 1 LAKH IN APPEAL. FURTHER, AS WE HAVE ALSO REDUCED THE QUANTUM ADDITION TO RS.4,87,305/-. IN SUCH SITUATION THE PENALTY IS ALSO REQUIRED TO BE RECALCULATED . THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES, THE AO IS DIRECTED TO CALCULATE PENALTY ON UNEXPLAINED INCOME AT RS. RS.4,87,305/- ONLY. THIS GROUNDS OF APPEAL IS THEREFORE, ALLOWED PARTLY ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR QUANTUM APPEAL IN I.T.A.NO. 2550/AHD/2013 AND PENALTY APPEAL IN I.T.A.NO. 2759/AHD/2015 IS ALSO PARTLY ALLOWED FOR THE ASSESSMENT YEAR 2010-11. 13. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.10.2018. SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) SURAT DATED: 29 OCTOBER 2018.OPM / COPY OF THE ORDER IS FORWARDED TO : 1. 2. 3. ( ), 4. PR. CIT 5. , , / 6. . BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT