SARANG SHEPHERDS & FARMS, MUMBAI V. DCIT CENT. CIR. - 36, MUMBAI

ITA 2795/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1349 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.2795/MUM/2016 (ASSESSMENT YEAR 2010-11) M/S. SARANG SHEPHERDS & FARMS, 300, SHABNAM APARTMENT, 33, S.V.ROAD, ANDHERI(W), MUMBAI 400 058 PAN: AAYFS 4398D ...... APPELL ANT VS. THE DY.COMMISISONER OF INCOME TAX, CENTRAL CIRCLE -36, MUMBAI .... RESPONDENT APPELLANT BY : SHRI PIYUSH CHHAJED RESPONDENT BY : MS BEENA SANTOSH DATE OF HEARING : 05/12/2016 DATE OF PRONOUNCEMENT : 29/12/2016 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-53, MUMBAI DATED 29/01/2016, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT) DATED 22/02/2013. 2. THE ONLY ISSUE IN THIS APPEAL IS WITH RESPECT TO THE ACTION OF THE CIT(A) IN HOLDING THAT AN AMOUNT OF RS.6,97,428/- WAS TO BE A SSESSED AS UNEXPLAINED INCOME AS AGAINST THE CLAIM OF THE ASSESSEE THAT TH E SAME CONSTITUTED AGRICULTURAL INCOME. 2 ITA NO.2795/MUM/2016 (ASSESSMENT YEAR 2010-11) 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM AND THE ONLY SOURCE OF INCOME DECLARED IS FROM AGRICULT URE. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, IT FILED THE RETURN OF IN COME DECLARING NIL TAXABLE INCOME WHICH, INTER-ALIA, INCLUDED AN INCOME OF RS. 9,44,095/- FROM AGRICULTURE. IN TERMS OF THE TRADING, P&L ACCOUNT ANNEXED WITH T HE RETURN OF INCOME, ASSESSEE HAD DECLARED TOTAL AGRICULTURAL PROCEEDS O F RS.14,68,560/-, AGAINST WHICH EXPENSES OF RS.5,24,465/- WERE CLAIMED AND SURPLUS WAS RS.9,44,095/-. THE ASSESSING OFFICER TREATED THE ENTIRE RECEIPT OF RS.14,68,560/- AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND DETERMINED THE TOTAL INCOME AT RS.14,68,565/-. THE CIT(A) DISAGREED WIT H INVOKING OF THE PROVISIONS OF SECTION 68 OF THE ACT BY THE ASSESSING OFFICER, BUT AT THE SAME TIME DID NOT ACCEPT THE EXTENT OF AGRICULTURAL INCOME AS DECLAR ED BY THE ASSESSEE. THE CIT(A) ACCEPTED THE CORRECTNESS OF THE CLAIM OF AG RICULTURAL INCOME ONLY TO THE EXTENT OF RS.7,71,132/- AND ACCORDINGLY, RETAINED T HE BALANCE ADDITION OF RS.6,97,428/-. 4. AGAINST THE AFORESAID DECISION, THE LD. REPRESEN TATIVE FOR THE ASSESSEE POINTED OUT THAT THE CIT(A) HAS COMPLETELY MISDIREC TED HIMSELF IN REJECTING THE NET AGRICULTURAL INCOME OF RS.9,44,095/- DECLARED BY THE ASSESSEE. IT IS POINTED OUT THAT THE CIT(A) HAS NOT FOUND FAULT WITH THE EX PENSES CLAIMED BY THE ASSESSEE BY WAY OF DEBIT IN THE P&L ACCOUNT BUT HAS MERELY DIFFERED WITH THE EXTENT OF SALES DECLARED BY THE ASSESSEE. IT IS PO INTED OUT THAT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT, WHICH HAS NOT BEEN REJECTED. IT IS POINTED OUT THAT ASSESSEE FIRM OWNS APPROXIMATELY 2 6.53 ACRES OF AGRICULTURAL LAND ON WHICH THE ACTIVITY IS CARRIED OUT AND IN A SSESSMENT YEARS 2009-10 AND 2012-13, VIDE ORDERS PASSED UNDER SECTION 143(3) OF THE ACT , THE AGRICULTURAL 3 ITA NO.2795/MUM/2016 (ASSESSMENT YEAR 2010-11) INCOME AS DECLARED ON THE BASIS OF BOOKS OF ACCOUN T HAVE BEEN ACCEPTED, COPIES OF SUCH ORDERS HAVE BEEN PLACED AT PAGES 50 TO 52 AND 87 TO 88 OF THE PAPER BOOK RESPECTIVELY. IT IS THEREFORE, CONTENDE D THAT CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION. 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE C ASE OF THE REVENUE. 6. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S. THE FACTS OF THE INSTANT CASE CLEARLY POINT OUT THAT SO FAR AS THE EXISTENCE OF AGRICULTURAL INCOME IS CONCERNED, THERE IS NO DISPUTE. IT IS ALSO NOT IN DISPUTE THAT THE ONLY SOURCE OF INCOME OF THE ASSESSEE FIRM IS FROM AGRICULTURE. I T IS ALSO EMERGING THAT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT IN CONNE CTION WITH THE AGRICULTURAL ACTIVITY. THE AGRICULTURAL INCOME COMPUTED BY THE ASSESSEE HAS BEEN TINKERED BY THE LOWER AUTHORITIES MERELY ON ESTIMATE BASIS . THERE IS NO MATERIAL TO SUGGEST THAT THERE HAS BEEN ANY INFLATION OF INCOME BY THE ASSESSEE AND RATHER THE CLAIM OF THE ASSESSEE HAS BEEN REJECTED ON GUES S WORK ONLY. IT IS ALSO UNDISPUTED THAT AGRICULTURAL INCOME RETURNED BY THE ASSESSEE IN OTHER ASSESSMENT YEARS, NAMELY, 2009-10 AND 2012-13, IN SIMILAR MANNER HAS BEEN ACCEPTED BY THE DEPARTMENT, AS CAN BE SEEN FROM THE RESPECTIVE ORDERS PASSED UNDER SECTION 143(3) OF THE ACT, COPIES OF WHICH AR E ON RECORD. UNDER THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, THE ONUS W AS ON THE REVENUE TO ESTABLISH WITH REQUISITE MATERIAL AND EVIDENCE THA T THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IS INCORRECT. IN THE ABSE NCE OF ANY SUCH CREDIBLE EVIDENCE, APART FROM A SUMMARY REJECTION OF AGRICU LTURAL INCOME, THE ACTION OF 4 ITA NO.2795/MUM/2016 (ASSESSMENT YEAR 2010-11) THE LOWER AUTHORITIES IS UNACCEPTABLE AND THE ADDI TION IS HEREBY DIRECTED TO BE DELETED. 6.1 AS A CONSEQUENCE, THE ORDER OF THE CIT(A) IS SE T-ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ACCEPT THE INCOME AS DECLARE D BY THE ASSESSEE IN ITS RETURN OF INCOME. THUS, ASSESSEE SUCCEEDS ON THIS ASPECT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 29/12/2016 SD/- (G.S.PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 29/12/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI