K.C.Loganathan, Erode V. ITO Ward 2(2), Erode

ITA 2884/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2371 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 11-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALMALSAWMA PACHUAU
• Assessee Lawyers: S SRIDHAR
• Keywords: Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH, CHENNAI . . . , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ I.T.A.NO.2884/CHNY/2018 ( [ [ / ASSESSMENT YEAR: 2014-15) SHRI K.C. LOGANATHAN, 84, KAMARAJ NAGAR, M. PIDARIYUR, M.PIDAYUR POST, CHENNIMALAI POST, ERODE 638 051. VS THE INCOME TAX OFFICER, WARD -2(2), ERODE - 1 PAN: AFSPL7970B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI LALMALSAWMA PACHUAU, JCIT /DATE OF HEARING : 19.06.2019 /DATE OF PRONOUNCEMENT : 21.06.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, COIMBATORE DATED 13.08.2018 AND PERTAINS TO THE ASSESSMENT YEAR 2014-15. 2 I.T.A. NO. 2884/CHNY/2018 2. SHRI S. SRIDHAR, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS.9,98,000/- TOWARDS DEPOSIT IN THE BANK ACCOUNT. 3. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE ACCUMULATED AMOUNT FROM AGRICULTURE WAS DEPOSITED IN THE BANK ACCOUNT. HOWEVER THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE. ON APPEAL BY THE ASSESSEE, THE LD.CIT(A) FOUND THAT A SUM OF RS.5 LAKHS WAS FROM AGRICULTURE, BALANCE OF RS.4,48,000/- WAS TREATED AS INCOME FROM OTHER SOURCES. ACCORDINGLY THE LD.CIT(A) RESTRICTED THE ADDITION TO THE AMOUNT OF RS.4,48,000/-. REFERRING TO THE ORDER OF THE LD.CIT(A), MORE PARTICULARLY, PARA 7.2, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS CULTIVATING 10 ACRES OF LAND WHICH IS NOT IN DISPUTE. THE LD.CIT(A) ESTIMATED THE INCOME AT RS.50,000/- PER ACRE. FROM 10 ACRES, THE LD.CIT(A) ESTIMATED RS.5 LAKHS. HOWEVER THE ACCUMULATED INCOME FROM THE AGRICULTURE WAS NOT TAKEN INTO CONSIDERATION BY THE LD.CIT(A). ACCORDING TO THE LD. COUNSEL, IF THE ACCUMULATED INCOME IS TAKEN INTO CONSIDERATION, THERE CANNOT BE ANY ADDITION. 3 I.T.A. NO. 2884/CHNY/2018 4. ON THE CONTRARY, SHRI LALMALSAWMA PACHUAU, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS MADE CONTRADICTORY STATEMENT BEFORE THE ASSESSING OFFICER. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT HE WAS HAVING CLOTH BUSINESS FOR THE PAST SEVERAL YEARS AND THE ACCUMULATED PROFIT WAS USED FOR BANK DEPOSIT. SUBSEQUENTLY HE RETRACTED THE SAID STATEMENT AND MADE ANOTHER STATEMENT BEFORE THE ASSESSING OFFICER THAT THE AGRICULTURE INCOME WAS USED FOR BANK DEPOSIT. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER DISBELIEVED THE STATEMENT OF THE ASSESSEE AND MADE ADDITION OF RS.9,98,000/-. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE DEPOSIT WAS ACCUMULATED PROFIT FROM CLOTH BUSINESS. SUBSEQUENTLY, HE CHANGED HIS STAND AND CLAIMED THAT IT WAS INCOME FROM AGRICULTURE. THE LD.CIT(A) FOUND THAT THE ASSESSEE WAS CULTIVATING 10 ACRES OF LAND AND HE ESTIMATED INCOME AT RS.50,000/- PER ACRE AND RS.5 LAKHS FROM 10 ACRES. THIS FINDING OF THE LD.CIT(A) WAS NOT DISPUTED BY THE REVENUE. IN OTHER WORDS, THE CULTIVATION OF 10 ACRES OF LAND BY THE ASSESSEE AND EARNING NET INCOME OF RS.50,000/- PER ACRE IS NOT IN DISPUTE. THE ASSESSEE NOW CLAIMS BEFORE THE TRIBUNAL THAT THE ACCUMULATED PROFIT 4 I.T.A. NO. 2884/CHNY/2018 FROM AGRICULTURE WAS USED FOR DEPOSIT. WHEN THE ASSESSEE WAS EARNING RS.5 LAKHS PER ANNUM FROM CULTIVATION OF 10 ACRES OF LAND, THE ACCUMULATED PROFIT IN THE EARLIER YEAR ALSO NEEDS TO BE TAKEN INTO CONSIDERATION. IF WE TAKE INTO CONSIDERATION THE ACCUMULATED PROFIT FROM AGRICULTURE IN THE EARLIER YEARS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE WOULD HAVE DEPOSITED RS.4,48,000/- FROM SUCH ACCUMULATED INCOME. THEREFORE AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE ADDITION OF RS.4,48,000/- AS INCOME FROM OTHER SOURCES IS NOT JUSTIFIED. ACCORDINGLY THE ORDERS OF BOTH THE AUTHORITIES ARE SET ASIDE AND THE ENTIRE ADDITION OF RS.9,98,000/- IS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 21 ST JUNE, 2019 AT CHENNAI. SD/- SD/- ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, /DATED, THE 21 ST JUNE, 2019. RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. [ /GF