Jyotiben A.Patel, Ahmedabad V. The Income tax Officer,Ward-6(2), Ahmedabad

ITA 2907/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94261 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 18-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 19-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VILAS SHINDE
• Assessee Lawyers: S N DIVATIA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ./ ITA NO. 2907/AHD/2010 AND ITA.NO.151/AHD/2011 / ASSESSMENT YEARS: 2006-07 & 2007-08 SMT. JYOTIBEN A. PATEL, 9, DEVANSH BUNGALOWS, NEAR SURDHARA CIRCLE, THALTEJ, AHMEDABAD. VS. INCOME TAX OFFICER, WARD 6(2), AHMEDABAD. PAN : AITPP 2738 B / (APPELLANT) / (RESPONDENT) BY APPELLANT : SHRI S.N. DIVATIA, A.R.. BY RESPONDENT : SHRI VILAS SHINDE, SR. D.R. / DATE OF HEARING : 18/08/2015 / DATE OF PRONOUNCEMENT: 20/08/2015 / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST TWO SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS)-XVI, AHMADABAD DATED 23-08-2010 AND DATED 06-12-2010 FOR ASSESSMENT YEARS 2006-07 AND 2007-08 RESPECTIVE LY. ITA NO.2907/AHD/2010 A.Y. 2006-07 2. THE ASSESSEE HAS RAISED SO MANY GROUNDS OF APPEA L, HOWEVER, THE ONLY SUBSTANTIVE GROUND WHICH WAS ARGUED AT THE TIME OF HEARING ITA NO2907/AHD/2010 & ITA.151/AHD/2011 JYOTIBEN A. PATEL VS. ITO WD.6|(2) FOR AYRS 2006-07 & 2007-08 2 BEFORE US IS GROUND NO. 3.1 AND 4.1. ALL OTHER GROU NDS ARE EITHER GENERAL IN NATURE OR THE ARGUMENTS IN SUPPORT OF AB OVE TWO GROUNDS. 3. GROUND NO.3.1 AND 4.1 READS AS UNDER:- 3.1. THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AN D OR ON FACTS IN HOLDING THAT NET AGRICULTURAL INCOME WAS RS.4,04,96 5/- AND BALANCE RS.12,60,921/- WAS INCOME FROM OTHER SOURCE S. 4.1. THE LD. CIT (A) OUGHT TO HAVE DELETED THE ADDI TION OF RS.1,65,867/- MADE BY A.O. IN RESPECT OF AGRICULTUR AL EXPENSES ESTIMATED @ 40% OF GROSS RECEIPTS. 4. THE FACTS OF THE CASE ARE THAT FOR THE YEAR UNDE R CONSIDERATION THE ASSESSEE DISCLOSED AGRICULTURAL INCOME OF RS.16,65, 888/-. THE ASSESSING OFFICER NOTICED THAT THE SALE OF SEEDS BY THE ASSESSEE TO AVANI SEEDS LTD., WAS WORTH RS.25,00,035/-. THE EXP ENDITURE CLAIMED BY THE ASSESSEE WAS RS.8,34,147/-.AS PER ASSESSING OFFICER THERE SHOULD HAVE ATLEAST 40% EXPENDITURE FOR THE AGRICUL TURAL ACTIVITY. HE THEREFORE, ESTIMATED THE AGRICULTURAL INCOME AT RS. 15,00,021/- I.E. 60% OF RS.25,00,035/-. CONSEQUENTLY, ASSESSING OFFICER MADE ADDITION OF RS.1,65,867/-. ON APPEAL, THE CIT (A) ESTIMATED THE QUANTITY OF THE CROP AS PER THE AVERAGE CROP IN THE STATE OF GUJARA T. HE ALSO REDUCED THE SALE PRICE OF THE SEEDS BY THE ASSESSEE. HE FOU ND SALE PRICE OF THE PRODUCT AND ADDED 30% TO IT SO AS TO DETERMINE THE SALE PRICE OF THE SEEDS. ACCORDINGLY LD. CIT (A) ENHANCED THE ADDITIO N FROM RS.1,65,867/- MADE BY THE ASSESSING OFFICER TO RS.1 2,60,921/-. THE ASSESSEE AGGRIEVED WITH THE ORDER OF LD. CIT (A) IS IN APPEAL BEFORE US. ITA NO2907/AHD/2010 & ITA.151/AHD/2011 JYOTIBEN A. PATEL VS. ITO WD.6|(2) FOR AYRS 2006-07 & 2007-08 3 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE ORDER OF THE CIT (A) IS PURELY BASED UPON VARIOUS PRESUMPTIONS. HE FIRST ESTIMATED THE QUANTI TY OF THE CROP AT THE AVERAGE PRODUCTION IN THE STATE. IT WAS EXPLAIN ED BY THE LD. COUNSEL THAT THE ASSESSEE IS PRODUCING THE SEEDS AN D ITS AGRICULTURAL ACTIVITY IS NOT NORMAL AGRICULTURAL ACTIVITY BY A S IMPLE FARMER. ITS AGRICULTURAL FARM IS RESEARCH BASED HYBRIDS SEED PR ODUCTION FARM. THE ENTIRE PRODUCT OF THE ASSESSEE IS SOLD AS A SEED. T HAT THE SALE PRICE OF THE SEED IS 7 TO 8 TIMES MORE THAN THE SALE PRICE O F SUCH PRODUCT. THE PRESUMPTION OF THE LD. CIT (A) THAT THE SALE PRICE OF THE SEED IS 30% HIGHER THAN THE SALE PRICE OF COMMODITY IS FACTUALL Y INCORRECT. HE REFERRED TO THE DETAILS FURNISHED BEFORE THE LD. CI T (A) WHICH IS ALSO REPRODUCED BY HIM IN HIS ORDER. THE ASSESSEE HAS GI VEN THE PRICE OF CASTOR AS A NORMAL COMMODITY AND THE PRICE OF CASTO R SEEDS. THE LD. CIT (A) HAS REPRODUCED THE SAME IN CHART AT PAGE-15 OF HIS ORDER WHICH READS AS UNDER:- SR.NO. NAME OF THE CROP PRICE PER KG FOR NORMAL MARKET. PRICE PER KG FOR SEEDS SOURCE 1. CASTOR RS.34.87(AVG. OF 684 TO 711 FOR 20 KGS. 1)NEWSPAPER CUTTING OF MARKET RATE. RS. 295 2) PRICE LIST OF AGRI. UNIVERSITY. RS. 300 3)M/S. SAGAR LAXMI SEEDS RS. 281 4)M/S. WESTERN AGRI SEEDS LTD. RS. 270 5) INDO AGRI. GENETICS ITA NO2907/AHD/2010 & ITA.151/AHD/2011 JYOTIBEN A. PATEL VS. ITO WD.6|(2) FOR AYRS 2006-07 & 2007-08 4 6. FROM THE ABOVE IT IS EVIDENT THAT THE PRICE PER KG OF CASTOR OF NORMAL PRODUCT IS ABOUT RS.35 WHILE THE PRICE OF SE ED PER KG IS RANGING BETWEEN RS.270 TO RS.300/-. THE LD. CIT (A) HAS REP RODUCED THE ABOVE CHART IN HIS ORDER BUT HAS NOT CONSIDERED WHILE WOR KING OUT THE VALUE OF THE ASSESSEES PRODUCE, WHICH WAS SEED. IN VIEW OF THE ABOVE WE ARE OF THE OPINION THAT THE ENHANCEMENT MADE BY THE LD. CIT (A) IS BASED PURELY UPON THE PRESUMPTIONS AND SUCH PRESUMP TIONS ARE CONTRARY TO FACTS ON RECORD. IN VIEW OF THE ABOVE W E SET ASIDE THE ENHANCEMENT MADE BY THE LD. CIT (A). 7. COMING TO THE ESTIMATION OF AGRICULTURAL INCOME BY THE ASSESSING OFFICER WE FIND THAT THE SALE OF THE SEED S DISCLOSED BY THE ASSESSEE IS DULY SUPPORTED BY THE BILLS AND VOUCHER S AND ALSO THE CONFIRMATION OF THE BUYER. THEREFORE, THE ASSESSING OFFICER FAIRLY ACCEPTED THE SALE VAL UE OF THE SEEDS. HOWEVER, SO FAR AS EXPENDITURE IS CONCERNED THE ASSESSEE HAS NOT PRODUCED THE COMPLETE DETAILS OF T HE EXPENDITURE OR ANY SUPPORTING VOUCHER SO AS TO VERIFY THE CORRECTN ESS OF THE EXPENDITURE CLAIMED TO HAVE BEEN INCURRED. IN SUCH CIRCUMSTANCES THE ASSESSING OFFICER RELYING UPON THE DECISION OF THE ITAT IN THE CASE OF SHRI DHIRUBHAI L. NARULA & OTHERS V/S. ITO VIDE ITA NO.2190- 2192/AHD/2004 ORDER DT. 17-04-2004 HAS ESTIMATED TH E EXPENDITURE AT 40% OF THE SALE PROCEED. AT THE TIME OF HEARING BEF ORE US ALSO THE LD. COUNSEL FOR THE ASSESSEE COULD NOT PRODUCE THE DETA ILS OF THE EXPENDITURE INCURRED BY THE ASSESSEE FOR HIS AGRICU LTURAL ACTIVITY. IN THE ABOVE CIRCUMSTANCES WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF ITA NO2907/AHD/2010 & ITA.151/AHD/2011 JYOTIBEN A. PATEL VS. ITO WD.6|(2) FOR AYRS 2006-07 & 2007-08 5 THE A.O. WE THEREFORE, REVERSE THE ORDER OF THE LD. CIT (A) AND UPHELD THAT OF THE ASSESSING OFFICER. ITA NO.151/AHD/2011. A.Y.2007-08. 8. IN THIS YEAR ALSO THE FACTS ARE IDENTICAL. THE A SSESSEE HAS DISCLOSED THE AGRICULTURAL INCOME AT RS.15,59,255/-.ASSESSING OFFICER ESTIMATING THE EXPENDITURE @ 40% OF THE RECEIPT MADE THE ADDIT ION OF RS.1,37,882/-. LD. CIT(A) ENHANCED THE ADDITION TO RS.10,93,388/-. THE FACTS ARE ADMITTEDLY IDENTICAL TO ASSESSMENT YEAR 2 006-07. FOR THE DETAILED DISCUSSION THEREIN WE REVERSE THE ORDER OF THE LD. CIT (A) AND RESTORE THAT OF ASSESSING OFFICER. 9. IN THE RESULT, ASSESSEES APPEALS ARE PARTLY ALL OWED. ORDER PRONOUNCED IN THE COURT ON 20TH AUGUST, 2015 AT AHMEDABAD. /-S SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 20 /08/2015 PATKI !'#'$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. !' # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. &'( ' , ' , ! / D R, ITAT, AHMEDABAD 6. (-. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD