Shri Nilesh Navinchandra Shah, Baroda V. The Income tax Officer,Ward-3(2), Baroda

ITA 3135/AHD/2011

• Counselvise Citation: 313520514 RSA 2011
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-10-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 09-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHUBRATA VERMA JDIT
• Assessee Lawyers: P G SHAH
• Section: 2

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , !' # ' !' # ' !' # ' !' # ' BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.3135 AND 3136/AHD/2011 [ASSTT.YEAR : 2004-2005] NILESH NAVINCHANDRA SHAH C/O.P.G. SHAH (TAX CONSULTANT) 407, SILVERLINE, SAYAJIGUNJ BARODA 390 005. /VS. ITO, WARD-3(2) BARODA. ( (( (%& %& %& %& / APPELLANT) ( (( ('(%& '(%& '(%& '(%& / RESPONDENT) )* + , #/ ASSESSEE BY : SHRI P.G. SHAH . + , #/ REVENUE BY : SMT. SHUBRATA VERMA, JDIT / + *01/ DATE OF HEARING : 15 TH OCTOBER, 2013 234 + *01/ DATE OF PRONOUNCEMENT : 02.12.2013 #5 / O R D E R THESE TWO APPEALS BY THE ASSESSEE FOR THE ASSESSMEN T YEAR 204-2005 ARE DIRECTED AGAINST THE ORDER OF THE CIT( A). THESE ARE BEING DISPOSED WITH THIS CONSOLIDATED ORDER: ITA NO.3136/AHD/2011 (QUANTUM APPEAL) 2. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1. ON THE FACTS OF THE CASE AND IN LAW THE LD.CIT(A ) ITA NO.3135 AND 3136/AHD/2011 -2- ERRED IN CONFIRMING AGRICULTURAL INCOME ON 0.76.09 HECTARES OF LAND INSTEAD OF 3.55.26 HECTARE LAND BE LONGING TO ASSESSEE AND FAILED TO ADD OPENING STOCK OF ` 1, 21,200/- IN ARRIVING THE SALES REALISATION. 2. THAT THE LD.CIT(A) ERRED IN CONSIDERING AGRICULT URAL INCOME, EXEMPT UNDER THE PROVISIONS OF ACT UNDER PROVISIONS (II) OF SEC.56(1) AS INCOME FROM OTHER S OURCES. 3. THAT LD.CIT(A) ERRED IN CONSIDERING AGRICULTURAL INCOME OF RS.4,69,007/;- AS INCOME FROM OTHER SOURC ES BY INQUIRING THE ACTUAL RECEIPT OF SALES PRICE REALIZE D. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AO HAS NOT ACCEPTED THE AGRICULTURAL INCOME OF RS.4,96,480 /- DECLARED BY IT FROM HIS 3.55.26 HECTARE OF AGRICULTURE LAND, AND H AS ACCEPTED THE AGRICULTURAL INCOME AT RS.12,605 ONLY AND HAS ASSES SED THE ASSESSEE AT RS.4,83,875/- UNDER THE HEAD INCOME FROM OTHER SOU RCES. HE SUBMITTED THAT THE ASSESSEE HAS TAKEN LAND OF OTHER S ALSO FOR THE PURPOSE OF AGRICULTURE OPERATIONS AND THE LAND IS F ERTILE AND TOBACCO WAS GROWN IN THE LAND, AND NO ADDITION WAS CALLED F OR. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND THE CIT(A ). 4. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). I FIND THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME DECLARING NIL INCOME AND AGRICULTURE INCOME OF ` 4,96,480/-. THE ASSESSEE HAS TAKEN A STAND THAT IT HAS CULTIVAT ED AGRICULTURE LAND OF 3.55.26 HECTARE, AND THERE WAS AN OPENING STOCK AT ` 1,20,000/- WITH THE ASSESSEE. THE CIT(A) HAS NOT ACCEPTED THE PLEA OF THE ASSESSEE AND HAS TAKEN THE AGRICULTURE INCOME OF THE ASSESSE E AT ` 27,473/- ONLY. I FIND THAT THERE IS NO MATERIAL ON RECORD T O CONTROVERT THE CLAIM OF THE ASSESSEE THAT IT HAS CULTIVATED THE AGRICULT URE LAND BELONGING TO ITA NO.3135 AND 3136/AHD/2011 -3- OTHERS ALSO. THE ASSESSEE HAS GROWN TOBACCO ON THE AGRICULTURE LAND, AND THE TOTAL LAND UNDER CULTIVATION CLAIMED BY IT WAS 3.55.26 HECTARES. THE ASSESSEE HAS CLAIMED OPENING STOCK OF ` 1,21,200/- ALSO. THE ESTIMATE OF AGRICULTURE INCOME MADE BY THE REVENUE IS APPARENTLY ON THE LOWER SIDE. HOWEVER, THE AGRICULTURE INCOME SH OWN BY THE ASSESSEE AT ` 4,96,480/- FROM 3.55.26 HECTARES OF AGRICULTURE LA ND IS ALSO ON THE HIGHER SIDE. IN THESE FACTS OF THE CAS E, THERE IS NO ALTERNATIVE BUT TO MAKE A FAIR ESTIMATE OF AGRICULT URE INCOME CONSIDERING THE EXTENT OF THE LAND AND THE SALE PRI CE OF TOBACCO, AND THAT THE ASSESSEE HAS FERTILE AGRICULTURE LAND. CO NSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE IN TOTALI TY, I AM OF THE VIEW THAT THE ENDS OF JUSTICE SHALL BE MET, IF THE AGRIC ULTURE INCOME OF THE ASSESSEE IS ESTIMATED FOR THE RELEVANT YEAR AT ` 2,50,000/- AS AGAINST ` 4,96,480/- DECLARED BY THE ASSESSEE. IT SHALL INCL UDE THE BENEFIT OF OPENING STOCK OF ` 1,21,200/- CLAIMED BY THE ASSESSEE. THE AO IS DIRECTED TO WORK OUT THE TOTAL INCOME ACCORDINGLY, AND THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. ITA NO.3135/AHD/2011 (PENALTY UNDER SECTION 271(1)( C) OF THE ACT) 5. THE ONLY ISSUE IN THIS APPEAL IS REGARDING VALID ITY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT OF ` 1,21,425/-. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PENALTY WAS LEVIED ON ACCOUNT OF LOWER ESTIMATE OF AGRICULTURE INCOME OF THE ASSESSEE, AND ASSESSING THE DIFFERENCE BETWEEN THE DECLARED INCOM E AND ESTIMATED AGRICULTURE INCOME BY THE DEPARTMENT. HE SUBMITTED THAT THE ADDITION HAS BEEN MADE BY WAY OF ESTIMATE ONLY, AND THEREFOR E, THE PENALTY SHOULD NOT HAVE BEEN LEVIED. HE SUBMITTED THAT A LL THE MATERIAL FACTS ITA NO.3135 AND 3136/AHD/2011 -4- INCLUDING THE LAND HOLDING SUPPORTED BY THE REVENUE RECORDS WERE SUBMITTED BEFORE THE AO. MERELY BECAUSE THE AGRICU LTURE INCOME WAS ESTIMATED AT LESSER FIGURE, IT SHOULD NOT HAVE BEEN MADE BASIS FOR LEVY OF PENALTY. THE LEARNED DR HAS RELIED ON THE ORDER S OF THE AO AND THE CIT(A). 6. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED ORDERS OF THE AO AND THE CIT(A). I FIND THAT THE ASSESSEE HAS DE CLARED AGRICULTURE INCOME AT ` 4,96,480/- FROM 3.55.26 HECTARES OF AGRICULTURE LA ND. THE CIT(A) HAS ACCEPTED THE AGRICULTURE INCOME OF ` 27,473/-. THE TRIBUNAL IN SECOND APPEAL OF THE ASSESSEE, IN THE F OREGOING PARAS OF THIS ORDER, WHILE DISPOSING OF THE APPEAL OF THE AS SESSEE, HAS ESTIMATED THE AGRICULTURE INCOME OF THE ASSESSEE FOR THE RELE VANT PERIOD AT ` 2,50,000/-. I FIND THAT ALL THE MATERIAL FACTS RE LEVANT TO THE ASSESSMENT WAS DISCLOSED BY THE ASSESSEE AT THE TIME OF ASSESS MENT BEFORE THE AO. THE ASSESSEE IS AN AGRICULTURIST AND HAS FILED THE COPIES OF THE REVENUE RECORD IN SUPPORT OF ITS CLAIM OF AGRICULTU RE LAND OWNED BY HIM, AND ALSO MORTGAGED IN ITS FAVOUR. THE REVENUE COULD NOT CONTROVERT THIS EVIDENCE FILED BY THE ASSESSEE. HO WEVER, THE ONLY DISPUTE IS WITH REGARD TO THE ESTIMATE OF AGRICULTU RE INCOME. I AM OF THE VIEW THAT MERELY BECAUSE THE CLAIM OF THE ASSES SEE OF HAVING AGRICULTURE INCOME AT ` 4,96,480/- COULD NOT ACCEPTED IN FULL, AND HAS BEEN REDUCED TO ` 2,50,000/- IN APPEAL BY THE TRIBUNAL, THE ASSESSEE COULD NOT BE MADE LIABLE TO PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME OR FILING OF INACCURATE P ARTICULARS OF INCOME. THERE IS NO INCRIMINATING MATERIAL BROUGHT ON RECORD ON BEHALF OF THE REVENUE TO SHOW THAT THE EXPLANATION OF THE ASSESSEE WAS NOT BONA FIDE ON THIS ISSUE. THE FACTS OF THE CASE MAY JUSTIFY THE LOWER ITA NO.3135 AND 3136/AHD/2011 -5- ESTIMATE OF AGRICULTURE INCOME, WHEN COMPARED TO TH E AGRICULTURE INCOME DECLARED BY THE ASSESSEE, BUT ARE NOT SUFFIC IENT TO VISIT THE ASSESSEE WITH PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. IN THESE FACTS OF THE CASE, I HOLD THAT NO CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT COULD BE MADE OUT BY THE REVEN UE, AND ACCORDINGLY PENALTY IMPOSED IS CANCELLED, AND THE G ROUNDS OF THE APPEALS OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, ITA NO.3136/AHD/2011 IS PARTLY AL LOWED AND ITA NO.3135/AHD/2011 IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD