The ITO, Ward-1, Navsari V. Shri Ajitkumar Roshanla Ranka, Navsari

ITA 3154/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72896 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Keywords: Depreciation

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.3154/AHD/2010 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : 2007-08) THE INCOME TAX OFFICER WARD-1 NAVSARI / VS. SHRI AJITKUMAR ROSHANLAL RANKA G/3, ASHRAYA APARTMENT OPP. CONVENT SCHOOL GANDEVRI ROAD, NAVSARI ( !./)* !./ PAN/GIR NO. : AAVPR 7410 A ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI O.P. BATHEJA, SR.DR ,-(+ / . / RESPONDENT BY : SHRI TUSHAR P.HEMANI, AR ' 0 / $1 / / / / DATE OF HEARING : 10/01/2014 23' / $1 / DATE OF PRONOUNCEMENT : 24/01/2014 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD (CIT(A) FOR SHORT) DATED 30/07/2010 PERTAINING TO ASSESSMENT YEAR (AY) 2007-08. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.7,65 ,618/- MADE ON ACCOUNT OF AGRICULTURAL INCOME TREATED AS INCOME FR OM OTHER SOURCE. ITA NO.3154/AHD /2010 ITO VS. SHRI AJITKUMAR ROSHANLAL RANKA ASST.YEAR 2007-08 - 2 - (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.19,3 90/- MADE ON ACCOUNT OF LOW WITHDRAWAL FOR HOUSE-HOLD EXPENSES. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN GRANTING RELIEF OF RS.7,162/- ON ADDITION MADE ON ACCOUNT OF DISALLOWANCE EXPENSES OF PERSONAL NAT URE. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ADDITION MADE BY THE A.O. (5) IT IS, THEREFORE, PRAYED TO SET ASIDE THE ORDER PAS SED BY THE CIT(A) AND THAT OF THE ORDER PASSED BY THE AO BE RESTORED. (6) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY GROUNDS OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 23/12/2009, THEREBY THE ASSESSING OFFICER(AO) MADE VARIOUS ADDITIONS ON ACCOUNT OF HOUSE-HOLD EXPENSES AND DIS ALLOWANCE OF THE AGRICULTURAL INCOME TREATED AS INCOME FROM OTHER SO URCE. AGAINST THIS, ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL, THEREBY THE ADDITION ON ACCOUNT OF DISALLOWANCE OF AGRICULTURAL INCOME WAS DIRECTED TO BE DELETED AND REDUCED THE DISALLOWANCE OF CAR AND TELEPHONE EXPEN SES AND ALSO TOWARDS LOW HOUSE-HOLD WITHDRAWALS. NOW THE REVENUE IS IN FURTHER APPEAL BEFORE US. ITA NO.3154/AHD /2010 ITO VS. SHRI AJITKUMAR ROSHANLAL RANKA ASST.YEAR 2007-08 - 3 - 3. THE FIRST GROUND IS AGAINST DELETION OF ADDITION OF RS.7,65,618/- ON ACCOUNT OF UNEXPLAINED AGRICULTURAL INCOME TREATED AS INCOME FROM OTHER SOURCE. 3.1. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE AO HAS GIVEN A FINDING THAT THE ASSESSEE FAILED TO FURNISH THE DETAILS OF AGRICULTURAL EXPENSES ALONG WITH BILLS AND VOUCHERS IN RESPECT OF CULTIVATION, HARVESTING, SEEDING, LABOUR, IRRIGATIO N, WEEDING, THRASHING, PACKING, MARKETING, TRANSPORTING, ETC. HENCE, THE RESULT ARE NOT OPEN FOR VERIFICATION. HOWEVER, LD.CIT(A) DELETED THE ADD ITION ON THE BASIS THAT THE AO HAS NOT FOUND ANY GLARING DEFECT IN THE AGRE EMENT WITH THE LESSER OF LAND FROM WHOM LAND IS TAKEN ON GANOT BY THE APPELLANT SINCE 2005. ALMOST THE SAME QUANTUM OF AGRICULTURAL IN COME OF THE APPELLANT HAS BEEN ACCEPTED IN THE ASSESSMENT PROCEEDINGS OF EARLIER YEARS. THE LD.SR.DR SUBMITTED THAT EVERY ASSESSMENT YEAR IS AN INDEPENDENT YEAR, THEREFORE LD.CIT(A) WAS NOT JUSTIFIED. 4. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE SUB MITTED THAT ASSESSEE HAS EARNED INCOME OF RS.13,72,140/- DURING THE YEAR UNDER CONSIDERATION BY CULTIVATING ON HIS OWN LAND (42.66 VIGHAS) AS WE LL AS LAND OF OTHER FARMERS (53.85 VINGHAS) BY TAKING THE SAME ON GANO T AT VILLAGES NAMELY TIGHRA, BHUTSAD, ITALVA AND PARDI. THE AS SESSING OFFICER HAS MERELY DOUBTED THE AGRICULTURAL INCOME EARNED BY CU LTIVATING LAND OF OTHER FARMERS WHICH WAS WORKED OUT BY HIM AT RS.7,6 5,618/- AND HE MADE THE IMPUGNED ADDITION BY TREATING SUCH AGRICU LTURAL INCOME AS INCOME EARNED FROM OTHER SOURCES. HE SUBMITTED TH AT THE AO FAILED TO ITA NO.3154/AHD /2010 ITO VS. SHRI AJITKUMAR ROSHANLAL RANKA ASST.YEAR 2007-08 - 4 - APPRECIATE THE AGREEMENTS ENTERED INTO IN 2005 BY T HE ASSESSEE WITH PADMABEN R.RANKA (MOTHER) AND ANJALIBEN D.SHAH (MOT HER-IN-LAW) ACCORDING TO WHICH THE ASSESSEE CULTIVATED THEIR AG RICULTURAL LAND SINCE THOSE PERSONS WERE NOT ABLE TO CULTIVATE LAND ON AC COUNT OF THEIR OLD AGE. HE SUBMITTED THAT THE AO HAS NOT GIVEN ANY ADVERSE COMMENTS ON SUCH AGREEMENTS, NOR PROVED THAT THE SAME WERE SHAM AGRE EMENTS. HER FURTHER SUBMITTED THAT THE AO DID NOT GIVE ANY COMMENTS ON SALES INVOICES AND PURCHASE BILLS IN RESPECT OF SUCH AGRICULTURAL INCO ME AND EXPENSES RESPECTIVELY. HE SUBMITTED THAT THE INCOME HAS CON TINUOUSLY BEEN ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS AND REL IED ON THE DECISION OF THE LD.CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDINGS AT P ARA NOS.7 TO 7.3 IN HIS ORDER ACCEPTING THE CLAIM OF THE ASSESSEE. HOWEVER , THE AO HAD DISBELIEVED THE CLAIM ON THE BASIS THAT THE ASSESSE E DID NOT PLACE ON RECORD OTHER EVIDENCES, NAMELY, BILLS AND VOUCHERS IN RESPECT OF CULTIVATION, HARVESTING, SEEDING, LABOUR, IRRIGATIO N, WEEDING, THRASHING, PACKING, MARKETING, TRANSPORTING, ETC. THE AO HAD RECORDED THAT THE ASSESSEE HAS FURNISHED SALE INVOICES, PURCHASE BILL S OF FERTILIZERS, PESTICIDES, ETC. AFTER CONSIDERING THE RIVAL CONTE NTIONS, WE FIND FORCE IN THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE T HAT THE AO HAS NOT GIVEN A FINDING ON THE AGREEMENT EXECUTED BY THE AS SESSEE WITH THE OTHER FARMERS. THE AO HAS ACCEPTED THE CLAIM OF EARNING AGRICULTURE INCOME OF THE ASSESSEE QUA HIS LAND BUT DISBELIEVED HIS CLAIM IN RESPECT OF OTHER ITA NO.3154/AHD /2010 ITO VS. SHRI AJITKUMAR ROSHANLAL RANKA ASST.YEAR 2007-08 - 5 - FARMERS, THIS KIND OF ACT OF THE AO IS NOT JUSTIFI ED. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), T HE SAME IS HEREBY UPHELD. THUS, GROUND NO.1 OF REVENUES APPEAL IS D ISMISSED. 6. GROUND NO.2 IS AGAINST THE DELETION OF ADDITION OF RS.19,390/- MADE ON ACCOUNT OF LOW WITHDRAWAL FOR HOUSE-HOLD EX PENSES. 6.1. THE LD.SR.DR SUPPORTED THE ORDER OF THE ASSESS ING OFFICER. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ASSESSEE HAD SHOWN HOUSEHOLD WITHDRAWAL OF RS.1,30,610/- AND AO ESTIMATED THE SAME AT RS.1,50,000/- AND, CONSEQUENTLY, MADE THE I MPUGNED ADDITION OF RS.19,390/-. HE SUBMITTED THAT AO FAILED TO APPREC IATE THAT ASSESSEES FAMILY CONSISTS OF FOUR MEMBERS. HE SUBMITTED THAT ASSESSEE STAYS AT NAVSARI IN A SMALL FLAT AND HIS COST OF LIVING IS V ERY LOW AND AVERAGE MONTHLY WITHDRAWAL OF THE ASSESSEE IS APPROX.RS.10, 900/- WHICH IS SUFFICIENT TO TAKE CARE OF MONTHLY HOUSEHOLD EXPENS ES OF ASSESSEES FAMILY. HE SUBMITTED THAT AO HAS NEITHER FOUND AN Y DEFECT IN ASSESSEES BOOKS OF ACCOUNT NOR HAS HE GIVEN A FINDING THAT AS SESSEE HAS MET ANY HOUSEHOLD EXPENSES OUTSIDE THE BOOKS OF ACCOUNT. H E SUBMITTED THAT AO HAS MERELY ESTIMATED HOUSEHOLD EXPENSES AT RS.1,50, 000/- WITHOUT ANY BASE AT ALL. HE RELIED ON THE DECISION OF RAJ KUMA R JAIN VS. ACIT REPORTED AT 50 ITD 1 (ALLAHABAD ) (TM) AND GOVIND R AM CHHUGANI VS. ACIT REPORTED AT 77 TTJ 339 (JODHPUR). THEREFORE, T HE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF LD.CIT(A). 6.2. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.3154/AHD /2010 ITO VS. SHRI AJITKUMAR ROSHANLAL RANKA ASST.YEAR 2007-08 - 6 - WE FIND FORCE IN THE CONTENTION OF THE LD.COUNSEL F OR THE ASSESSEE, THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, GROUND NO.2 OF THE RE VENUES APPEAL IS DISMISSED. 7. GROUND NO.3 IS AGAINST IN GRANTING RELIEF OF RS. 7,162/- ON THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE EXPENSES O F PERSONAL NATURE. 7.1. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO, WH EREAS THE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO M ADE AD HOC DISALLOWANCE OF RS.13,162/- BEING 20% OF FIVE EXPEN SES ON THE COUNT THAT CERTAIN EXPENSE OF THE SAME MIGHT BE PERSONAL IN NA TURE AND THE AO FAILED TO APPRECIATE THAT THE ASSESSEE HAS INCURRED ENTIRE SUCH EXPENDITURE EXCLUSIVELY FOR THE BUSINESS. HE SUBMITTED THAT TH E AO FAILED TO APPRECIATE THAT THE ASSESSEE HAS METICULOUSLY MAINT AINED THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM OF EX PENDITURE UNDER THE HEAD MOTOR CAR EXPENSES, DEPRECIATION, MOTOR CAR IN SURANCE AND TELEPHONE EXPENSES. HE SUBMITTED THAT AO DID NOT GIVE ANY FINDING ON THE EFFECT THAT CERTAIN PORTION OF SUCH EXPENSES WA S PERSONAL IN NATURE AND DID NOT FIND ANY DEFECT IN THE BOOKS OF ACCOUNT . 7.1. AFTER HEARING BOTH THE SIDES AND LOOKING TO TH E FACTS OF THE CASE, WE FIND FORCE IN THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE, THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD .CIT(A), THE SAME IS HEREBY UPHELD. THUS, GROUND NO.3 OF THE REVENUES APPEAL IS DISMISSED. ITA NO.3154/AHD /2010 ITO VS. SHRI AJITKUMAR ROSHANLAL RANKA ASST.YEAR 2007-08 - 7 - 8. GROUND NOS.4 TO 6 ARE GENERAL IN NATURE WHICH RE QUIRE NO INDEPENDENT ADJUDICATION. 9. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 24/ 01 /2014 71.., .../ T.C. NAIR, SR. PS 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ ': / CONCERNED CIT 4. ':() / THE CIT(A)-VALSAD 5. 8 #; ,$ , , / DR, ITAT, AHMEDABAD 6. ;<& =0 / GUARD FILE. 4' 4' 4' 4' / BY ORDER, -8$ ,$ //TRUE COPY// > >> >/ // / !) !) !) !) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 15.1.14 (DICTATION-PAD 8 PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.1.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER