DINESH KANJI CHAUDHARI, NAVI MUMBAI V. ITO WD -1, PANVEL

ITA 3472/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75819 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S ATISH CHANDAK
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 68; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES D, MUMBAI .. , , . , !' ! # BEFORE SHRI I P BANSAL, JM, & SHRI D KARUNKARA RAO, AM ./ITA NO.3472/MUM/2012 ( $ % / ASSESSMENT YEAR: 2007-08) SHRI DINESH KANJI CHAUDHARI 1-4 R.NO.17, 5 TH FLOOR, SPEGATTY SECTOR-15, KHARGAR, NAVI MUMBAI PAN : AGHPP4991Q VS. ITO WARD 1, PANVEL. ( &' /APPELLANT) ( ()&' / RESPONDENT) APPELLANT BY : SHRI SATISH CHANDAK RESPONDENT BY : SHRI SANJEEV JAIN DATE OF HEARING : 20.03.2014 DATE OF PRONOUNCEME NT : 20.03.2014 !* / O R D E R PER I P BANSAL, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AND IS DIRECTE D AGAINST THE ORDER PASSED BY THE CIT(A) DATED 06.02.2012 FOR A.Y. 2007-08. T HE GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE LD. A.OS ACTION IN NOT ACCEPTING THE INCOME CREDITED IN THE BOOKS OF ACCOU NTS AS AGRICULTURE INCOME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE AND IN LAW THE LEARNED CITA) ERRED IN CONFIRMING THE ADDIT ION OF RS.31,00,000/- MADE BY THE LD. A.OS ON ACCOUNT OF U NEXPLAINED CASH CREDIT BY INVOKING SEC 68 OF INCOME TAX ACT, 1961. 2 ITA NO.3472/MUM/2012 AY:2007-08 3. THE APPELLANT CRAVES LEAVES TO ADD, TO AMEND, AL TER, MODIFY AND/OR WITHDRAW ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL EACH OF WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2. BEFORE PROCEEDING IT MAY BE MENTIONED THAT THE A PPEAL HAS BEEN FILED BELATEDLY AND THE DELAY IS OF ONE DAY. AN APPLICAT ION FOR CONDONATION OF DELAY HAS BEEN FILED. THE REASON HAS BEEN MENTIONED AS THAT THE PAPERS WERE RECEIVED BY THE COUNSEL OF THE ASSESSEE LATE IN THE EVENING ON 15.0 5.2012, WHICH WAS FILED ON 16.05.2012. IN VIEW OF THIS SITUATION, AFTER HEARI NG BOTH THE PARTIES, WE CONDONE THE DELAY AND PROCEED TO DISPOSE OF THE APPEAL OF THE A SSESSEE ON MERITS. 3. THE ASSESSEE IS AN INDIVIDUAL AND EARNING INCOME FROM THE ACTIVITY OF BUILDER & DEVELOPER, CIVIL CONTRACTOR AND SUB-CONTRACTOR AN D ESTATE AGENT. APART FROM AFOREMENTIONED INCOME AN AGRICULTURAL INCOME OF RS. 31 LACS WAS DECLARED IN THE RETURN. THE AO REQUIRED THE ASSESSEE TO EXPLAIN TH E SAME. IT WAS SUBMITTED THAT THE ASSESSEE WAS HAVING AGRICULTURAL LAND AT HIS NA TIVE PLACE IN GUJARAT, WHICH IS BEING CULTIVATED. THE CROP CULTIVATED THEREIN WAS SOLD IN THE MARKET AND THE SALE PRICE WAS RECEIVED ON CASH BASIS. FOR FY 2004-05 T O 2006-07, THE ASSESSEE STATED TO HAVE RECEIVED THE SALE PROCEEDS OF RS.15 LACS ON 05.02.2007AND RS.16 LACS ON 20.02.2009. IT WAS SUBMITTED THAT THESE ARE ACCUMU LATIVE RECEIPTS FOR THE LAST THREE YEARS BUT RECEIVED IN THE YEAR UNDER CONSIDERATION BY DEMAND DRAFT. FOLLOWING EVIDENCES WERE FILED TO SUPPORT THE CONTENTION: I) COPY OF 7/12 EXTRACT FOR THE FINANCIAL YEAR 200 6-07, AND COPY OF 8-A. (COPIES ENCLOSED WHICH FORM PART OF THIS ORDER) II) COPY OF SALES BILLS FOR THE FINANCIAL YEAR 2004 -05 TO 2006-07 III) COPY OF BANK STATEMENT, WHEREIN AGRICULTURAL R ECEIPTS DEPOSITED, IV) LETTER DT. 18 TH AUGUST 2009 SHOWING TOTAL AGRICULTURAL PRODUCTION, TOTAL EXPENDITURE & RECEIPT IN F.Y. 200 4-05 TO 2006- 07. V) COPY OF ACKNOWLEDGEMENT OF RETURN FILED FOR A.Y . 2005-06 & 2006- 07 HOWEVER, THE AO DID NOT ACCEPT THE SAID SUBMISSIONS OF THE ASSESSEE AND FROM THE DOCUMENTS FILED HE FOUND DISCREPANCIES IN THE EVIDE NCES AS AGAINST THE CLAIM OF THE ASSESSEE AS UNDER: 3 ITA NO.3472/MUM/2012 AY:2007-08 1. THE COPY OF 7/12 EXTRACT SUBMITTED IS ONLY FOR THE F.Y. 2006-07 AND NOT FOR THE YEAR 2004-05 & 2005-06 WHEREIN AGL. INC OME WAS SHOWN. 2. IN 7/12 EXTRACT AND COPY OF 8A SUBMITTED, IT IS CLE AR THAT ASSESSEE IS JOINT OWNER OF THE LAND ALONG WITH FIVE OTHER MEMBE RS IN LAND HOLDING AND SINGLE OWNER IN ONLY 3 LANDS HOLDING. 3. THE 7/12 EXTRACT DO NOT SPECIFY NATURE OF CROP TAKE N THEREIN, WHICH IS GENERALLY FOUND, ON THE CONTRARY IT VERY CLEARLY WRITTEN NO DETAIL ABOUT CROPS CULTIVATED DURING THE YEAR. 4. AS PER SALES BILLS, IT IS VERY MUCH CLEAR THAT SALE BILLS ARE IN THE NAME OF TWO PERSON/PARTY AND NOT ONLY IN ASSESSEES NAME. 5. SALE BILLS/MEMOS ISSUED IN THE NAME OF ASSESSEE AND HIS RELATIVE FOR THE PERIOD OF THREE YEARS AS PER LIST ENCLOSED HERE WITH, WHICH IS PART OF THIS ORDER. THE ASSESSEE WAS REQUIRED TO PRODUCE THE RETURN FOR A.YS. 2005-06 AND 2006-07 TO SUBSTANTIATE HIS CLAIM OF AGRICULTURAL INCOME. THE RELEVANT INFORMATION WAS PRODUCED IN THE SHAPE OF COPY OF ACKNOWLEDGMENT AND ENCLOSURES WHICH WAS DULY SIGNED BY THE AR AND FROM THE SAID EVIDENCES IT WAS NOTED BY THE AO THAT THE ASSESSEE HAS SHOWN HIS AGRICULTURAL INCOME RECEIVAB LE FROM THE PURCHASERS. HOWEVER, THE AO NOTICED THAT THE ASSESSEE DID NOT S HOWN ANY EXPENDITURE INCURRED IN THIS RESPECT AND THE INCOME FOR THE YEAR 2004-05 TO 2005-06 WAS SHOWN ON MERCANTILE BASIS. IN RESPONSE TO THE QUERY RAISED BY THE AO, THE ASSESSEE SUBMITTED THE FOLLOWING TABLE SHOWING YEAR-WISE INCOME, EXPEN DITURE AND RECEIPTS: FINANCIAL YEAR TOTAL AGRICULTURAL PRODUCTION TOTAL EXPENDITURE RECEIPT F.Y. 2004-2005 690245 100015 590230 F.Y. 2005-2006 1744921 243470 1501451 F.Y. 2006-2007 1086712 100712 986000 TOTAL 35,21,878 4,44,197 30,77,681 THE AO DISAGREED WITH THE SAID EXPLANATION OF THE A SSESSEE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PRODUCE THE PROOF OF AGRICUL TURAL EXPENSES; IF THE SALE PROCEEDS OF THE AGRICULTURAL INCOME WAS LYING WITH THE PURCHASERS THEN HOW COULD THE ASSESSEE MEET THE EXPENDITURE RELATING TO THE A GRICULTURAL INCOME AND WHEN THE SUM OF RS.15 LACS CREDITED TO THE ASSESSEES ACCOUN T ON 05.02.2009 OUT OF THE SALE OF AGRICULTURAL PRODUCE, IT WAS ADVANCED ON THE SAM E DAY TO M/S. VIVIDHA DEVELOPERS 4 ITA NO.3472/MUM/2012 AY:2007-08 RATHER THAN UTILIZING THE SAME AMOUNT FOR ASSESSEE S OWN BUSINESS. THE AO ALSO OBSERVED THAT THOUGH THE LAND WAS OWNED BY THE ASSE SSEE ANCESTRALLY BUT HE DID NOT SHOW AGRICULTURAL INCOME IN EARLIER YEARS. THE AO ALSO OBSERVED THAT THE ASSESSEE DID NOT PRODUCE EVIDENCE REGARDING PROOF OF PURCHAS E OF SEEDS, PESTICIDES, PAYMENT TO LABOURERS, TRANSPORTATION CHARGES, ETC. THE EVI DENCE SUBMITTED BY THE ASSESSEE IN THE SHAPE OF 7/12 EXTRACT OF THE LAND AND SALE B ILLS OF THE CROPS WERE NOT SUFFICIENT TO ESTABLISH THE CLAIM OF THE ASSESSEE REGARDING AG RICULTURAL INCOME OF RS. 31 LACS. THE AO FURTHER OBSERVED THAT JUST BECAUSE BILLS HAV E BEEN ARRANGED AND DEMAND DRAFT HAS BEEN OBTAINED FROM THE PURCHASERS FROM GU JARAT, IT CANNOT BE SAID THAT THE AGRICULTURAL INCOME IS GENUINE AND IN THIS MANNER T HE AO ADDED THE SAID AMOUNT OF RS.31 LACS TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. THE LEARNED CIT(A) HAS UPHELD THE ACTION OF THE AO. THE ASSESSEE IS AGGRI EVED AND, HENCE HAS FILED THE AFOREMENTIONED GROUNDS. 4. AFTER NARRATING THE FACTS IT WAS SUBMITTED BY TH E LEARNED AR THAT THOUGH THE 7/12 EXTRACT OBTAINED EARLIER DID NOT SHOW THE CROP , NOW THE ASSESSEE HAS OBTAINED FRESH COPIES ACCORDING TO WHICH THERE WAS CROP ON T HE LAND. HE SUBMITTED THAT THE ASSESSEE IS HAVING AGRICULTURAL LAND FOR WHICH THE PROOF HAS BEEN PRODUCED BEFORE THE AO AND THE AO ALSO DID NOT DENY THAT THE ASSESS EE DID NOT HAVE AGRICULTURAL LAND. THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT YEAR WISE DETAILS OF THE AGRICULTURAL PRODUCE WERE GIVEN ALONG WITH THE DETA ILS OF THE SALE OF AGRICULTURAL PRODUCE. THE PAYMENT WAS RECEIVED THROUGH DEMAND D RAFT. HE SUBMITTED THAT IN VIEW OF ALL THESE EVIDENCES THE CLAIM OF THE ASSESS EE COULD NOT BE DISALLOWED MORE PARTICULARLY IN VIEW OF THE FACT THAT ASSESSEE HAD DECLARED AGRICULTURAL INCOME IN EARLIER YEARS ALSO, WHICH FACT WAS VERIFIED BY THE AO AND HAS MENTIONED THIS IN THE ASSESSMENT ORDER ITSELF. 5. THE LEARNED AR DREW OUR ATTENTION TOWARDS THE CO PIES OF THE DOCUMENTS PLACED IN THE PAPER-BOOK, ACCORDING TO WHICH ALL DE TAILS WERE FILED BEFORE THE AO ALONG WITH THE QUANTITY OF PRODUCE, DATE OF BILL, B ILL NOS., THE NAME OF THE PURCHASER, NAME OF THE SELLER PARTY. THUS, IT WAS CONTENDED BY THE LEARNED AR THAT THE IMPUGNED ADDITION SHOULD BE DELETED. 6. ON THE OTHER HAND, IT WAS VEHEMENTLY PLEADED BY THE LEARNED DR THAT THE PLACE WHERE THE AGRICULTURAL LAND IS SITUATED IS NO T CAPABLE OF PRODUCING ANY CROP AS 5 ITA NO.3472/MUM/2012 AY:2007-08 PER THE INFORMATION OBTAINED FROM THE WEBSITE, COPY OF WHICH WAS SUBMITTED ON OUR RECORD. IT WAS FURTHER SUBMITTED BY HIM THAT THE D ATES WHEN CROPS HAS BEEN SOLD DID NOT MATCH WITH THE PRODUCTION DATES. THUS, IT WAS SUBMITTED BY HIM THAT THE ASSESSEES CLAIM REGARDING THE AGRICULTURAL INCOME IS NOT GENUINE AND THE AO HAS RIGHTLY TREATED THE SAID AMOUNT AS UNEXPLAINED CASH UNDER THE PROVISIONS OF SECTION 68 OF THE ACT AND THE ACTION OF THE AO HAS RIGHTLY BEEN UPHELD BY THE LEARNED CIT(A). HE SUBMITTED THAT THE APPEAL FILED BY THE ASSESSEE DESERVES TO THE DISMISSED. 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE ALSO GONE THROUGH THE ASSESSME NT ORDER, ORDER PASSED BY THE LEARNED CIT(A) AND THE EVIDENCES SUBMITTED BY THE A SSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE HAS GIVEN REQ UIRED DETAILS IN THE SHAPE OF RETURNS OF INCOME FILED IN RESPECT OF EARLIER YEARS ; 7/12 EXTRACT OF THE AGRICULTURAL LAND OWNED BY HIM ALONG WITH CO-OWNERS AND THE DETA ILS REGARDING SALE OF AGRICULTURAL PRODUCE BY GIVING THE NAME OF THE PURC HASING PARTY, SELLING PARTY, BILL NOS., BILL DATE, ITEM, QUANTITY AND THE RATE. ALL THESE DETAILS WERE SUBMITTED TO THE AO YEAR WISE. WHEN SUCH DETAILS ARE MADE AVAILABLE TO THE AO, THE AO WAS BOUND TO EXAMINE THE DETAILS TO ASCERTAIN THE GENUINENESS OF THE CLAIM OF THE ASSESSEE. HE COULD NOT REJECT THE CLAIM OF THE ASSESSEE WITHOUT EXAMINING THE DETAILS FILED BY THE ASSESSEE. KEEPING IN VIEW THE ENTIRETY OF FACTS AN D CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT IT WILL SERVE THE INTEREST OF JUSTICE IF THE MATTER IS RESTORED BACK TO THE FILE OF THE AO WITH A DIRECTION TO RE-A DJUDICATE THIS ISSUE AFTER EXAMINING THE EVIDENCES FILED BY THE ASSESSEE AND AFTER GIVIN G THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD. WE DIRECT ACCORDINGLY. 8. THE APPEAL FILED BY THE ASSESSEE IS CONSIDERED T O BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF MARCH, 2014. SD/- SD/- (D KARUNAKARA RAO) (I P BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 20 TH MARCH, 2014 SA 6 ITA NO.3472/MUM/2012 AY:2007-08 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, CONCERNED 4. THE CIT (A)-CONCERNED 5. THE DR, D BENCH, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI