The DCITKheda Circle, Nadiad V. Dr. Vithalbhai R.Patel, Nadiad

ITA 354/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57122 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 19-01-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 31-01-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K SRIVASTAVA
• Assessee Lawyers: S N SOPARKAR

Judgement Text

ITA NO.354/AHD/2008 ASSESSMENT YEAR 2001-02 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, A HMEDABAD. (BEFORE SHRI G.C.GUPTA, VICE PRESIDENT & SHRI B.R.B ASKARAN AM) ITA NO.354/ AHD/2008 (ASSESSMENT YEAR 2001-02) THE DEPUTY COMMISSIONER OF INCOME TAX, KHEDA CIRCLE, NADIAD. (APPELLANT) VS. DR. VITHALBHAI R. PATEL, PROP. PATEL EXPORT CP., SARVODAY HOSPITAL, BUILDING, DABHAN BHAGOL, NADIAD. (RESPONDENT) PAN: AOPP 1428 N APPELLANT BY : SHRI P.K.SRIVASTAVA, SR.D. R. RESPONDENT BY : SHRI S.N. SOPARKAR, SR. ADVOCA TE. DATE OF HEARING : 19-1-2012 DATE OF PRONOUNCEMENT : 25-1-2012 ( (( ( )/ )/)/ )/ ORDER PER: SHRI B.R.BASKARAN, A.M. THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 17.3.2005 PASSED BY LD CIT(A)-IV, BARODA AND IT REL ATES TO THE ASSESSMENT YEAR 2001-02. THIS APPEAL IS BARRED BY LIMITATION BY 4 DAYS. THE DEPARTMENT HAS MOVED A PETITION REQUESTING THE BENC H TO CONDONE THE DELAY. HAVING REGARD TO THE SUBMISSIONS MADE THEREIN, WE C ONDONE THE DELAY AND ADMIT THE APPEAL. 2. THE SOLITARY ISSUE URGED IN THIS APPEAL IS WHETHER THE LD CIT(A) IS JUSTIFIED IN HOLDING THAT THE AO HAS ERRED IN NOT A CCEPTING THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. ITA NO.354/AHD/2008 ASSESSMENT YEAR 2001-02 2 3. THE FACTS RELATING TO THE SAID ISSUE ARE STA TED IN BRIEF. THE ASSESSEE DECLARED AN AGRICULTURAL INCOME OF RS.85,41,070/- I N HIS RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. THE MAIN P RODUCT CULTIVATED BY THE ASSESSEE WAS GRAPES IN THAT YEAR. THE AO FOUND F AULT WITH THE YIELD PER ACRE DECLARED BY THE ASSESSEE AND ALSO WITH THE PRI CE PER KG DISCLOSED. ACCORDINGLY HE DETERMINED THAT THE AGRICULTURAL INC OME DECLARED BY THE ASSESSEE IS IN EXCESS TO THE TUNE OF RS.79,93,628/- AND ASSESSED THE SAME AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. IN THE APPEAL FILED BY THE ASSESSEE, THE LD CIT (A) DELETED THE SAID ADDIT ION. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. WE NOT ICE THAT THE LD CIT(A) HAS BROUGHT OUT FOLLOWING DEFECTS IN THE FINDING OF THE AO, WHICH HAVE MAJOR BEARING IN THE AGRICULTURAL INCOME DETERMINED BY HI M. (A) THE AO HAS TAKEN THE EXTENT OF LAND AS 25 ACRE S, WITHOUT DISPROVING THE STATEMENT OF THE ASSESSEE THAT HE HA S CULTIVATED THE LANDS STANDING IN HIS NAME AND ALSO IN THE NAME OF HIS FAMILY MEMBERS. (B) THE AO HAS PROCEEDED UNDER THE IMPRESSION THAT THE ASSESSEE HAS SOLD THE GRAPES. HE HAS NOT APPRECIATED THE FA CT THAT THE ASSESSEE HAS SOLD KISMISS (DRIED GRAPES). (C) THE ASSESSEE WAS HAVING ON HAND 1,04,500 KG S OF KISMISS AS AT THE BEGINNING OF THE FINANCIAL YEAR AS OPENING STOC K. DURING THE YEAR HE HAS SOLD ABOUT 1.58 LAKHS KGS OF KISMISS DURING THE YEAR UNDER CONSIDERATION. THUS, OUT OF THE SAID SALES, ABOUT 2 /3 RD OF THE TOTAL QUANTITIES WERE OUT OF OPENING STOCK. ITA NO.354/AHD/2008 ASSESSMENT YEAR 2001-02 3 (D) THE AGRICULTURAL INCOME DECLARED BY THE ASSESSE E IN THE PRECEDING YEARS, WHICH ARE LISTED BELOW, HAVE BEEN ACCEPTED BY THE AO IN THE SCRUTINY ASSESSMENT. RS. 11,40,022 IN A.Y. 1993-94 RS. 25,70,952 IN A.Y. 1994-95 RS, 46,57,100 IN A.Y. 1995-96 RS. 77,94,368 IN A.Y. 1996-97 RS. 81,03,045/- IN A.Y. 1997-98 RS. 84,65,643/- IN A.Y. 1998-99 RS. 84,34,198 IN A.Y. 1999-2000 THE LD. CIT (A) HAS ALSO NOTICED THAT THE AO HAS NO T OFFERED OPPORTUNITY TO CROSS EXAMINE THE EMPLOYEES, ON WHOSE STATEMENTS HE HAD PLACED RELIANCE. THUS, ON A CONSPECTUS OF THE MATTER, THE LD. CIT(A) CONSIDERED THAT THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE WAS RE ASONABLE AND ACCORDINGLY DELETED THE ADDITION MADE BY THE AO WITH A DIRECTIO N THAT THE SAME SHOULD BE TREATED AS AGRICULTURAL INCOME OF THE ASSESSEE. 5. HOWEVER, IN OUR VIEW, THE LD CIT(A) DID NOT CONS IDER CERTAIN IMPORTANT POINTS WHICH ARE LISTED BELOW:- (A) THE SELLING RATE DECLARED BY THE ASSESSEE IS S UPPORTED BY HIS OWN BILLS AND HE DID NOT FURNISH ANY OTHER CORROBORATIV E EVIDENCE IN SUPPORT OF THE SAID SELLING RATE. THOUGH THE AVERAG E RATE OF GRAPE SALES WAS DECLARED AT RS.21/- PER KG, THE ASSESSEE HAS SH OWN SALES RATE IN THE RANGE OF RS.15/- PER KG TO RS.39.78 PER KG. H OWEVER THE HIGHEST SALES RATE QUOTED BY THE OUTSIDE AGENCIES, WHICH WE RE COLLECTED BY THE AO, WAS ONLY RS.20/- (PAGE 11 OF THE ASSESSMENT ORD ER). (B) THE ASSESSEE HAS FURNISHED CERTIFICATE FROM A FARM GATE INSPECTOR AND IT IS NOT SHOWN THAT THE SAID INSPECTOR IS COMP ETENT ENOUGH TO FURNISH SUCH CERTIFICATES. (C) THE AO HAS LISTED OUT THE DETAILS OF SOME OF THE S ALES BILLS IN PAGES 11 TO 14 OF HIS ORDER. ACCORDING TO THE ASSE SSEE, HE IS CONVERTING THE GREEN GRAPES ONLY INTO KISMISS. THE SHARAD ITA NO.354/AHD/2008 ASSESSMENT YEAR 2001-02 4 VARIETY OF GRAPES IS BLACK GRAPES AND THEY WERE CLA IMED TO HAVE BEEN SOLD AS IT IS. THE SELLING RATE OF SAID VARIE TY IS SHOWN IN THE RANGE OF RS.77.50 TO RS.93 PER KG., AS AGAINST RS.1 5/- STATED BY APMC. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE A CCOUNTS MAINTAINED BY THE ASSESSEE FOR AGRICULTURAL ACTIVITIES SUFFER FROM CE RTAIN DEFECTS. ACCORDINGLY, IN OUR VIEW, THE AGRICULTURAL INCOME DECLARED BY TH E ASSESSEE DESERVES REDUCTION. ON A CONSPECTUS OF THE MATTER, WE ARE O F THE VIEW THAT THE AGRICULTURAL INCOME DERIVED FROM GRAPES MAY BE REDU CED BY RS.8.00 LAKHS TO TAKE CARE OF THE DEFECTS AND IN OUR VIEW THE SAME W OULD MEET THE ENDS OF JUSTICE. WE MODIFY THE ORDER OF LD CIT(A) ACCORDIN GLY AND THE AO IS DIRECTED TO CONSIDER RS.8.00 LAKHS AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES OUT OF THE AGRICULTURAL INCOME DECLA RED BY THE ASSESSEE. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON SD/- SD/- (G.C.GUPTA) (B.R.BASKARAN) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-IV, BARODA. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO.354/AHD/2008 ASSESSMENT YEAR 2001-02 5 1.DATE OF DICTATION 23 - 01 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 23 /01 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 23 - 01 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 25 - 01 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 25 - 01 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25- 01 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..