Shri Ramanbhai P.Patel, Surat V. The Income tax Officer,Ward-9(3), Surat

ITA 3557/AHD/2008

• Counselvise Citation: 355720514 RSA 2008
• Duration Of Justice: 3 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-02-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 27-10-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Principle of natural justice
• Section: 143(3); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT , JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.3557 / AHD/2008 (ASSESSMENT YEAR 2005-06) RAMANBHAI P PATEL, 5, MARUTI INDUSIAL ESTATE, GAJJAR COMPOUND, KAPODARA, VARACHHA ROAD, SURAT VS. ITO, WARD 9(3), SURAT PAN/GIR NO. : ABRPP3756G (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI HARDIK VORA, AR RESPONDENT BY: SHRI SAMIR TEKRIWAL, SR. DR DATE OF HEARING: 01.02.2012 DATE OF PRONOUNCEMENT: 09.02.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) V, SURAT DATED 14.08.2008 FOR THE ASSESSMENT YEAR 2005-06. 2. GROUNDS 1 & 2 ARE INTERCONNECTED, WHICH ARE AS U NDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED CIT (APPEALS) HAS ERRED IN CON FIRMING THE ACTION OF THE ASSESSING OFFICER IN REJECTING BOOKS OF ACCOUNTS U/S. 145(3) OF THE ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED CIT (APPEALS) HAS ERRED IN PARTLY CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN M AKING ADDITION OF RS. 17,09,873/- OUT OF ADDITION OF RS. 22,09,873 /- ON ACCOUNT OF ALLEGED LOW GROSS PROFIT. I.T.A.NO. 3557 /AHD/2008 2 3. THE BRIEF FACTS OF THIS ISSUE TILL THE ASSESSMEN T STAGE ARE NOTED BY LD. CIT(A) ON PAGE 2 OF HIS ORDER AND THE RELEVANT PARA OF HIS ORDER IS REPRODUCED BELOW: THE FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL ENGAGED IN-THE BUSINESS OF MANUFACTURING OF ART SIL K CLOTH. FOR THE YEAR UNDER CONSIDERATION G.P RATIO HAS REDUCED TO 1 0.37% ON TURNOVER OF RS, 2,29,71,652/- FROM 20.37% ON TURNOV ER OF RS. 65,51,090/- FOR THE PRECEDING YEAR. THE ASSESSING O FFICER OBSERVED THAT QUANTITATIVE DETAILS FURNISHED BY ASSESSEE IS NOT VERIFIABLE AS ASSESSEE HAS NOT MAINTAINED DAY TO DAY STOCK REGIS TER / PRODUCTION REGISTER. HE ALSO OBSERVED THAT ASSESSEE SHOWED LAB OUR CHARGES IN INCREASING MANNER EVERY MONTH. IT WAS FURTHER OBSER VED THAT ASSESSEE HAS ALSO FAILED TO EXPLAIN THE QUALITY OF CLOTH WHICH HAS BEEN PRODUCED DURING THE YEAR UNDER CONSIDERATION. HE OBSERVED THAT NORMAL PRODUCTION OF GREY CLOTH WOULD BE 60 MT RS. PER DAY PER LOOM & IF THIS AVERAGE IS TAKEN FOR 25 WORKING DAYS IN A MONTH, THE TOTAL PRODUCTION SHOULD BE OF 17,28,000 METERS. HE OBSERVED THAT AS AGAINST THIS ASSESSEE HAS SHOWN PRODUCTION OF ON LY 14,83,617 METERS & THUS, THERE IS SUPPRESSION OF PRODUCTION O F 2,44,383 METERS. ON THE BASIS OF THESE OBSERVATIONS, ASSESSI NG OFFICER REJECTED BOOK RESULTS BY INVOKING PROVISIONS OF SEC TION 145 OF THE ACT. AFTER REJECTING BOOK RESULTS HE APPLIED G.P RA TE OF 20% ON TURNOVER FOR THE YEAR UNDER CONSIDERATION. & ACCORD INGLY HE MADE ADDITION OF RS. 22,09,873/- ON ACCOUNT OF LOW G.P. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A). IT WAS HELD BY LD. CIT(A) THAT THE A.O . WAS JUSTIFIED TO REJECT THE BOOK RESULTS ON THIS BASIS THAT THE ASSE SSEE HAS NOT MAINTAINED THE QUANTITY WISE DETAILS OF STOCK AND THAT VARIATI ON IN RATES OF LABOUR CHARGES ON MONTHLY BASIS IS NOT VERIFIABLE. REGARD ING QUANTUM OF GP ADDITION MADE BY THE A.O., LD. CIT(A) ALLOWED AN AD -HOC RELIEF OF RS.5 LACS AND CONFIRMED THE BALANCE ADDITION OF RS.17,09 ,873/- OUT OF THE TOTAL ADDITION MADE BY THE A.O. OF RS.22,09,873/-. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. I.T.A.NO. 3557 /AHD/2008 3 5. IT IS SUBMITTED BY THE LD. A.R. BEFORE US THAT T HE ASSESSEE IS A MANUFACTURER OF ART SILK CLOTH. HE ALSO SUBMITTED THAT ON PAGE NO.19 OF THE PAPER BOOK, THERE IS A COMPARATIVE CHART OF THE TURNOVER AND GP RATIO FOR HE ASSESSMENT YEARS 2001-02 TO 2008-09. HE FUR THER SUBMITTED THAT AS PER THIS CHART, IT CAN BE SEEN THAT GP RATE WAS ABN ORMALLY HIGH IN THE PRECEDING YEAR I.E. ASSESSMENT YEAR 2004-05 TO THE EXTENT OF20.36% WHEREAS IN ALL THE EARLIER YEARS, THE MAXIMUM GP RA TE WAS 6.13% ONLY AND IN THE SUBSEQUENT THREE YEARS ALSO, THE GP RATE IS MAXIMUM 10.55% ONLY WHEREAS IN THE PRESENT YEAR, THE GP RATE DECLA RED BY THE ASSESSEE IS 10.38%. HE ALSO SUBMITTED THAT IN ASSESSMENT YEAR 2001-02, 2002-03 AND 2006-07, THE ASSESSMENT WAS COMPLETED BY THE A.O. U /S 143(3) AND THE COPIES OF THESE THREE ASSESSMENT ORDERS ARE AVAILAB LE ON PAGES 39-47 OF THE PAPER BOOK. HE SUBMITTED THAT IN ASSESSMENT YE AR 2001-02, GP RATE DECLARED BY THE ASSESSEE WAS ONLY 3.80% AND THE SAM E WAS DULY ACCEPTED BY THE A.O. IN THE SCRUTINY ASSESSMENT ORDER. SIMI LARLY, IN ASSESSMENT YEAR 2002-30, GP RATE DECLARED BY THE ASSESSEE @ 3. 5% ONLY AND THE SAME WAS ALSO ACCEPTED BY THE A.O. AND ONLY MARGINA L ADDITION OF RS.40,000/- WAS MADE IN THAT YEAR AGAINST THE TURNO VER OFRS.125.50 LACS IN THAT YEAR. HE ALSO SUBMITTED THAT IN ASSESSMENT YEAR 2006-07, THE SUBSEQUENT YEAR, THE ASSESSEE HAS DECLARED GP RATE @ 8.74% AND THE SAME WAS ACCEPTED BY THE A.O. AND ONLY A MARGINAL A DDITION OF RS.40,000/- WAS MADE IN THAT YEAR AS AGAINST THE TU RNOVER OF RS.222.19 LACS. HE FURTHER SUBMITTED THAT DAY TO DAY QUANTIT ATIVE DETAILS WERE NOT MAINTAINED BY THE ASSESSEE, BUT MONTHLY QUANTITATIV E SUMMARY ARE AVAILABLE ON PAGES 17-18 OF THE PAPER BOOK AND NO M ISTAKE HAS BEEN POINTED OUT BY THE A.O. IN THESE QUANTITATIVE DETAI LS WHICH CAN BE VERIFIED FROM PURCHASE AND SALE BILLS REGARDING PURCHASE OF RAW MATERIAL AND SALES OF FINISHED GOODS. REGARDING THE YIELD, HE SUBMITT ED THAT THIS IS NOT THE I.T.A.NO. 3557 /AHD/2008 4 CASE OF THE A.O. THAT THE YIELD OF THE ASSESSEE IS LOW OR THAT ANY EXCESS PURCHASE PRICE WAS PAID OR ANY LOW SALE PRICE WAS D ECLARED AND HENCE, MERELY ON THIS BASIS THAT DAY TO DAY QUANTITATIVE R ECORDS WERE NOT MAINTAINED, REJECTION OF BOOKS OF ACCOUNT AND ADOPT ION OF HIGHER GP RATE IS NOT JUSTIFIED. 6. LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NEITHER MAINTAINED ANY PRODUCTION REGISTER NOR STOCK REGISTER AND HENCE, R EJECTION OF BOOKS OF ACCOUNT IS JUSTIFIED. HE STRONGLY SUPPORTED THE OR DERS OF AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE LD. CIT(A) BY MAKING FOLLOWING OBSERVATIONS ON PAGES 3 & 4 OF HIS ORDER AND THE RE LEVANT PARA OF HIS ORDER ARE REPRODUCED BELOW: I HAVE CAREFULLY CONSIDERED THE CONTENTION OF ASSE SSING OFFICER SC ALSO THE APPELLANT. AFTER CAREFULLY ANALYZING THE F ACTS OF THE CASE, I AM OF THE CONSIDERED OPINION THAT ASSESSING OFFICER IS JUSTIFIED IN REJECTING THE BOOK RESULTS U/S 145 OF THE ACT SINCE , ASSESSEE HAS NOT PRODUCED ANY STOCK REGISTER DURING THE COURSE OF AP PELLATE PROCEEDINGS. IT IS ALSO SEEN THAT ASSESSEE HAS NOT MAINTAINED ANY QUALITY WISE DETAILS OF STOCK & THUS, VARIATION IN RATE OF LABOUR CHARGES ON MONTHLY BASIS IS NOT VERIFIABLE. HOWEVER , I ALSO FIND FORCE IN THE ARGUMENT OF LEARNED AR THAT SUPPRESSIO N OF PRODUCTION OF 2,44,383 METERS IS NOT CORRECT AS IN REALITY MAC HINES NEVER WORK AT 100% CAPACITY OWING TO VARIOUS FACTORS VIZ. MARK ET DEMAND, SUPPLY OF ELECTRICITY, MACHINERY MAINTENANCE ETC. T HE AVERAGE PRODUCTION SHOWN BY ASSESSEE COMES TO 51 METERS PER DAY. FURTHER, I ALSO FIND THAT TURNOVER FOR THE YEAR UNDER CONSID ERATION HAS SIGNIFICANTLY INCREASED TO RS. 2,29,71,652/- FROM R S. 65,51,090/- IN PRECEDING YEAR & IMPACT ON PROFITABILITY IN TERMS O F PERCENTAGE, CANNOT BE RULED OUT. IT IS ALSO TO BE NOTED HERE TH AT ASSESSEE IS ALSO NOT IN A POSITION TO JUSTIFY ITS BOOK RESULTS IN AB SENCE OF DAY TO DAY STOCK REGISTER AS ALSO QUALITY WISE DETAILS. THUS, VARIATION IN MONTH I.T.A.NO. 3557 /AHD/2008 5 WISE RATE OF LABOUR CHARGES ALSO REMAINS UNVERIFIAB LE & AS SUCH DRASTIC FALL IN G.P RATE ALSO DOES NOT STAND PROPER LY EXPLAINED. AFTER CONSIDERING THE TOTALITY OF THE FACTS & CIRCU MSTANCES OF THE * CASE & GIVING DUE CONSIDERATION TO THE FACT THAT TH ERE IS SIGNIFICANT INCREASE IN TURNOVER, I FIND THAT IT WILL BE IN THE INTEREST OF NATURAL JUSTICE, EQUITY & FAIR PLAY TO GIVE A RELIEF OF RS 5,00,000/-. AS SUCH, BALANCE ADDITION IS CONFIRMED. 8. WE FIND THAT IT IS OBSERVED BY THE A.O. ON PAGE 3 OF THE ASSESSMENT ORDER THAT THE QUANTITATIVE DETAILS SUBMITTED BY TH E ASSESSEE ARE NOT VERIFIABLE WITH THE BOOKS OF ACCOUNT PRODUCED BY TH E ASSESSEE BECAUSE THE ASSESSEE HAS NOT MAINTAINED STOCK REGISTER AND PROD UCTION REGISTER. HE FURTHER OBSERVED THAT THE ASSESSEE HAS FURNISHED QU ANTITATIVE DETAILS AS PER SWEET WILL. WE FAIL TO UNDERSTAND THE BASIS OF THI S OBSERVATION OF THE A.O. BECAUSE QUANTITATIVE DETAILS IS NOTHING BUT OPENING STOCK + PURCHASE OF RAW MATERIAL AND CONSUMPTION AND CLOSING STOCK AND SIMILARLY FOR FINISHED GOODS, QUANTITATIVE DETAILS ARE OF OPENING STOCK + PRODUCTION LESS SALES AND CLOSING STOCK. THE QUANTITY OF PURCHASE OF RAW MATERIAL AND SALES OF FINISHED GOODS CAN BE EASILY VERIFIED FROM THE BILLS ACCOUNTED FOR BY THE ASSESSEE IN RESPECT OF PURCHASE AND SALES AN D THIS IS NOT THE CASE OF THE A.O. THAT ANY PURCHASE IS ACCOUNTED FOR BY THE ASSESSEE WITHOUT INCLUDING THE QUANTITY THERETO IN THE QUANTITATIVE DETAILS OR ANY SALE IS NOT ACCOUNTED FOR BY THE ASSESSEE ALTHOUGH ITS QUANTITY IS CONSIDERED IN THE QUANTITATIVE DETAILS AS SALES. - THE 2 ND OBJECTION OF THE A.O. IS THAT THE ASSESSEE HAS SUP PRESSED PRODUCTION TO THE EXTENT OF 244383 MTRS AND THIS OB JECTION IS ON THE BASIS THAT IN THIS LINE OF BUSINESS, THERE SHOULD BE 60 M TRS/DAY/LOOM AND FOR 25 DAYS IN A MONTH AND 300 DAYS IN A YEAR, ON THE BASI S THAT THE ASSESSEE IS HAVING 96 LOOMS, THE TOTAL PRODUCTION IN THIS YEAR SHOULD BE 17.28 LACS MTRS. BUT THE ASSESSEE HAS SHOWN TOTAL PRODUCTION O F ONLY 14.84 MTRS AND THEREFORE THE ASSESSEE HAS SUPPRESSED THE PRODUCTIO N OF 2.44 LACS MTRS. I.T.A.NO. 3557 /AHD/2008 6 THIS IS VERY ARBITRARY MANNER OF MAKING ALLEGATION OF SUPPRESSION OF PRODUCTION BECAUSE THIS HAS TO BE ACCEPTED THAT IN NO INDUSTRY, THE PRODUCTION CAN BE AT 100%. THERE ARE MANY FACTORS DUE TO WHICH ACTUAL PRODUCTION IS LESS THAN THE INSTALLED CAPACITY SUCH AS BREAKDOWN OF SOME MACHINERY, POWER CUT, SHORTAGE OF RAW MATERIAL, SHO RTAGE OF DEMAND AND SHORTAGE OF WORKERS ETC. AND HENCE, MERELY ON THE B ASIS OF INSTALLED CAPACITY OF AN INDUSTRY AND ITS ACTUAL PRODUCTION, IT CANNOT BE ALLEGED THAT THERE IS SUPPRESSION OF PRODUCTION WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORD. - THE 3 RD ALLEGATION OF THE A.O. IS THAT RATES OF LABOUR CHA RGES ARE INCREASING EVERY MONTH. THE A.O. OBSERVED THAT IN THE MONTH OF APRIL, RATE WAS 1.01 WHICH HAS GONE TO 1.86 IN THE MONTH O F NOVEMBER. HE ALSO OBSERVED THAT THE EMPLOYER INCREASED THE RATE OF LA BOUR CHARGES ONCE IN A YEAR IN THE TEXTILE INDUSTRY AND SINCE IN THE PRESE NT CASE, RATES OF LABOUR CHARGES ARE INCREASING EVERY MONTH, IT HAS TO BE AC CEPTED THAT EXTRA LABOUR CHARGES WERE PAID FOR EXTRA PRODUCTION WHICH WERE N OT ACCOUNTED FOR. WE FIND THAT THIS ALLEGATION OF THE A.O. IS ALSO WI THOUT ANY VALID BASIS BECAUSE THE RATES SHOWN BY HIM IS THE RATE OF WAGES PAID PER MTR OF GREY CLOTH OF PRODUCTION AND IF THIS BE SO, HOW IT CAN B E ALLEGED THAT EXTRA LABOUR CHARGES WERE PAID FOR EXTRA PRODUCTION WHICH WAS NOT ACCOUNTED FOR. WE DO NOT FIND ANY BASIS REGARDING THIS OBSER VATION OF THE A.O. THAT THE EMPLOYER INCREASES THE RATE OF LABOUR CHARGES O NCE IN A YEAR IN TEXTILE INDUSTRY. IN THE PRESENT CASE, THE SALE OF ASSESSE E HAS GONE UP FROMRS.65.51 LACS IN THE PRECEDING YEAR TO RS.229.7 LACS IN THE PRESENT YEAR AND HENCE, THE INCREASE IN PRODUCTION IS ALMOS T 3.5 TIMES AND, THEREFORE, MUCH MORE LABOUR ARE REQUIRED FOR CARRYI NG OUT THIS SCALE OF PRODUCTION AND IN THAT SITUATION, IT IS NOT ABNORMA L THAT THE RATE OF LABOUR CHARGES WERE REQUIRED TO BE INCREASED FOR ATTRACTIN G MORE LABOUR. IT IS I.T.A.NO. 3557 /AHD/2008 7 ALSO AN EXPLANATION OF THE ASSESSEE THAT THE QUALIT Y IS DIFFERENT IN EACH MONTH FOR WHICH RATE OF LABOUR CHARGES VARIES. THI S EXPLANATION WAS NOT PROVED WRONG. THEREFORE, SIMPLY ON THIS BASIS THAT THE RATES OF LABOUR CHARGES ARE INCREASING EVERY MONTH, IT CANNOT BE CO NCLUDED THAT THE BOOKS ARE NOT RELIABLE. THIS CAN BE ONE OF THE REASONS T O EXAMINE THE CORRECTNESS OF THE BOOKS OF ACCOUNT BUT THIS ALONE CANNOT BE A BASIS TO REJECT THE BOOK RESULTS AND THAT TOO WITHOUT EXAMIN ING THE CONCERNED WORKERS TO FIND OUT AS TO WHETHER THE RATES WERE IN CREASED OR NOT AS HAS BEEN CLAIMED BY THE ASSESSEE. UNDER THESE FACTS, W E FIND THAT THERE IS NO VALID BASIS FOR REJECTING THE BOOK RESULTS. MOREOV ER, THE GP RATE DECLARED BY THE ASSESSEE IS LOWER AS COMPARED TO THE IMMEDIA TELY PRECEDING YEAR BUT IF WE CONSIDER THE GP RATE OF EARLIER FOUR YEAR S AND THE SUBSEQUENT THREE YEARS, WE FIND THAT ON THE BASIS OF GP RATE O F THESE EIGHT YEARS, INSTEAD OF ALLEGING THAT THE GP RATE OF THE PRESENT YEAR IS LOW, IT COMES OUT THAT THE GP RATE OF THE PRECEDING YEAR WAS ABNORMAL LY HIGH. THERE MAY BE VARIOUS REASONS FOR A STEEP INCREASE OR STEEP FA LL IN THE GP RATE IN A PARTICULAR YEAR AND THEN, THE SAME CANNOT BE TAKEN TO BE A BASIS FOR ALL THE PERIOD TO COME. IF WE TAKE THE GP RATE OF THE PREC EDING THREE YEAS, WE FIND THAT IT COMES TO 10% WHEREAS THE ASSESSEE HAS DECLARED 10.38% IN THE PRESENT YEAR. SIMILARLY, IF WE TAKE GP RATE OF THE SUBSEQUENT THREE YEARS, WE FIND THAT THE SAME COMES TO BELOW 10%. I N ASSESSMENT YEAR 2001-02 AND 2002-03, THE A.O. HAS ACCEPTED THE GP R ATE @ 3.80% AND IN ASSESSMENT YEAR 2006-07 I.E. THE SUBSEQUENT YEAR, T HE A.O. HAS ACCEPTED THE GP RATE @ 8.74% AND THIS IS NOT THE CASE OF THE A.O. THAT IN ASSESSMENT YEAR 2001-02, 2002-03 AND 2006-07 THE AS SESSEE WAS MAINTAINING DAY TO DAY QUANTITATIVE DETAIL. CONSID ERING ALL THESE FACTS, WE FEEL THAT THE GP RATE DECLARED BY THE ASSESSEE IS R EASONABLE AND HENCE, NO I.T.A.NO. 3557 /AHD/2008 8 ADDITION IS CALLED FOR. IN THE RESULT, GROUNDS NO. 1 & 2 OF THE ASSESSEE ARE ALLOWED. 9. GROUND NO.3 IS AS UNDER: 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING AGRICUL TURE INCOME OF RS. 61,245/- AS INCOME FROM OTHER SOURCES. 10. THE FACTS OF THIS ISSUE ARE NOTED BY LD. CIT(A) IN PARA 4 OF HIS ORDER WHICH IS REPRODUCED BELOW:- THE NEXT GROUND OF APPEAL RELATES TO TREATMENT OF AGRICULTURAL INCOME OF RS. 61,245/- AS INCOME FROM OTHER SOURCES . THE ASSESSING OFFICER HAS NOT ACCEPTED THE GENUINENESS OF AGRICULTURAL INCOME, AS ASSESSEE COULD NOT FURNISH ANY SALE BILL S OF AGRICULTURAL PRODUCE. DURING THE APPELLATE PROCEEDINGS, IT HAS B EEN ARGUED THAT ASSESSEE HAS FURNISHED COPY OF 7/12 & 8A & DETAILS RELATING TO CULTIVATION OF CROP ARE GIVEN IN THE SAME & THUS, A GRICULTURAL INCOME OUGHT TO HAVE BEEN ACCEPTED AS GENUINE. 11. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE CIT(A) BUT WITHOUT SUCCESS AND NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 12. IT IS SUBMITTED BY THE LD. A.R. THAT IN ASSESSM ENT YEAR 2006-07, THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME OF RS.54, 990/- AND THE SAME WAS ACCEPTED BY THE A.O. IN THIS YEAR IN THE COURSE OF SCRUTINY ASSESSMENT. HE SUBMITTED THAT WHEN THE AGRICULTURA L INCOME IS ACCEPTED BY THE A.O. IN THE SUBSEQUENT YEAR TO THE EXTENT OF RS.54,990/-, THERE IS NOTHING ABNORMAL IN THE PRESENT YEAR CLAIM OF THE A SSESSEE REGARDING AGRICULTURAL INCOME OF RS.61,245/-. AS AGAINST THI S, IT IS SUBMITTED BY THE LD. D.R. THAT IN THE PRESENT YEAR, THE ASSESSEE HAS NOT FURNISHED THE BILLS FOR SALE OF AGRICULTURAL PRODUCE BEFORE THE A.O. OR BEFORE LD. CIT(A) AND IN ASSESSMENT YEAR 2006-07, THE ASSESSEE MIGHT HAVE FURNISHED SALE BILLS I.T.A.NO. 3557 /AHD/2008 9 AND THEREFORE, THE ASSESSEES CLAIM IN THE SUBSEQUE NT YEAR CANNOT BE A BASIS FOR ACCEPTING THE CLAIM OF THE ASSESSEE IN TH E PRESENT YEAR. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE ONE THROUGH THE ORDERS OF AUTHORITI ES BELOW. WE FIND THAT THE ONLY BASIS OF REJECTING THE CLAIM OF THE ASSESS EE REGARDING AGRICULTURAL INCOME IS THAT THE ASSESSEE COULD NOT PRODUCE SALE BILLS OF AGRICULTURAL PRODUCE. HOWEVER, IT IS NOTED BY THE A.O. THAT THE ASSESSEE HAS FURNISHED COPY OF 7/12 AND 8A ALONG WITH AGRICULTURAL ACCOUNT . IT IS NOTED BY THE A.O. THAT THE ASSESSEE HAS SHOWN GROSS AGRICULTURAL INCOME OF RS.95,720/- AND NET AGRICULTURAL INCOME HAS BEEN DECLARED AT RS .61,245/-. WE FEEL THAT IN THE FACTS OF THE PRESENT CASE, AGRICULTURAL INCOME SHOULD BE ACCEPTED AT RS.50,000/-. WE ORDER ACCORDINGLY. T HIS GROUND OF THE ASSESSEE STANDS PARTLY ALLOWED. 14. GROUND NO.4 IS AS UNDER:- 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER NOT TELESCOPING ADD ITION ON ACCOUNT OF AGRICULTURE INCOME WITH ADDITION ON ACCOUNT OF L OW G.P. 15. IT WAS SUBMITTED BY THE LD. A.R. THAT THIS GROU ND IS ALTERNATIVE GROUND OF GROUND NO.2. SINCE WE HAVE ALREADY ALLOW ED GROUND NO.2 OF THE ASSESSEE, THIS ALTERNATIVE GROUND DOES NOT SURV IVE AND ACCORDINGLY, REJECTED. 16. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PA RTLY ALLOWED. 17. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP I.T.A.NO. 3557 /AHD/2008 10 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 2/2/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3/2/12.OTHER MEMBER 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 09/2 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.9/2 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09/02/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .