SHRI BHUPENDRA SINGH KHANDPURE, Khandwa V. THE ACIT CIRCLE, Khandwa

ITA 359/IND/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5664 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHMD JAVED
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI BHUPENDRA SINGH KHANDPURE P/O M/S. CENTRAL MOTORS, PANDHANA ROAD KHANDWA PAN:ATQPS2324C VS. ACIT CIRCLE KHANDWA / APPELLANT / RESPONDENT & ' / APPELLANT BY SHRI PRAKASH JAIN, CA )*& ' / RESPONDENT BY SHRI MOHMD. JAVED, SR. (DR) / DATE OF HEARING 21.09.2016 / DATE OF PRONOUNCEMENT 19.10.2016 / O R D E R PER O. P. MEENA, ACCOUTANT MEMEBR. 1. THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II , INDORE (HEREINAFTER REFERRED TO AS THE LD. CIT (A))DATED 3 0.01.2015. THIS . . ./ I.T.A. NO.359/IND/2015 $& & / ASSESSMENT YEAR:2010-11 I.T.A.NO. 359/IND/2015/A.Y.10-11/SH BHUPENDRA SINGH KHANDPURE PAGE 2 OF 5 APPEAL PERTAINS TO ASSESSMENT YEAR 2010-11. THIS AP PEAL ARISES OUT OF ASSESSMENT ORDER DTD. 01.03.2013 PASSED U/S. 143(3) OF INCOME TAX ACT, 1961 [HEREIN AFTER REFERRED TO AS ' THE ACT) BY THE ACIT KHANDWA [HEREINAFTER REFERRED TO AS THE AO] . 2. GROUND NO.1 IS GENERAL IN NATURE AND DOES NOT REQUI RE ADJUDICATION AND ALSO NOT PRESSED, HENCE, TREATED AS DISMISSED. 3. GROUND NO. 2 RELATES TO DISALLOWANCE OF RS. 2710/- U NDER SECTION 14A READ WITH RULE 8D, WHICH HAS BEEN NOT PRESSED, HE NCE, TREATED AS DISMISSED. 4. GROUND NO. 3 STATES THAT LD. CIT (A) HAD ERRED IN C ONFIRMING THE REDUCTION OF AGRICULTURAL INCOME FROM RS. 16,90,000 /- TO RS. 9,17,470/-AND AGRICULTURAL INCOME TREATED AS INCOME FROM OTHER SOURCES AT RS. 7,72,530/- WHICH IS WRONG , ILLEGAL AN D UNWARRANTED. 5. SUCCINCTLY, FACTS OF THE CASE ARE THAT THE ASSESSEE IS INDIVIDUAL, DERIVES AS SHARE INCOME FROM PARTNERSHIP FIRM AND A GRICULTURAL INCOME. THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME AT RS. 16,90,000/-THE AO FOUND FROM DETAILS THAT THE ASSES SEE HAS SOLD WHEAT AND SOYABEAN TO PRIVATE PERSON OUT OF MANDI @2 500/- AND RS. 3,500/- PER QUINTAL RESPECTIVELY, WHEREAS MAXIMU M SALE RATE AS PER MANDI RATE WAS RS. 1165/- AND RS. 2240/-RESPECT IVELY. THUS, I.T.A.NO. 359/IND/2015/A.Y.10-11/SH BHUPENDRA SINGH KHANDPURE PAGE 3 OF 5 THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS. 1, 15,560/- BY HIGHER SIDE AS PER WORKING GIVEN IN THE CHART IN THE ASSESSMENT ORDER. ACCORDINGLY, IT WAS DISALLOWED. THE AO FURTHER FOUND THAT THE ASSESSEE HAS MADE ON SPOT SALES OF RS. 9, 50,000/- FOR WHICH NO EVIDENCE FILED HENCE, IT WAS ALSO DISALLOWED. THUS TO TAL SALES DISALLOWED WORKED OUT AT RS. 10, 65,560/-. THE AO NOT ED THAT THE AVERAGE EXPENSES SHOWN BY THE ASSESSEE COMES 27.5% ON AGRICULTURAL EARNINGS. ACCORDINGLY, THE AO COMPUTED DISALLOWANCE OUT OF AGRICULTURAL INCOME AT RS. 7,72,530/- (10655 60-293030 BEING 27.5% EXPENSES) AND TREATED THE SAME AS INCOM E FROM OTHER SOURCES AND REDUCED THE AGRICULTURAL INCOME AT RS. 9,17,470/-. 6. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THE LD. CIT (A). THE LD. CIT (A) HAS CONFIRMED THE DISALLOWANCE BY OB SERVING THAT THE ASSESSEE HAS NOT CONTROVERTED THE FINDING OF TH E A.O. 7. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THIS TRIBUNAL. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ASSESSEE IS HOLDING 44 ACRES OF IRRIGATED AGRICULTU RAL LAND AND HOLDING OF FAMILY IS 133 ACRES AGRICULTURAL LAND. T HE ASSESSEE HAS SHOWN ON SPOT SALES OF VEGETABLES, WHEAT AND SOYABE AN ETC. AT RS. 9,50,000/- WHICH INCLUDED SALE TO AGRICULTURIST OF R S. 2,55,750/- . OUT OF WHICH, THE AO DISALLOWED RS. 1,15,560/- AND AL SO DISALLOWED I.T.A.NO. 359/IND/2015/A.Y.10-11/SH BHUPENDRA SINGH KHANDPURE PAGE 4 OF 5 RS.9,50,000/- ON SPOT SALES AGGREGATING TO RS. 10,6 5,560/- AND AFTER REDUCING 27.5% EXPENSES AT RS.2,93,030/- NET A GRICULTURAL INCOME OF RS.7,72,530/- WAS DISALLOWED. TRANSFER SUBM ITTED THAT AS PER AGRICULTURAL LAND HOLDING AGRICULTURAL INCOM E PER ACRES COMES TO RS.37,555/- WHICH IS REASONABLE CONSIDERIN G THE IRRIGATED LAND AND USE OF TRACTORS AND MACHINERY. HOWEVER, TH E MANDI BILLS ARE NOT AVAILABLE BUT THE ASSESSEE HAS FILED CONFIR MATION FOR AGRICULTURIST FOR THE SALE OF RS. 2,55,750/- BEFORE THE AO. IN SUPPORT OF HIS PROPOSITION THE LEARNED COUNSEL FOR THE ASSESSEE ALSO CITED SOME CASE LAWS VIZ: NEELAM PATNI 17 TTJ 135 (M P-IND) AND ANIL KUMAR PACHORI 18 TTJ108 (MP-JBL) WHEREIN AGRICU LTURAL INCOME SHOWN WAS ACCEPTED ON THE BASIS OF CONFIRMATIO N FILED BY THE ASSESSEE`S. 8. THE LD. SENIOR (DR) VEHEMENTLY SUPPORTED THE ORDER OF LOWER AUTHORITIES, AND SUBMITTED THAT NO BOOKS OF ACCOUNT S FOR AGRICULTURAL PRODUCE IS MAINTAINED AND INCOME IS BE ING SHOWN ON ESTIMATE BASIS. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE T HROUGH THE ORDERS OF THE LOWER AUTHORITIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS SHOWN AGR ICULTURAL INCOME SALES AT RS. 16,90,000/- WHICH INCLUDES RS. 9 ,50,000/- INCLUDING RS. 2,55,750/-BEING SALES OF WHEAT AND SOY ABEAN SHOWN I.T.A.NO. 359/IND/2015/A.Y.10-11/SH BHUPENDRA SINGH KHANDPURE PAGE 5 OF 5 AT HIGHER PRICE AS COMPARED TO MANDI SALES. THESE S ALES ARE IN THE NATURE OF ON SPOT SALES MADE EFFECTED OUTSIDE MANDI TO PRIVATE PARTIES. WE FIND THAT THE ASSESSEE HAS AGRICULTURAL LAND HOLDING AT 44 ACRES OF IRRIGATED AGRICULTURAL LAND. THE ASSESS EE HAS ALSO FILED CONFIRMATION OF PARTIES I.E. AGRICULTURIST, TO WHOM SALES WAS MADE. THEREFORE, CONSIDERING THE CIRCUMSTANCES AND IN ABS ENCE OF BOOKS OF ACCOUNTS IN RESPECT OF AGRICULTURAL PRODUCE BEIN G NOT MAINTAINED AND CASE LAWS AS RELIED ON BY THE ASSESSEE, IT WOULD BE REASONABLE TO ESTIMATE 30% OF THE SALES AMOUNTING TO RS. 9,50,0 00/- TO PRIVATE PARTIES AS NON-EXPLAINED AGRICULTURAL INCOME WHICH WO ULD BE WORKED OUT TO RS. 2,85,000/-. ACCORDINGLY, THE ADDIT ION OF RS. 2,85,000/- IS CONFIRMED AND THE BALANCE ADDITION OF RS. 4,87,530/- I.E. [ RS. 7,72,530- RS. 2,85,000] IS DELETED. THI S GROUND OF APPEAL IS THEREFORE, PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 11. THE ORDER PRONOUNCED IN THE OPEN COURT ON 19.10-2 016 SD/- ( . . ) (D.T.GARASIA) JUDICIAL MEMBER SD/- ( . . ) (O.P.MEENA) ACCOUNTANT MEMBER + / DATED : 19TH OCTOBER, 2016.OPM