Shri Ranjitbhai Vithalbhai Patel, Anand V. The Income tax Officer,Ward-3(4), Petlad

ITA 361/AHD/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6564 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 10-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y C SURTI
• Keywords: Income from undisclosed sources
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER I.T.A. NO. 361 AHD/2011 (ASSESSMENT YEAR 2004-05) RANJITBHAI VITTHALBHAI PATEL, AMBALIPURA, AT: ANKALAV DISTT. ANAND - 388510 VS. ITO, WARD 3(4), ANAND PAN/GIR NO. : AKSPP5883C (APPELLANT) .. (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI Y C SURTI, D.R. O R D E R THIS APPEAL BY THE ASSESSEE HAS BEEN PREFERRED AGA INST THE ORDER DATED 23.11.2010 OF CIT(A) IV, BARODA FOR THE ASSES SMENT YEAR 2004- 05. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1.THE LEARNED C.I.T(A)-IV, BARODA HAS ERRED IN TRE ATING AGRICULTURAL INCOME FROM SALE OF BANANAS OF RS. 1,5 1,602/- AS NON-AGRICULTURAL INCOME. THE SAME SHOULD BE TREATED AS AGRICULTURAL INCOME NOW. 2. WITHOUT PREJUDICE TO THE ABOVE, ALTERNATIVELY SI NCE THE GROSS SALE PROCEEDS OF BANANAS OF RS. 1,51,6027- IS TREAT ED AS INCOME, ONLY THE NET INCOME FROM SALE PROCEEDS SHOULD BE TR EATED AS TAXABLE INCOME AND NOT THE WHOLE SALE PROCEEDS. 3. THE LEARNED C.I.T(A)-IV, BARODA HAS ERRED IN TRE ATING AGRICULTURAL INCOME FROM SALE PROCEEDS OF TOBACC O OF RS. 1,05,617/- AS NON-AGRICULTURAL INCOME. THE SAME SHO ULD BE TREATED AS AGRICULTURAL INCOME NOW. 4. WITHOUT PREJUDICE TO THE ABOVE, ALTERNATIVELY SI NCE THE GROSS SALE PROCEEDS OF TOBACCO OF RS. 1,05,6171- IS TREAT ED AS INCOME, I.T.A.NO. 361/AHD/2011 2 ONLY THE NET INCOME FROM SALE PROCEEDS SHOULD BE TR EATED AS TAXABLE INCOME AND NOT THE WHOLE SALE PROCEEDS. 2. THE APPEAL HAS BEEN FILED LATE BY FOUR DAYS. CO NDONATION PETITION IS ON RECORD. AFTER GOING THROUGH THE COND ONATION PETITION AND HEARING LD. D.R., THE DELAY IN FILING THE APPEA L IS CONDONED AND WAS ADMITTED FOR HEARING. 3. DESPITE THE FACT THAT NOTICE FOR HEARING WAS SER VED UPON THE ASSESSEE, HE HAS CHOSEN NEITHER TO APPEAR NOR HAS F ILED ANY APPLICATION FOR ADJOURNMENT. THEREFORE, I PROCEEDED TO DECIDE THE APPEAL AFTER HARING THE LD. D.R. 4. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDING, THE A.O. OBSERVED THAT THE ASSESSEES L AND HOLDING WAS 1- 01-18 HECTARES ON WHICH TOBACCO (9880 KG SOLD FOR R S.2,11,432/-) AND BANANA (3568 KG. SOLD FOR RS.1,51,602/-) WERE CLAIM ED TO BE GROWN. THE A.O. REFERRED GOVERNMENT PUBLICATION OF THE DIR ECTORATE OF AGRICULTURE GUJARAT STATE, GANDHINAGAR AND THE PROD UCTIVITY OF IMPORTANT CROPS FOR THE YEAR 2003-04 AS PER WHICH M AXIMUM YIELD OF TOBACCO WAS 2111KG/HECTARE. THE A.O. WORKED OUT EX CESS SALE OF TOBACCO AT RS.1,65,807/- BY APPLYING YIELD AS PER D IRECTORATE OF AGRICULTURE GUJARAT STATE. FURTHER OBSERVATION OF THE A.O. WAS THAT IN ONE YEAR, CULTIVATION OF TWO CROPS I.E. BANANA AND TOBACCO ON THE SAME LAND WAS NOT POSSIBLE SINCE BANANA PRODUCTION REQUI RED 18 MONTHS AND TOBACCO REQUIRE 10 MONTHS. ALSO, BANANA REQUIRES M AXIMUM WATER WHILE TOBACCO NEEDS MINIMUM WATER. ASSESSEE SUBMIT TED BEFORE THE A.O. THAT BILLS OF EXPENDITURE AND BILLS OF SALE OF AGRICULTURAL PRODUCE WERE NOT AVAILABLE. ON INQUIRY, U/S 133(6) THE PAR TY M/S. P M PATEL & CO. TO WHOM TOBACCO WAS SHOWN TO HAVE BEEN SOLD, CO NFIRMED THE I.T.A.NO. 361/AHD/2011 3 TRANSACTION WHEREAS THE PARTY K. M. RAJ, BANANA MER CHANT DID NOT REPLY. THE A.O. MADE ADDITION OF RS.1,65,807/- IN RESPECT OF CULTIVATION OF TOBACCO AND RS.1,51,602/- IN RESPECT OF CULTIVATION OF BANANA BOTH AS INCOME FROM UNDISCLOSED SOURCES. THE A.O. MADE FURTHER ADDITION OF RS.24,678/- AS UNDISCLOSED INCO ME BY OBSERVING THAT THE ASSESSEE HAD CLAIMED EXPENSE @ 28.18% AS A CCEPTED NORM OF 35 - 40%. 5. BEFORE CIT(A), IT WAS SUBMITTED THAT THE ASSESSE E HOLDS 2.19 HECTARE OF LAND AND THE A.O. WRONGLY PUT THE SAME T O BE 1-01-18 HECTARES. ASSESSEE ALSO SUBMITTED THAT YIELD AS PE R ANNUAL PUBLICATION OF DIRECTORATE OF AGRICULTURE CANNOT BE TAKEN AS BE NCHMARK SINCE ACTUAL CROP PRODUCTION DEPENDS ON HOST OF FACTORS S UCH AS PRODUCTIVITY OF THE LAND, QUALITY OF INPUTS, AVAILABILITY OF WAT ER, QUALITY OF SEEDS AND FERTILIZERS ETC. ASSESSEE ALSO REFERRED TO THE CON FIRMATION BY M/S. P M PATEL & CO. FOR PURCHASING TOBACCO WORTH RS.2,11,43 2/- REGARDING INCOME FORM SALE OF BANANA, IT WAS SUBMITTED THAT M EMO EVIDENCE FOR SALE OF BANANA WERE DULY PRODUCED AT THE TIME OF AS SESSMENT PROCEEDINGS. AS PER THE ASSESSEE, A.O. MADE ADDITI ON OF RS.1,51,602/- ON THE GROUND THAT THE TRANSACTION WAS NOT ACCEPTED BY BANANA MERCHANT M/S. K M RAJ WITHOUT CARRYING OUT FURTHER INQUIRY IN THE MATTER. ASSESSEE FILED COPY OF ACKNOWLEDGEMENT BY THE BANANA MERCHANT. REGARDING THE A.O.S OBSERVATION THAT IT WAS NOT POSSIBLE TO TAKE TWO CROPS ON THE SAME LAND IN ONE YEAR, ASSESS EE SUBMITTED THAT TOBACCO BEING NON PERISHABLE CROP IS USUALLY HARVES TED IN THE MONTH OF DECEMBER AND JANUARY AND STOCKED TILL THE FARMER IS ABLE TO FETCH THE RIGHT PRICE. AS PER THE ASSESSEE, IT WAS NOT NECES SARY THAT THE TOBACCO SOLD DURING THE YEAR WAS HARVESTED IN THE SAME YEAR AND IT WAS THE I.T.A.NO. 361/AHD/2011 4 COMMON PRACTICE FOR FARMERS TO DRY THE TOBACCO AND KEEP IN STOCK FOR A PERIOD THAT MAY BE EXTENDED TO TWO YEARS. REGARDIN G ADDITION OF RS.24,678/- ON ACCOUNT OF ESTIMATION OF AGRICULTURA L EXPENDITURE ASSESSEES SUBMISSION WAS THAT THE A.O. MADE SURMIS ES AND CONJECTURES, IN THIS REGARD AND THE LOWER COST OF P RODUCTION IN ASSESSEES CASE WAS DUE TO ALL THE ADULTS AND FAMIL Y MEMBERS BEING EMPLOYED IN AGRICULTURE INCURRING LOWER COST. 6. LD. CIT(A) AFTER TAKING INTO CONSIDERATION THESE SUBMISSIONS OF THE ASSESSEE, PARTLY ALLOWED THE APPEAL BY OBSERVIN G AS UNDER: 4. I HAVE CONSIDERED APPELLANT'S SUBMISSIONS. 7/1 2 ABSTRACTS FILED BY THE APPELLANT RECORD CULTIVATION OF TOBACC O ONLY AND NOT BANANAS. ON POINTING THIS OUT TO THE A.R., HE DID NOT HAVE ANY EXPLANATION EXCEPT STATING THAT THE MAMLATDAR APPEA RS TO HAVE OMITTED CULTIVATION OF BANANAS AND THE RECORDS WERE PERHAPS FOR NEXT YEAR. THERE IS NO REASON TO PRESUME OMISSION O F BANANA CROP BY MAMLATDAR WHO HAS RECORDED TOBACCO AS THE ONLY C ROP GROWN. FURTHER, THERE IS MERIT IN AO'S OBSERVATIONS ABOUT CULTIVATION OF BANANA AND TOBACCO ON THE SAME LAND IN SAME PERIOD REQUIRING 10 MONTHS (TOBACCO) AND 18 MONTHS (BANANA), TOBACCO RE QUIRING MINIMUM WATER AND BANANA REQUIRING MAXIMUM WATER, E TC. AUTHORIZED .REPRESENTATIVE WAS ASKED WHETHER OTHER THAN SALE BILLS, ANY PROOF FOR CULTIVATING BANANAS WAS 'THERE , TO WHICH HE REPLIED IN NEGATIVE. SALE BILLS ALONE ARE NOT SUFFI CIENT PROOF FOR GENUINENESS OF AGRICULTURAL INCOME AND INDICATE TRA DING ONLY. ON ENQUIRY U/S.133(6), THE BANANA PURCHASING PARTY DID NOT CONFIRM THE PURCHASE. ASSESSMENT OF SALE PROCEEDS OF BANANA S OF RS.1,51,602/- AS INCOME FROM UNDISCLOSED SOURCES IS CONFIRMED. I.T.A.NO. 361/AHD/2011 5 4.1. IN RESPECT OF APPELLANT'S CONTENTION CHALLENGI NG APPLYING OF YIELD DATA AS PER SURVEY OF DIRECTORATE OF AGRICULT URE, GOVT. OF GUJARAT, IT IS NOTED THAT IN ITA NOS. 1662/AHD/2007 , 1772/AHD/2000 & 1773/AHD/2004 IN CASE OF FATIMABEN VORA, M/S. VYAS SHANTILAL JETHALAL & SONS AND MAHENDRA SHANTIL AL VYAS OF ANAND THROUGH ORDERS DATED 29.11.2004 ITAT, AHMEDAB AD UPHELD ESTIMATION OF AGRICULTURAL INCOME AS PER YIELD DATA OF DIRECTORATE OF AGRICULTURE, GOVERNMENT OF GUJARAT. APPELLANT'S CON TENTION IN THIS REGARD IS THEREFORE, NOT ACCEPTABLE. FURTHER, APPEL LANT HAS FILED 8A ABSTRACTS SHOWING LAND AREA OF 2-19-52 HECTARE, WHI CH ARE CLAIMED TO BE FILED BEFORE THE ASSESSING OFFICER ALSO. HOWE VER, THE LAND ADMEASURING 2-19-52 HECTARE IS JOINTLY OWNED BY THE APPELLANT AND THREE OTHER PERSONS, WHO ARE POSSIBLY HIS BROTHERS/ SISTERS. THE SALE BILL OF TOBACCO ISSUED BY M/S. P. M. PATEL FOR RS.2 ,11,432/- IS IN THE JOINT NAME OF APPELLANT AND SUMANBHAI VITTHALBHAI P ATEL. THUS, NEITHER LAND OF 2-19-52 HECTARES NOR SALE PROCEEDS OF RS.2,11,432/- BELONG TO APPELLANT ALONE. APPELLANT HAS CREDITED A GRICULTURAL INCOME OF RS.2,60,000/- TO HIS CAPITAL ACCOUNT FOR F. Y. 2003-04 AS NET AGRICULTURAL INCOME ARISING FROM AGRICULTURAL S ALE PROCEEDS INCLUDING FROM TOBACCO OF RS.2,11,432/-. BALANCE SH EET OF THE APPELLANT SHOWS INVESTMENT IN KISAN VIKAS PATRAS, F DR ETC., AGAINST CAPITAL BUILT UP FROM SUCH AGRICULTURAL INC OME. CREDIT CAN BE ALLOWED UP TO 50% OF AGRICULTURAL SALE PROCEEDS FROM TOBACCO, I.E. UP TO RS.1,05,716/-, BEING SHARE OF APPELLANT AND THE BALANCE CONTRIBUTION TO ASSETS IS TO BE TAKEN AS INCOME FRO M UNDISCLOSED SOURCES. INSTEAD OF ADDITION OF RS.1,65,807/, ADDIT ION IS SUSTAINED UP TO RS.1,05,617/- AND BALANCE IS DELETED. 7. SINCE THE ABOVE FINDING OF LD. CIT(A) REMAINED U NCONTROVERTED, I FIND NO NEED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS UPHELD. 8. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS DIS MISSED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JUNE, 2011. SD./- (D. K. TYAGI) JUDICIAL MEMBER AHMEDABAD; DATED :01 ST JUNE, 2011 SP I.T.A.NO. 361/AHD/2011 6 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 6. THE GUARD FILE 1. DATE OF DICTATION 2/6/11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2/6/11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 3/6/11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT ALREADY PRONOUNCED ON 1/6/11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 3/6/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3/6/11 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. ..