Laxmiben Rameshkumar Modi, Ahmedabad V. The Income Tax Officer, Ward-1(2)(3), Ahmedabad

ITA 404/AHD/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5670 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 16-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Income from undisclosed sources; Principle of natural justice; Additional evidence; Corroborative evidences
• Section: 143(3); 201; 143(2); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER LAXMIBEN RAMESHKUMAR MODI, B - 404/1, AKSHAR PARK, BESIDE MAHESHWARI SEVA SAMITI, SHAHIBAUG, AHMEDABAD - 380004 PAN: AGXPM9005G (APPELLANT) VS THE IT O , WARD - 1 (2)(3) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI RAJESH MEENA , SR. D . R. ASSESSEE BY: SHRI MEHUL K. PATEL, A.R. DATE OF HEARING : 01 - 11 - 2 018 DATE OF PRONOUNCEMENT : 29 - 11 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOU NTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2012 - 13 , ARI SES FROM ORDER OF THE CIT(A) - 10, AHMEDABAD DATED 11 - 07 - 2 016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS O F APPEAL: - 1. THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO OF TREATING THE AGRICULTURE INCOME OF THE APPELLANT TO THE EXTENT OF RS.9,15,980/ - OUT OF INCOME OF RS.9,65,980/ - AS INCOME FROM UNDISCLOSED SOURCES ON THE BASIS OF OBSERVATIO NS GIVEN IN THE APPELLATE ORDER WITHOUT PROPER CONSIDERATION AND APPRECIATION OF THE FACTS OF THE CASE. IN VIEW OF FACTS AND SUBMISSIONS FILED COUPLED WITH LEGAL POSITION, THE ID. CTT (A) OUGHT TO HAVE ALLOWED THE AGRICULTURE INCOME SHOWN BY THE APPELLANT IN HER RETURN - OF INCOME.. 1.1. THE ID. CIT(A) HAS ERRED IN OBSERVING THAT THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT IN SUPPORT OF THE AGRICULTURE INCOME ARE AN AFTERTHOUGHT AND THEREBY CONFIRMING I T A NO . 404 / A HD/2 0 17 A SS ESSMENT YEAR 2012 - 13 I.T.A NO. 40 4 /AHD/20 17 A.Y. 2012 - 13 PAGE NO LAXMIBEN RAMESHKUMAR MODI VS. IT O 2 THE ADDITION MADE BY THE AO. THE ID. AO AND THE CI T(A) HAVE FAILED TO APPRECIATE THE FACT THAT IN THE ASSESSMENT AND APPELLATE PROCEEDINGS, THE APPELLANT HAS FURNISHED SUFFICIENT MATERIAL/EVIDENCES WHICH PRIMA FACIE SUPPORTS THE GENUINENESS OF THE AGRICULTURE INCOME SHOWN BY HER IN THE RETURN OF INCOME. T HUS, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE ID. CIT (A) IS WHOLLY UNJUSTIFIED AND BAD IN LAW AND THUS REQUIRES TO BE DELETED. 1.2. THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RELYING ON THE REMAND REPORT FURNISHED BY THE AO WHICH WAS FILE D IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AND EQUITY FOR THE REASON THAT ON THE GIVEN DATE OF HEARING OF THE REMAND REPORT PROCEEDINGS I.E. ON 26/04/2016, THE APPELLANT DID FILE AN ADJOURNMENT LETTER WITH THE OFFICE OF THE AO SEEKING SOME FURTHER TIME AS IT WAS NOT CONVENIENT FOR THE PARTIES WHOSE LAND HAVE BEEN TAKEN ON LEASE/RENT BY THE APPELLANT FOR AGRICULTURE ACTIVITIES TO PERSONALLY APPEAR BEFORE THE AO IN RESPONSE TO SUMMONS ISSUED. THE ID. AO WHILE REFUSING THE ADJOURNMENT FURNISHED THE REMAND REPORT IMMEDIATELY ON THE VERY NEXT DATE I.E. ON 27/04/2016 WITHOUT CARRYING OUT PROPER ENQUIRIES AND GRANTING REASONABLE AND SUFFICIENT TIME TO THE APPELLANT. THE ADDITION THUS CONFIRMED BY THE ID. CIT(A) ON THE BASIS OF REMAND REPORT OF THE AO DESERVES T O BE DELETED. 1.3. THE ID. AO AND THE CIT(A) BOTH ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THE FACT THAT THE APPELLANT HAS SHOWN NET AGRICULTURE INCOME OF RS.8,36,350/ - IN THE RETURN OF INCOME FILED FOR THE YEAR IN QUESTION WHEREAS THE ADDITI ON HAS BEEN MADE FOR THE GROSS AGRICULTURE INCOME WITHOUT BRINGING ON RECORD ANY MATERIAL EVIDENCE TO SUBSTANTIATE THAT NO EXPENSES HAVE BEEN INCURRED FOR EARNING THE SAID INCOME. THE ADDITION MADE BY THE AO THUS DESERVES TO BE DELETED, THE SAME BEING EVEN OTHERWISE WHOLLY ILLOGICAL AS IT IS A MATTER OF COMMON SENSE THAT AGRICULTURE INCOME CANNOT BE EARNED WITHOUT INCURRING ANY EXPENSES. 2. THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE AO AMOUNTING TO RS.2,11,500/ - BEING THE ALLEGED UNEXPLAINED STAMP DUTY PAID FOR SANTEJ LAND ON THE BASIS OF OBSERVATIONS GIVEN IN THE APPELLATE ORDER WITHOUT PROPER CONSIDERATION AND APPRECIATION OF THE FACTS OF THE CASE. IN VIEW OF FACTS AND SUBMISSIONS FILED, THE IMPUGNED ADDITION MADE BY THE AO OUGHT TO HAVE BEEN DELETED. 2.1 THE ID. AO AND THE CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT SUCH STAMP DUTY HAS ALREADY BEEN DEBITED BY THE APPELLANT IN THE ACCOUNT OF SANTEJ LAND WITH EXPLANATION AND SUBMISSION FURNISHED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS. THUS THE IMPUGNED ADDITION MADE BY THE AO & CONFIRMED BY THE CIT(A) WITHOUT APPRECIATING THE SUBMISSIONS OF THE APPELLANT DESERVES TO BE DELETED. 3. GROUND NOS. 1 TO 1.3 ARE INTER - CONNECTED TO THE COMMON ISSUE TREATING THE INCOME DISCLO SED BY THE ASSESSEE FROM AGRICULTURE AS INCOME FROM UNDISCLOSED SOURCES, THEREFORE, FOR THE SAKE OF CONVENIENCE THESE GROUNDS OF APPEAL ADJUDICATED TOGETHER. 4. FURTHER THE GROUND NO. 2 TO 2.1 PERTAINED T O ADDITION OF RS. 2 ,11, 5 0 0/ - ON ACCOUNT OF UNEXPL A INED STAMP DUTY PAID FOR SANTEJ LAND ALSO ADJUDICATED ALONG WITH ABOVE GROUNDS OF APPEAL BEING CONNECTED MATTER. I.T.A NO. 40 4 /AHD/20 17 A.Y. 2012 - 13 PAGE NO LAXMIBEN RAMESHKUMAR MODI VS. IT O 3 5. THE BRIEF FACT OF THE CASE IS THAT THE ASSESSEE HAS FILED RETURN OF INCOME DECLARING INCOME OF RS. 10 , 22 , 350/ - ON 28 TH JAN, 2014. THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS. 9 , 13 , 024/ - . THEREAFTER , THE CASE WAS SELECTED UNDER SECURITY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 4 TH SEP, 2014. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSE SSEE HAS SHOWN NET AGRICULTURAL INCOME OF RS. 9 , 13 ,024 / - . ON VERIFICATION, THE ASSESSING OFFICER FOUND THAT ASSESSEE WAS HOLDING ONLY 0.62 HECTARES LAND ,THEREFORE, HE OBSERVED THAT ASSESSEE HA D HIGHLY INFLATED HER INCOME FROM AGRICULTURE AS SHE WAS HAVI NG VERY INADEQUATE AGRICULTURAL LAND . DU RING ASSESSMENT, THE ASSESSE HA D ALSO CLAIMED THAT S HE HA D TAKEN AGRICULTURAL LA ND ON RENT FROM RABRI ISHARBHAI LILABHAI. HOWEVER, THE ASSESSEE HAS FAILED TO SUBSTANTIATE H ER CLAIM OF TAKING AGRICULTURAL LAND ON RE NT WITH ANY R ELEVANT EVIDENCES. THEREFORE, THE ASSESSING OFFICER HAS TREATED AGR ICULTURAL INCOME OF RS. 9,13,024/ - AS INCOME FROM UNDISCLOSED SOURCES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 6. SECOND GROUND OF APPEAL PERTAINED TO THE PAYM ENT OF STAMP DUTY OF RS. 2 , 11 , 50 0 / - WHICH WAS TREATED AS UNEXPLAINED FOR WANT OF EVIDENCES. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS OBSERVED THAT ASSESSEE HAS PAID STAMP DUTY FOR SALTEJ LAND AT RS. 2 , 11 , 500/ - AND ASSESSEE H AS NOT DEBITED STAMP DUTY EXPENSES IN HIS LEDGER ACCOUNT, THEREFORE, THE SAME WAS ADDED TO HIS INCOME U/S. 69 OF THE ACT. 7. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE STATING THAT A SSESSEE COULD NOT PRODUCE ANY EVID ENCES WHATSOEVER EITHER BEFORE T H E ASSESSING OFFICER OR IN THE APPELLATE PROCEEDINGS BEFORE HIM TO PROVE THE GENUINENESS OF AGRICULTURAL INCOME. FURTHER HE HAS ALSO DISMISSED ASSESSEE S GROUND OF APPEAL AGAINST UNDISCLOS ED STAMP DUTY STATING THAT ASSESSEE HAS NOT DEBITED THE SAME IN THE LEDGER ACCOUNT. I.T.A NO. 40 4 /AHD/20 17 A.Y. 2012 - 13 PAGE NO LAXMIBEN RAMESHKUMAR MODI VS. IT O 4 8. W E HAVE HEARD TH E RIVA L CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSEE HAS SHOWN NET AGRICULTURAL INCOME TO THE AMOUNT OF RS.9,13,024 / FOR THE YEAR UNDER CONCENTRATION. IT IS UNDISPUTED FACT THAT LAND HOLDING OF THE ASSESSING WAS ONLY 0.61 HACTARE AT VILLAGE RAMOL, TALUKA. SUBSEQUENTLY THE ASSESSEE HAS CLAIMED THAT HE HAD TAKEN LAND ON RENT FROM RABARI ISHWARBHAI NILABHAI ,HOWEVE R, THE ASSESSEE HAS NOT SUBSTANTIATED HIS CLAIM OF TAKING LAND ON RENT WITH RELEVANT SUPPORTING EVIDENCES. THE ASSESSEE HAS ALSO FAILED TO DEMONSTRATE THE EARNING OF HUGE INCOME OF RS.9, 13024/ FROM TINY LAND HOLDING OF ONLY 0.61 HA. EVEN THE ASSESSEE HAS FAILED TO FURNISH THE SUPPORTING BILLS/VOUCHERS FOR UTILIZATION OF SEEDS AND OTHER CULTIVATION . THE ABOVE FACTS DEMONSTRATE THAT THE ASSESSEE HAS CLAIMED ABNORMALLY HIGH AMOUNT OF AGRICULTURAL INCOME FROM SMALL LANDHOLDING AND FAILED TO SUBSTAN TIATE HIS SUCH CLAIM WITH RELEVANT SUPPORTING MATERIAL. THE ASSESSEE HAS ALSO FAILED TO PROVE WITH RELEVANT EVIDENCES THAT ADDITIONAL LAND WAS TAKEN ON RENT ON WHICH THE AGRICULTURAL ACTIVITIES WERE CARRIED OUT. IN SPITE OF PROVIDING A NUMBER OF OPPORT UNITIES THE ASSESSEE HAS FAILED TO FURNISH EVEN THE BASIC PROOF AS RENT AGREEMENT TO PROVE THE GENUINENESS OF HER CLAIM OF TAKING 7 HA OF AGRICULTURAL LAND ON RENT. EVEN THE ASSESSING OFFICER HAS ISSUED S UMMON TO THE PERSON FROM WHOM THE ASSESSEE HAD CLA IMED THAT LAND WAS TAKEN ON RENT ,HOWEVER, NO COMPLIANCE WAS MADE. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES IT IS VERY CLEAR THAT ASSESSEE HAS FAILED TO SUBSTANTIATE THAT SUCH A HIGH INCOME CAN BE EARNED FROM THE LANDHOLDING OF 1/2 ACRE . HOWEVER WE OBSERVE THAT THE DECISION OF LEARNED COMMISSIONER OF INCOME TAX APPEAL TO DISALLOW THE ENTIRE AGRICULTURAL INCOME IS NOT JUSTIFIED. THEREFORE WE CONSIDER THAT IT WOULD BE REASONABLE TO ESTIMATE AGRICULTURAL INCOME TO THE AMOUNT OF RS.2,13,024 DURING THE YEAR UNDER CONSIDERATION FROM THE LANDHOLDING OF ONLY 0.61 HA. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. IN RESPECT OF OTHER GROUND OF APPEAL OF THE ASSESSEE RELATING TO ADDITION OF RUPEES 2,11,500 RELATING TO UNEXPLAINED STAMP D UTY PAID FOR SANTEJ LAND IT WAS I.T.A NO. 40 4 /AHD/20 17 A.Y. 2012 - 13 PAGE NO LAXMIBEN RAMESHKUMAR MODI VS. IT O 5 CONTENDED BY THE LEARNED COUNSEL THAT THE SOURCE OF PAYMENT OF STAMP DUTY MAY BE CONSIDERED OUT OF THE AGRICULTURAL INCOME EARNED BY THE ASSESSEE AND NO SEPARATE ADDITION TO BE MADE FOR THE SAME. ON THE OTHER HAND THE LEARN ED DR HAS RELIED UPON THE ORDER OF COMMISSIONER OF INCOME TAX APPEAL. WE CONSIDER THAT THE CONTENTION OF THE LEARNED COUNSEL IS JUSTIFIED THEREFORE WE ARE OF THE VIEW THAT NO SEPARATE ADDITION IS REQUIRED TO BE MADE IN RESPECT OF PAYMENT OF STAMP DUTY WHICH IS LESS THAN RS. 2 , 13 , 024. THEREFORE THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT , APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 29 - 11 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 29 /11 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,