Smt. Parul V. Sanghani, Baroda V. The Income tax Officer, Ward-5(3), Baroda

ITA 429/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1997 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 15-12-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 21-02-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: G S PATEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.429/AHD/2006 ASSESSMENT YEAR:2002-03 DATE OF HEARING:15.12.09 DRAF TED:17.12.09 SMT. PARUL V SANGHANI, 27, VALKUNTH, GOTRI ROAD, BARODA PAN NO.AJOPS781D V/S. INCOME TAX OFFICER, WARD-5(3), BARODA (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI G.S. PATEL, AR RESPONDENT BY:- SHRI C.K. MISHRA, SR.DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-V, BARODA IN APPEAL NO.CAB/V-15 0/2005-06 DATED 07-11-2005. THE ASSESSMENT WAS FRAMED BY THE ACIT(OSD), WARD-5 (3), BARODA U/S.143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) VIDE HIS ORDER DATED 22-03-2005 FOR THE ASSESSMENT YEAR 2002-03. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE DISALLOWANCE TO THE TUNE OF RS.50,87 0/- OUT OF THE TOTAL DISALLOWANCE OF RS.75,870/- MADE BY THE ASSESSING OFFICER. 3. AFTER HEARING THE RIVAL CONTENTIONS, WE FIND THA T THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PURCHASE & SALE OF BEARINGS. THE A SSESSEE CLAIMED THE DIRECT EXPENSES OF RS.75,870/- ON ACCOUNT OF TRANSPORTATIO N EXPENSES OF GOODS SOLD IN THE MONTH OF JANUARY, 02 AND SALES EFFECTED TO THE TUNE OF RS.5,64,547/-. WE FIND THAT THE ASSESSEE HAS FLOATED A SCHEME FOR CERTAIN PERIO D TO BEAR THE OUTWARD ITA NO.429/AHD/2006 A.Y. 2002-03 SMT. PARUL V SANGHANI V. ITO WD-5(3) BARODA PAGE 2 TRANSPORTATION EXPENSES AND THIS TRANSPORTATION EXP ENSES WAS CLAIMED ON THAT ACCOUNT. THE ASSESSING OFFICER MADE DISALLOWANCE OF THE ENTIRE EXPENSES ONLY ON THE BASIS THAT THE ASSESSEE COULD NOT JUSTIFY THE A BOVE EXPENSES. THE CIT(A) MADE ESTIMATE AND CONFIRMED THE DISALLOWANCE AT RS.50,87 0/- AND BALANCE RS.25,000/- WAS ALLOWED AS DEDUCTION. WE FIND THAT THE ASSESSE E HAS INCURRED THE EXPENSES AND REASONABLE DISALLOWANCE OF 15% OF THIS EXPENSE CAN BE MADE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE INCO ME AFTER DISALLOWING 15% OF THE DIRECT EXPENSES OF RS.75,870/-. THIS ISSUE OF THE A SSESSEES APPEAL IS PARTLY ALLOWED. 4. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AS REGARDS TO THE ORDER OF CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OF FICER IN TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.3 :- 3. THE HONBLE CIT APPEAL-V, BARODA HAD NOT CONSID ERED THE FACT THAT DUE TO NON-COMPLIANCE OF LEGAL FORMALITIES REGARDING TRANS FER OF AGRICULTURAL LAND IN QUESTION, HE SAID AGRICULTURAL LAND COULD NOT BE TR ANSFERRED IN THE ASSESSEES NAME. HOWEVER ASSESSEE IS HAVING CONCLUSIVE POSSESS ION OF LAND BY EXECUTING POSSESSION DEED OF HE LAND. MOREOVER COST OF LAND WAS ALSO GIVEN TO LANDLORD. THE EVIDENCE FOR PAYMENT OF COST OF LA ND WERE ALSO SUBMITTED TO ITO. 5. WE FIND THAT THERE BASIC QUESTION, WHETHER THE A SSESSEE HAS TAKEN LAND ON LEASE OR NOT, HAS NOT BEEN ANSWERED BY EITHER OF TH E LOWER AUTHORITIES AND THE ASSESSEE ALSO LED THE EVIDENCE TO PROVE THAT THE HE HAS TAKEN THE LAND ON LEASE AS CLAIMED BEFORE US. AS THE BASIC ISSUE OF LAND TAKE N ON LEASE HAS NOT BEEN ANSWERED, WE ARE UNABLE TO DECIDE THIS ISSUE. ACCO RDINGLY, WE FEEL THAT THIS ISSUE NEEDS RE-EXAMINATION AT THE LEVEL OF THE ASSESSING OFFICER, WHETHER THE ASSESSEE HAS TAKEN THE LAND ON LEASE OR NOT. IN CASE, IT IS FOUND THAT THE ASSESSEE HAS TAKEN LAND ON LEASE, THEN THE AO CAN MAKE FAIR ESTIMATE O F AGRICULTURAL INCOME. THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED PARTLY FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 23/12/2009 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SI NGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) ITA NO.429/AHD/2006 A.Y. 2002-03 SMT. PARUL V SANGHANI V. ITO WD-5(3) BARODA PAGE 3 AHMEDABAD, DATED : 23/12/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-V, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD