Ajit Rangrao Vichare, Ratnagiri V. Income-tax Officer, Ward - 2, Ratnagiri

ITA 439/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5828 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-01-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MAYURESH DOSHI
• Keywords: Income from undisclosed sources; Additional evidence
• Section: 143(1); 69; 148; 144

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.439/PUN/2018 / ASSESSMENT YEAR : 2012-13 AJIT RANGRAO VICHARE, A/P PALWADI WARWADE, DIST. RATNAGIRI. PAN : AEHPV0932K. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 2, RATNAGIRI. . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI MAYURESH DOSHI. REVENUE BY : SHRI RAJESH GAWALI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY ASSESSEE IS EMANATING OUT OF ORDE R OF COMMISSIONER OF INCOME-TAX (A) 2, KOLHAPUR DATED 09.01.20 18 FOR A.Y. 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL AND IS STATED TO BE HAVING INC OME FROM AGRICULTURE. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 20 12-13 ON 29.10.2012 DECLARING TOTAL TAXABLE INCOME AT RS. NIL AND AGRIC ULTURAL INCOME OF RS.19,40,000/-. THE RETURN WAS INITIALLY PROCESSE D U/S 143(1) OF THE ACT. THEREAFTER, NOTICE U/S 148 OF THE ACT DT .31.03.2016 / DATE OF HEARING : 03.04.2019 / DATE OF PRONOUNCEMENT: 16.04.2019 2 WAS ISSUED AND SERVED ON THE ASSESSEE. THEREAFTER, THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS FRAMED U/S 144 R.W .S. 147 OF THE ACT VIDE ORDER DT.27.12.2016 AND THE TOTAL INCOME WAS DE TERMINED AT RS.19,90,000/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CA RRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.09.01.2018 (IN AP PEAL NO.RTN/312/2016-17) GRANTED PARTIAL RELIEF TO THE ASSESS EE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US AND HAS RAISED TH E FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CIT (A) IS NOT JUSTIFIED IN SUSTAINING A DDITION OF RS.2,00,000/- BY TREATING PART OF AGRICULTURAL INCO ME AS INCOME FROM O THE R SOURCES W H E N T HE AGRIC ULT U RA L INCOME IS W I THIN THE PARAMETERS AS CERTIFIED BY GOVT. REGISTERED VALUER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD .CIT (A) IS NOT JUSTIFIED IN SUSTAINING ADDITION OF RS. 7,20,000/- WITHOUT APPRECIATING THAT THE AMOUNT DEP OSITED IN BANK IS FROM THE SALE PROCEEDS OF MANGO FRUITS. 3. FIRST GROUND IS WITH RESPECT TO ADDITION OF RS. 2 LAKH. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOT ICED THAT ASSESSEE HAD CLAIMED RS.19,40,000/- AS INCOME FROM AGRICULT URAL ACTIVITIES. ASSESSEE WAS ASKED TO SUBSTANTIATE THE AGRIC ULTURAL INCOME AND CORRESPONDING EXPENSES BY FURNISHING NECESSARY EVIDE NCE. AO NOTED THAT ASSESSEE DID NOT FURNISH ANY EXPLANATION NOR ATTENDED BEFORE HIM. HE THEREFORE OUT OF THE TOTAL AGRICULTURAL INCO ME OF RS.19,40,000/- CLAIMED BY THE ASSESSEE DISALLOWED, 50% I.E ., RS.9,70,000/- AND TREATED IT AS INCOME FROM OTHER SOURCES . AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFOR E LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE REM AND REPORT OF THE AO AND ASSESSEES SUBMISSION TO THE REMAND REPORT GRANTED PARTIAL RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER : 3 5.2 IT COULD BE SEEN FROM THE REMAND REPORT THAT T HE AO HAS NOT OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. IN THE CIR CUMSTANCES, THE ADDITIONAL EVIDENCE IS ADMITTED IN INTEREST OF JUST ICE AS THE REASONS CITED BY THE APPELLANT ARE SUFFICIENT CAUSE FOR THE PURPO SE OF RULE 46A. ON MERITS HOWEVER THE AO HAS STATED THAT THE APPELLANT HAS NOT PRODUCED SALE PATTIS, VOUCHERS FOR EXPENSES AND CONTENDED DU RING REMAND PROCEEDINGS THAT THE ROUGH RECORD HAS BEEN MAINTAIN ED IN RESPECT OF AGRICULTURAL INCOME. THE ONLY DIRECT EVIDENCE BEFOR E ME IS THE 7/12 EXTRACTS , OF THE LAND WHICH SHOW THE NARRATION 'KALAMBAUG' ME ANING ORCHARDS. THE PHOTOGRAPHIC EVIDENCE CANNOT BE ACCEP TED BY ME AS IT COULD BE OF ANY LAND ANYWHERE AND DOES NOT SPECIFIC ALLY INDICATE THE LAND OF THE APPELLANT. THE SITUATION WHICH THEREFOR E EMERGES IS THAT THE APPELLANT IS ABLE TO PRODUCE 7/12 EXTRACTS SHOWING SOME ORCHARDS, BUT HAS NO OTHER DIRECT EVIDENCE TO SHOW THE SALE CONSI DERATION OR EXPENSES INCURRED. THE APPELLANT THEREFORE RELIED ON THE REP ORT OF THE VALUER REFERRED ABOVE. THE AO IN HIS REMAND REPORT IS SILE NT ON THIS ISSUE OF THE VALUERS REPORT . IN HIS REJOINDER TO THE REMAND REPORT, THE APPELLANT H AS SUBMITTED AS UNDER . - DURING THE REMAND PROCEEDINGS APPELLANT HAS SUBMITT ED THE EXPLANATION REGARDING AGRICULTURAL INCOME AND SOURC ES OF CASH DEPOSITS. THE APPELLANT SUBMITTED CASH FLOW STATEM ENT, P R O F IT AND LO SS A / C, C A S H B OOK , LEDGER A / C OF BANK AND PAT SANSTHA . THE AP PELL A NT ALSO SUBM ITT ED THAT HE MA INTA I N S R O U G H RECORD OF DAILY SALES AND FU R NISHED DETA I LS OF T HE SAME. T HE ASSESSING OFFICER ON DU E V E R I FICA TI ON ACCEPTED THAT THE APPELLANT IS AGRICUL T URAL AND H AV ING AGR IC ULTURAL INCOM E . THE APPELLANT IS DEALING IN M ANG O SALES AND THE CUSTOMERS ARE THE END USER CONSUM E RS W HO ARE G E NERAL PUBLIC WAL K ING IN TH E PLACE T O BUY MANGO BOXES FOR THEIR CONSUMPTION. ALSO TH E APPELLAN T MADE THE MAINTENANCE OF TREES FROM LOCAL PERSONS AS WHEN REQUIRED. TH E AGRI C UL T URAL INCOM E SHOWN BY THE APPELLANT IS DULY REFLECTED IN THE CASH FLOW STATEM E NT; FURTHER TH E IN C OME SHOWN IS W E L L WITH IN THE PARAMETERS AS CERTIFIED BY GOVT . REGISTERED VALU E R O N INSP E CTION OF TH E TR EES . AL S O TH E APP E LLANT HAS SHOWN THE AGRICULTURAL INCOME IN EARLIE R Y E AR S A L S O. TH E APP E L LAN T D O N OT H AVE AN Y OTH E R SOURC E OF INCOM E THAN TH IS A GRICU L T U R A L IN CO M E . IN V I EW OF TH I S IT IS REQUE S T ED THA T TH E AG RICULT U RAL INCOME AND AMOUNT DEPOSIT E D IN BA NK B E ACCEPTED. I HAVE CONSIDERED THE MATTER IN DEPTH . FROM THE FACTUAL POSITION BEFORE ME, IT IS SEEN THAT THE 7/12 EXTRACTS SHO W SOME CULTIVATION BEING MADE IN THE ORCHARDS , HO W EVER THE APPELLANT DOES NOT HA V E DIRECT EVIDENCE FOR THE SALE CONSIDERATION OR EXPEN SES INCURRED. HE THEREFORE RELIES ON THE ESTIMATE OF THE REGISTERED VALUER. IN THE INTERESTS OF JUSTICE , I AM OF THE VIEW THAT IT WOULD BE FAIR TO BOTH THE APPELLANT AND THE AO TO REDUCE THE ADDITION MADE B Y THE AO TO A SUM OF RS 2,00,000 ON ESTIMATE BASIS. THIS IS SIMPL Y BECAUSE THE ' APPELLANT HIMSELF IS RELYING ON TH E ESTIMATE OF THE VALUER AND TH E AO IS OF THE OPINION THAT THE APPELLANT DOES NOT HA VE ANY EVIDENCE TO SHOW SALE CONSIDERATION FROM AGRICULTURE OR EXPE NSES INCURRED THEREON . THE DISALLOWANCE MADE B Y THE AO IS THEREFORE RESTRICTED TO RS. 2 , 00 , 000 AND ADDITIONAL GROUND 1 IS PARTLY ALLOWED . AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 4 4. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND LD.D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESP ECT TO ADDITION OF RS.2,00,000/- UPHELD BY LD.CIT(A). WE FIND THAT LD.CIT(A) W HILE GRANTING PARTIAL RELIEF TO THE ASSESSEE HAS NOTED THAT TH OUGH 7/12 EXTRACT SHOWS SOME CULTIVATION BEING MADE IN THE ORCHARD S BUT ASSESSEE HAD NOT FURNISHED ANY DIRECT EVIDENCE FOR THE S ALE CONSIDERATION RECEIVED ON THE SALE OF MANGOES AND THE E XPENSES INCURRED FOR ITS CULTIVATION. AO HAD RELIED ON THE ESTIMATIO N OF THE REGISTERED VALUER. AFTER CONSIDERING THE TOTALITY OF THE FACT S, LD.CIT(A) RESTRICTED THE ADDITION OF RS.2 LAC. BEFORE US, NO FALLACY IN T HE FINDINGS OF LD.CIT(A) HAS BEEN POINTED OUT BY EITHER PARTIES. WE TH EREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS, THE GROUND OF ASSESSEE IS DISMISSED. 6. GROUND NO.2 IS WITH RESPECT TO ADDITION OF RS.10,20,000/-. 6.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOT ICED THAT ASSESSEE HAD DEPOSITED CASH OF RS.10,20,000/- ON 09.07.2 011. AO NOTED THAT SINCE ASSESSEE HAD NEITHER FURNISHED ANY DE TAILS REGARDING EXPENDITURE NOR EXPLAINED ABOUT THE SOURCE OF CASH OF DE POSITS, HE CONCLUDED THE CASH DEPOSITS WERE FROM UNEXPLAINED SOURCE S. HE ACCORDINGLY TREATED RS.10,20,000/- AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES U/S 69 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD.CIT(A), WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE. 5 5.3 ADDITIONAL GROUND 2 : THIS IS AGAINST THE ACTION OF THE AO IN HOLDING THAT THE CASH OF RS.10,20,000 DEPOSITED IN THE BANK ACCOUNT IS UNEXPLAINED. ON THIS ISSUE, IT COULD BE SEEN FROM T HE CASH FLOW STATEMENT OF THE APPELL A NT REPRODUCED IN THE WRITTEN SUBMISSIONS THAT THE CASH OF RS.10,20,000 HAS B E EN DEPOSITED IN THE BANK OF M AHARASHTRA ACCOUNT ON 09/07/2011 AND PRIOR TO TH E SAME, THERE I S A CASH WITHDRAWAL OF RS.3 , 00,000 ON 13/06/2011 FROM SHIVN E RI PAT SANSTHA . I AM OF THE VI EW THAT CREDIT FOR THE SAME COULD BE GI V EN TO THE APPELLANT. HOWEVER THE OTHER CLAIM OF THE APPELLAN T OF RS.9,00,000/- CASH WITHDRAWN FROM BANK OF MAHARASHTRA ACCOUNT IS NOT TENABLE SIMPLY BECAUSE S A ID CASH WITHDRA WA L IS ON 11/07/2011 AFTER THE DATE OF CASH DEPOSIT . THE OTHER ' CL A IM THAT THE CASH IS SOURCED OUT OF MANGO SALES ALSO DOES NOT FIND FAVOUR WITH ME I N T H E LI G HT OF THE ADMITTED FACT THAT THE APPELLANT HAS NO EVIDENCE TO SHO W THE ACTUAL RECEIP T OF CASH FROM MAN G O SALES AND THE AGRICULTURAL INCOME IS IN EF F E C T ON AN ESTIMA TE BAS I S. THE A DD I TI O N M A D E B Y THE AO IS THER E FORE RESTRICTED TO RS. 7,20, 00 0 AND A DD I TI O N A L G R O U ND 2 IS P A RTL Y A LLOWED . AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 7. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HAVING ORCHARDS OF MANGO AND HAVING INCOME FROM THE SALE OF MANGOES HAS BEE N ACCEPTED BY REVENUE. HE SUBMITTED THAT THE SEASON FOR SALE OF MA NGOES IS GENERALLY BETWEEN MARCH AND MAY. HE SUBMITTED THAT AS AGAINST THE INCOME FOR THE YEAR UNDER CONSIDERATION OF RS.19,40,000/- C LAIMED BY THE ASSESSEE FROM AGRICULTURAL ACTIVITIES, THE NET AGRICULTUR AL INCOME OF ASSESSEE AS FINALLY DETERMINED AFTER LD.CIT(A)S ORDER WOR KS OUT TO RS.17.40 LACS. FURTHER THE CASH HAS BEING DEPOSITED ON 09.07.2011 I.E., AFTER THE END OF MANGO SEASON WHICH ENDS IN MAY TO B E OUT OF THE SALE PROCEEDS OF MANGOES CANNOT BE BRUSHED ASIDE. IN S UCH A SITUATION, THE LD.CIT(A) OUGHT TO HAVE ACCEPTED THE EXPLAN ATION OF THE ASSESSEE THAT THE CASH DEPOSITS TO BE OUT OF THE SALE OF MANGOES. HE THEREFORE SUBMITTED THAT NO ADDITION IS CALLED FOR IN THE PR ESENT CASE. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.CIT(A). 6 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO THE ADDITION MADE ON ACCOUNT OF CASH DEPOSITS IN THE BANK. IT IS A FACT THAT ASSESSE E HAS MANGO ORCHARDS AND INCOME FROM SALE OF MANGOES HAS NOT BEEN DOUBTED BY THE REVENUE. IT IS ALSO A FACT THAT IN A.Y. 20 10-11 I.E., IMMEDIATE PRECEDING ASSESSMENT YEAR, ASSESSEE HAS SHOWN NET AGRICULTURE INCOME OF RS.18,55,600/-. FURTHER AS AGAINST TH E AGRICULTURAL INCOME OF RS.19,40,000/- WHICH HAS BEEN CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION, AO HAD DISALLOWED THE INCOME AT 50% I.E., RS.9,70,000/-. WHEN THE MATTER WAS CARRIED BEFORE LD.CIT(A), LD.CIT(A) HAS RESTRICTED THE ADDITION TO RS.2 LAKHS THEREBY ACCEPTING THE INCOME FROM AGRICULTURAL ACTIVITIES AT RS.17.40 LAKHS. CONSIDERING THE FACT THAT DEPO SIT OF CASH WAS ON 09.07.2011 I.E., AFTER THE SEASON IN WHICH SALE OF MANG OES WHICH IS BETWEEN MARCH AND MAY, THE SUBMISSION OF THE AS SESSEE THAT THE DEPOSITS TO BE OUT OF SALE PROCEEDS OF MANGOES CANN OT BE DISCARDED WITHOUT THERE BEING ANY SUPPORTING CONTRARY MATERIAL IN R EVENUES POSSESSION. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THE ASSESSEES CONTENTION OF THE CASH DEPOSIT S BEING OUT OF SALE PROCEEDS OF MANGOES CANNOT BE DISCARDED. WE THERE FORE DIRECT TO DELETE THE ADDITION THAT HAS BEEN UPHELD BY LD.CIT(A). THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED ON 16 TH DAY OF APRIL, 2019. SD/- SD/- ( PARTHA SARATHI CHAUDHURY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 16 TH APRIL, 2019. YAMINI 7 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-2, KOLHAPUR. PR. CIT-2, KOLHAPUR. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.