BABAN DASHRATH HANDE, NAVI MUMBAI V. DCIT CEN-CIR, MUMBAI

ITA 4450/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2696 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 30-06-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K R DAS
• Assessee Lawyers: RITIKA GARG
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, SENIOR VICE PRESIDENT I.T.A. NO. 4450/MUM/2008 (ASSESSMENT YEAR : 2004-05) BABAN DASHRATH HANDE, F-107, APMC FRUIT MARKET, SECTOR-19, TURBHE, NAVI MUMBAI-400 705. PAN:AAAPH4809E VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CEN.CIR.36, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.RITIKA GARG RESPONDENT BY : SHRI K.R.DAS, (CIT)DR O R D E R THIS IS AN APPEAL BY THE ASSESSEE AND IT RELATES TO THE ASSESSMENT YEAR 2004-05. THE ASSESSEE IS AN INDIVID UAL. HE IS A PARTNER IN TWO PARTNERSHIP FIRMS BY NAME M/S.RAMCHA NDRA DASHRATH HANDE & CO. AND RAMCHANDRA DASHRATH & CO. WHICH CARRY ON BUSINESS AS LICENSED COMMISSION AGENTS OF FRUITS OPERATING FROM APMC MARKET, NAVI MUMBAI 2. IN THE RETURN, THE ASSESSEE DECLARED AGRICULTURA L INCOME OF RS.1,12,500/- AND A STATEMENT IN THE NAME OF HIS BR OTHER RAMCHANDRA HANDE WAS FILED IN SUPPORT OF THE CLAIM OF AGRICULTURAL INCOME. THE ASSESSING OFFICER, WHILE C OMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, NOTICED CASH DEPOSITS OF RS.2,65,442/- IN THE BANK ACCOUNT AND CASH DEPOSITS OF RS.1,83,129/- IN THE BANK ACCOUNT STATE D TO BE SALE PROCEEDS OF SUGAR. HE DIVIDED THE CASH DEPOSITS OF RS.1,83,129/- EQUALLY BETWEEN THE ASSESSEE AND HIS BROTHER AND THUS A SUM OF RS.91,564/- WAS TAKEN AS THE ASSESSEE S AGRICULTURAL INCOME. THE CASH DEPOSITS OF RS.2,65,4 42/- WERE ALSO EQUALLY DIVIDED BETWEEN THE ASSESSEE AND HIS B ROTHER AND ITA NO.4450/MUM/08 2 THE ASSESSEES HALF SHARE OF RS.1,32,721/- WAS ADDE D AS THE ASSESSEES INCOME FROM OTHER SOURCES IN THE ABSENCE OF ANY EXPLANATION FOR THE SAME. 3. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE FILED WRITTEN SUBMISSIONS AND CLAIMED THAT HE CARRIED ON AGRICULT URAL ACTIVITY AT VILLAGE UMERAJ, JUNNAR TALUK, PUNE DIST. ALONG W ITH HIS BROTHER. HE ALSO SUBMITTED THAT THE WITHDRAWALS IN THE BANK ACCOUNT WERE FOR AGRICULTURAL EXPENSES. HE HOWEVER ADMITTED THAT PROPER DOCUMENTARY EVIDENCE FOR AGRICULTURAL I NCOME WAS NOT MAINTAINED BECAUSE THE AGRICULTURAL ACTIVITIES BELONGED TO UNORGANIZED SECTOR. IT WAS PLEADED THAT THE ADDITIO N BE DELETED. 4. THE CIT(A) TOOK NOTE OF THE ADMISSION THAT THERE WAS NO EVIDENCE FOR THE AGRICULTURAL RECEIPTS OR EXPENSES. HE THEREFORE, HELD THAT ALL THE DEPOSITS IN THE BANK ACCOUNT CANN OT BE CONSIDERED AS AGRICULTURAL INCOME. HE REFERRED TO T HE STATEMENT OF THE ASSESSEES BROTHER RAMCHANDRA DASHRATH HANDE IN THE COURSE OF THE SEARCH PROCEEDINGS CARRIED OUT ON 26. 2.2003 TO THE EFFECT THAT HE WAS NOT GETTING ANY INCOME FROM AGRICULTURAL ACTIVITIES IN THE PAST TWO YEARS. THE CIT(A) ALSO N OTICED THAT THERE WERE NO DETAILS REGARDING THE AGRICULTURAL OP ERATIONS CARRIED OUT BY THE ASSESSEES BROTHER (ALLEGEDLY ON BEHALF OF THE ASSESSEE AND ON HIS OWN BEHALF) DURING THE YEAR UND ER CONSIDERATION. ACCORDINGLY, THE ADDITION OF RS.1,3 2,721/- AS INCOME FROM OTHER SOURCES WAS CONFIRMED. AS REGARDS THE RESTRICTING OF AGRICULTURAL INCOME TO RS.91,564/- A S AGAINST RS.1,12,500/- DECLARED BY THE ASSESSEE, THE SAME WA S ALSO UPHELD IN PARA 3.1 OF THE ORDER OF THE CIT(A). 5. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRI BUNAL. THE CONTENTION OF THE ASSESSEE BEFORE ME IS THAT THE AS SESSEE HAS DECLARED AGRICULTURAL INCOME RIGHT FROM THE ASSESSM ENT YEAR ITA NO.4450/MUM/08 3 1999-2000 IN WHICH YEAR A SUM OF RS.2,50,000/- WAS ACCEPTED IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) AS AGRICULTURAL INCOME AND A COPY OF THE SAID ASSESSME NT ORDER WAS FILED. MY ATTENTION WAS ALSO DRAWN TO THE EVI DENCE ADDUCED BEFORE THE ASSESSING OFFICER UNDER COVER OF THE LETTER DATED 6.12.2006 AS ALSO TO THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A). IT WAS SUBMITTED THAT THE ASSESSEE DID NOT MAINTAIN ANY DOCUMENTARY EVIDENCE FOR THE SALE OF AGRICULTUR AL PRODUCE BECAUSE THERE WAS NO LEGAL OBLIGATION TO DO SO AND ALSO BECAUSE THE AGRICULTURAL SECTOR WAS UNORGANIZED AND IT WAS NOT PRACTICABLE TO OBTAIN SUCH EVIDENCE. AN ALTERNATIVE CONTENTION RAISED BEFORE ME WAS THAT IN ANY CASE THE BANK ACCO UNT DID NOT BELONG TO THE ASSESSEE AND THEREFORE, IF AT ALL ANY ADDITION HAS TO BE MADE FOR UNEXPLAINED DEPOSITS THEREIN, IT CANNOT BE MADE IN THE ASSESSMENT OF THE ASSESSEE. IN THIS CONNECTION, IT WAS POINTED OUT THAT THE BANK ACCOUNT WAS THAT OF THE A SSESSEES BROTHER. 6. IN THE COURSE OF THE ARGUMENTS, MY ATTENTION WAS ALSO DRAWN TO THE ORDER DATED 9 TH SEPTEMBER, 2009 IN ITA NO.6063/MUM/2008 (ASSESSMENT YEAR 1999-2000) IN THE ASSESSEES OWN CASE IN WHICH THE STATEMENT OF THE A SSESSEES BROTHER MADE BEFORE THE SEARCH AUTHORITIES ON 26.2. 2003 HAS BEEN REFERRED TO IN PARA 15 OF THE ORDER AND IT WAS HELD THAT THAT THE AVERMENT THEREIN TO THE EFFECT THAT NO AGRICULT URAL ACTIVITIES WAS CARRIED ON BY HIM FOR TWO YEARS MUST BE CONFINE D TO THE PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS 2000-01 TO 2002- 03 AND IT CANNOT BE ASSUMED THAT THE NATURAL CALAMI TIES WHICH AFFECTED THE OPERATIONS EXISTED EVEN FOR OTHER YEAR S. IT IS THUS SUBMITTED THAT THE ASSESSING OFFICER DID NOT PROPER LY APPRECIATE THE IMPACT OF THE STATEMENT MADE BY THE ASSESSEES BROTHER. ITA NO.4450/MUM/08 4 7. THE LEARNED SENIOR D.R. TOOK ME THROUGH THE ORDE RS OF THE DEPARTMENTAL AUTHORITIES AND HIGHLIGHTED THE FINDIN GS RECORDED THEREIN AND CONTENDED THAT THERE IS NO EVIDENCE IN SUPPORT OF THE ASSESSEES CLAIM AND THEREFORE, NO RELIEF IS DU E. 8. I HAVE CAREFULLY CONSIDERED THE FACTS AND THE RE LEVANT SUBMISSIONS. THE ASSESSING OFFICER HAS NOT DISPUTED THE CLAIM THAT THE DEPOSITS AGGREGATING RS.1,82,189/- IN THE BANK ACCOUNT REPRESENTED SALE OF SUGAR AND HAS GIVEN CREDIT FOR HALF THE AMOUNT I.E. RS.91,564/- AS AGRICULTURAL INCOME FALL ING TO THE ASSESSEES SHARE. NO FAULT CAN BE FOUND AGAINST T HIS FINDING. AS REGARDS THE CASH DEPOSITS OF RS.2,65,442/-, HE HAS HELD THAT HALF OF THE SAME NAMELY RS.1,32,721/- BELONGS TO TH E ASSESSEE AND SINCE THERE WAS NO EXPLANATION, THE SAID AMOUN T SHOULD BE ASSESSED IN THE HANDS OF THE ASSESSEE. THE RESULT I S THAT OUT OF THE AGRICULTURAL INCOME OF RS.1,12,500/- CLAIMED BY THE ASSESSEE IN THE RETURN, ONLY RS.91,564/- WAS ACCEPT ED AS SUCH. THIS LEFT A BALANCE OF RS.20,936/-. IN ADDITION RS. 1,32,721/- WAS ADDED AND THERE IS JUSTIFICATION IN THE ASSESSE ES COMPLAINT, MADE IN GROUND NO.4 BEFORE ME THAT THERE IS A DOUB LE ADDITION TO THE EXTENT OF RS.20,936/-. I THEREFORE ALLOW SET OFF TO THE EXTENT OF RS.20,936/- FROM THE ADDITION OF RS.1,32, 721/- WHICH LEAVES A BALANCE OF RS.1,11,785/- TO BE EXAMINED AN D DECIDED. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAD DRA WN MY ATTENTION TO THE AGRICULTURAL INCOME OF RS.2,50,000 /- ASSESSED IN THE ASSESSMENT YEAR 1999-2000 BUT I DO NOT THINK THAT THIS IS OF ANY ASSISTANCE BECAUSE FOR THE YEAR UNDER APPEAL THE ASSESSEE HIMSELF HAS SHOWN ONLY RS.1,12,500/- AS HI S AGRICULTURAL INCOME. TURNING BACK TO THE AMOUNT OF RS.1,11,785/- WHICH HAS TO BE EXPLAINED BY THE ASSE SSEE AS PART OF THE CASH DEPOSITS IN THE BANK AMOUNTING TO RS.1, 32,721/- AS HIS SHARE OF THE DEPOSITS, ADMITTEDLY THERE IS NO E VIDENCE IN SUPPORT OF THE ASSESSEES CLAIM THAT THEY REPRESENT AGRICULTURAL ITA NO.4450/MUM/08 5 INCOME. HOWEVER, THE CIT(A) IS ALSO NOT JUSTIFIED I N RELYING ON THE STATEMENT OF THE ASSESSEES BROTHER MADE UNDER SECTION 132(4) OF THE ACT IN THE LIGHT OF THE FINDING OF TH E TRIBUNAL (SUPRA) THAT THIS STATEMENT MUST BE CONFINED TO THE ASSESSMENT YEARS 2000-01 TO 2002-03. I AM CONCERNED WITH THE A SSESSMENT YEAR 2004-05 AND THE STATEMENT DOES NOT COVER THIS YEAR IN THE STATEMENT THE ASSESSEES BROTHER HAS STATED THAT W ITH THE HELP OF AGRICULTURAL LABOUR HE WAS GROWING SUGARCANE, GR OUNDNUTS, CHANA, WHEAT BAJRA, CORN AND SEASONAL CROPS SUCH AS PALAK, CHAWLI, METHI ETC. ON THE AGRICULTURAL LANDS. THIS PART OF THE STATEMENT HAS NOT BEEN FOUND TO BE FALSE OR INCORRE CT. IN THESE CIRCUMSTANCES, TAKING AN OVERALL VIEW OF THE MATTER , I CONSIDER THAT THE ASSESSEE CAN BE GIVEN CREDIT FOR RS.50,000 /- OUT OF THE DEPOSITS OF RS.1,11,785/-, AS AGRICULTURAL INCOME. THE BALANCE OF RS.61,785/- MAY BE ASSESSED AS INCOME FROM OTHER SOURCES IN THE PLACE RS.1,32,721/-. I DIRECT THE ASSESSING OFFICER TO MODIFY THE ASSESSMENT ACCORDINGLY. THE APPEAL OF TH E ASSESSEE IS THUS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 14 TH DAY OF DECEMBER, 2009. SD/- ( R.V.EASWAR ) SENIOR VICE PRESIDENT MUMBAI, DATED 14 TH DECEMBER, 2009. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CENT.III, MUMBAI. 4. THE CIT(A)-CENT. VIII, MUMBAI 5. THE DR SMC BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI