K.V.K. Kishore Babu, R.R.Dist., Hyderabad V. ITO, Ward-1, Vikarabad, Vikarabad

ITA 454/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5852 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 30-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Reasonable cause; Condonation of delay

Judgement Text

ITA NO 454 OF 2016 KVK KISHORE BABU HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.454/HYD/2016 (ASSESSMENT YEAR: 2010-11) SHRI K.V.K. KISHORE BABU SHANKARPALLY, R.R. DISTT. PAN: BAZPK 6079 B VS INCOME TAX OFFICER WARD-1 VIKARABAD R.R. DISTT. FOR ASSESSEE: SHRI S.RAMA RAO FOR REVENUE : SHRI A. SITARAMA RAO, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2010-11. IN T HIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE CIT (A)-2 HYDERABAD, DATED 31.12.2015 AND HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS BOTH ON FACTS AND IN LAW TO THE EXTENT IT IS PREJUDICIAL TO THE ASSESSEE. 2. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ESTIMATION OF INCOME MADE BY THE AO. THE LEARNED CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE RATE OF PROFIT IS NOT AS HIGH AS 5% AS DECIDED BY THE AO. 3. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ACTION OF THE AO IN TREATING THE AGRICULTURAL INCOME OF DATE OF HEARING : 27.12.2016 DATE OF PRONOUNCEMENT : 30.12.2016 ITA NO 454 OF 2016 KVK KISHORE BABU HYDERABAD PAGE 2 OF 5 RS.2,35,200 AS INCOME FROM OTHER SOURCES. THE LEARNED CIT (A) OUGHT TO HAVE SEEN THAT THE APPELLANT WAS IN POSSESSION OF SUBSTANTIAL AGRICULTURAL LANDS AND THEREFORE, OUGHT TO HAVE ALLOWED THE APPEAL. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. AT THE OUTSET, IT IS NOTICED THAT THERE IS A DEL AY OF 16 DAYS IN FILING OF THE APPEAL BEFORE US. THE ASSESSE E HAS FILED AN APPLICATION FOR CONDONATION OF DELAY STATING THAT T HE ASSESSEE WAS SUFFERING FROM LOWER BACKACHE DURING THE PERIOD 10- 3-2016 TO 27- 3-2016 AND HE WAS NOT IN A POSITION TO TRAVEL TO HY DERABAD TO DISCUSS THIS CASE WITH THE ADVOCATE AND THIS HAS RE SULTED IN THE DELAY OF 16 DAYS IN FILING OF THE APPEAL. 3. THE LEARNED DR HOWEVER, OPPOSED THE CONDONATION OF THE DELAY. 4. HAVING REGARD TO THE RIVAL CONTENTIONS, WE ARE S ATISFIED THAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN FILING OF THE APPEAL BEFORE THE TRIBUNAL WITHIN THE SPECIFIED TIME. THEREFORE, WE CONDONE THE DELAY AND PROCEED TO DISP OSE THE APPEAL AS UNDER. 5. GROUNDS OF APPEAL NO. 1 & 4 ARE GENERAL IN NATUR E AND NEEDS NO ADJUDICATION. 6. AS FAR AS THE ISSUE IN GROUND NO.2 IS CONCERNED, THE AO HAS ESTIMATED THE INCOME FROM RUNNING OF A WINE SHOP AT 5% ITA NO 454 OF 2016 KVK KISHORE BABU HYDERABAD PAGE 3 OF 5 OF THE GOODS PUT TO SALE AND THE CIT (A) HAS CONFIR MED THE SAME AND THE ASSESSEE IS IN 2 ND APPEAL BEFORE US. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF THE CO ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SECUNDERABAD WINES VS. ITO IN ITA NO.181/HYD/2016 WHEREIN THE TRIBUNAL HAS UPHELD THE ESTIMATION OF INCOME AT 3% OF THE COST OF GOODS SOLD . BOTH OF US ARE SIGNATORIES TO THE SAID ORDER. RESPECTFULLY FOL LOWING THE SAME, WE DIRECT THE AO TO ESTIMATE THE INCOME OF THE ASSE SSEE ALSO AT 3% OF THE COST OF GOODS PUT TO SALE. ASSESSEES GROUND OF APPEAL NO.2 IS ACCORDINGLY ALLOWED. 7. AS REGARDS GROUND OF APPEAL NO.3, BRIEF FACTS AR E THAT THE ASSESSEE CLAIMED A SUM OF RS.2,35,200 AS AGRICU LTURAL INCOME. THE ASSESSEE WAS ASKED TO PRODUCE THE COMPL ETE DETAILS SUCH AS EXTENT OF LAND, LOCATION, COPIES OF PATADAR PASS BOOKS, PROOF OF CROPS GROWN, YIELD OF THE CROPS ETC., IN S UPPORT OF ITS CLAIM THAT IT IS AGRICULTURAL INCOME. THE ASSESSEE DID NO T FILE ANY DETAILS AND THEREFORE, THE AO TREATED THE SUM OF RS.2,35,20 0 AS INCOME FROM OTHER SOURCES AND BROUGHT IT TO TAX. AGGRIEVE D, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRME D THE ORDER OF THE AO AND THE ASSESSEE IS IN 2 ND APPEAL BEFORE US. 8. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS FILED THE DETAILS OF THE AGRICULTU RAL INCOME SUCH AS EXTENT OF LAND, LOCATION, COPIES OF PATTADAR PAS S BOOKS IN SUPPORT OF THE AGRICULTURAL INCOME DERIVED. HE SUBM ITTED THAT THE AO HAS NOT CONSIDERED THE EXTENT OF AGRICULTURAL LA ND HOLDINGS OF THE ASSESSEE AND HAS CONFIRMED THE ORDER OF THE AO WITHOUT ANY BASIS. ITA NO 454 OF 2016 KVK KISHORE BABU HYDERABAD PAGE 4 OF 5 9. THE LEARNED DR HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT MERE FILING OF THE PATTADAR PASS BOOK IS NOT SUFFICIENT TO PROVE THAT THE ASSES SEE HAD CARRIED ON AGRICULTURAL OPERATIONS AND HAS EARNED HUGE INCO ME OF RS.2,35,200 ON A SMALL EXTENT OF 4.33 ACRES OF LAND . 10. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT UNDISPUTEDLY THE ASSESSEE O WNS 4.33 ACRES OF AGRICULTURAL LAND AND HIS PARENTS ALSO OWN ED MORE THAN 16 ACRES OF AGRICULTURAL LAND AT GURAJALA, NEAR GUN TUR DISTRICT. THOUGH THE ASSESSEE HAS NOT GIVEN THE DETAILS OF TH E CROPS GROWN AND THE YIELD OF SUCH CROPS, EARNING OF AGRICULTURA L INCOME CANNOT BE RULED OUT. AT THE TIME OF HEARING, THE LEARNED C OUNSEL FOR THE ASSESSEE AGREED FOR RESTRICTING THE AGRICULTURAL IN COME TO 50% OF THE AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE. TA KING INTO CONSIDERATION THE EXTENT OF LAND HELD BY THE ASSESS EE, WE ARE INCLINED TO ACCEPT THE ASSESSEES CONTENTION AND WE RESTRICT THE AGRICULTURAL INCOME TO RS.1.00 LAKH FOR THE RELEVAN T A.Y AND THE GROUND OF APPEAL NO.3 IS ACCORDINGLY TREATED AS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. THE BALANCE AMOUNT OF RS.1,35 ,200 SHALL BE TREATED AS INCOME FROM OTHER SOURCES AND BROUGHT TO TAX ACCORDINGLY. THIS GROUND IS ACCORDINGLY TREATED AS PARTLY ALLOWED. 11. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2016. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 30 TH DECEMBER, 2016. ITA NO 454 OF 2016 KVK KISHORE BABU HYDERABAD PAGE 5 OF 5 VINODAN/SPS COPY TO: 1 SHRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA'S E LEGANCE, 3-6- 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 INCOME TAX OFFICER WARD-1 VIKARABAD, RR DISTT. 3 CIT (A)-2 HYDERABAD 4 PR. CIT 2 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER