M.Rama Kirshna Reddy, Hyderabad V. DCIT, Hyderabad

ITA 459/HYD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66199 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-12-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 24-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 459/HYD/2010 ASSESSMENT YEAR: 2004-05 M. RAMAKRISHNA REDDY, ... APPELLANT HYDERABAD VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDE NT CENTRAL CIRCLE-2,, HYDERABAD. APPELLANT BY : SHRI P. MURALI MOHAN RAO RESPONDENT BY : SMT. AMISHA S. GUPT DATE OF HEARING : 23/07/2012 DATE OF PRONOUNCEMENT : 31/08/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-III, HYDERABAD DATED 01/07/2009 FOR THE ASSESSMENT YEAR 2004-05. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED UNDER SECTION 132 ON 24/0 8/2005 IN THE BUSINESS AND RESIDENTIAL PREMISES IN THE CASE O F MV SUBRAMANYESWARA REDDY GROUP. THEREAFTER, NOTICE U/S 153A FOR AY 2004-05 WAS ISSUED IN THE ASSESSEES CASE ON 28/ 02/2006. THE ASSESSEE HAD FILED RETURN OF INCOME ON 28/04/2006 A DMITTING INCOME OF RS. 2,58,228/- FROM HOUSE PROPERTY, CAPIT AL GAINS, OTHER SOURCES AND AGRICULTURAL INCOME OF RS. 2,50,0 00/-. AFTER ISSUE OF SEVERAL NOTICES ON 28/12/2007, THE ASSESSE ES AR APPEARED AND FILED THE ORIGINAL RETURN ALONG WITH I NTIMATION AND ITA NO. 459/HYD/10 MR. RAMA KRISHNA REDDY 2 ALSO COPY OF THE BANK ACCOUNT AND THE PATTA COPY OF THE AGRICULTURAL INCOME. THE ASSESSING OFFICER HELD THA T AS PER THE INFORMATION FILED FOR THE AY 2003-04, THE ASSESSEE IS HAVING DRY AGRICULTURAL LAND OF 9 ACRES AND THE ASSESSEE HAD D ISCLOSED INCOME AT RS. 50,000/- FROM THE ABOVE AGRICULTURAL LAND LAST YEAR. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD N OT PRODUCED ANY DETAILS REGARDING CROPS GROWN, EVIDENCE FOR SAL E OF PRODUCE ETC. HE, THEREFORE, HELD THAT IN THE ABSENCE OF ANY SUCH MATERIAL, THE AGRICULTURAL INCOME RETURNED IS NOT BELIEVABLE AND HENCE A SUM OF RS. 50,000/- IS ALLOWED AND THE BALANCE OF R S. 2,00,000/- IS TREATED AS ASSESSEES INCOME FROM OTHER SOURCES AND ADDED TO THE TOTAL INCOME. 3. ON FURTHER APPEAL BEFORE THE CIT(A) AGAINST THE ADDITION OF RS. 2,00,000/- MADE ON ACCOUNT OF TREATING THE AGRI CULTURAL INCOME AS INCOME FROM OTHER SOURCES. THE AR OF TH E ASSESSEE FILED WRITTEN SUBMISSIONS STATING THAT THE ASSESSEE S AGRICULTURAL PRODUCE WAS MANGO CROP AND THE COMPARISON OF CROP O F ONE YEAR WITH THAT OF ANOTHER YEAR IS NOT JUSTIFIED. IT WAS SUBMITTED THAT THE INCREASE IN AGRICULTURAL INCOME IN THIS YEAR WA S THE RESULT OF GOOD CROP, WHICH DEPENDED ON VARIOUS FACTORS. 4. THE CIT(A) OBSERVED THAT THE ASSESSEE HAS NOT FI LED ANY EVIDENCE IN THE FORM OF SALE OF PRODUCE, CROP GROWN , ETC. TO SUBSTANTIATE HIS CLAIM AND SINCE THE ASSESSEE HAS N OT SHOWN AGRICULTURAL INCOME OF THIS MAGNITUDE IN ANY OF THE EARLIER YEARS, SUCH A SUDDEN INCREASE IN THE AGRICULTURAL INCOME F OR THIS YEAR ALONE SEEMS TO BE UNNATURAL. THE CIT(A) CONFIRMED T HE ACTION OF THE ASSESSING OFFICER IN DETERMINING THE AGRICULTUR AL INCOME TO THE EXTENT OF RS. 50,000/- AND MAKING THE ADDITION OF RS. 2,00,000/- AS INCOME FROM OTHER SOURCES. ITA NO. 459/HYD/10 MR. RAMA KRISHNA REDDY 3 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. NO DOUBT THAT AGRICULTURAL INCOME DEPENDS UPON VAGARIE S OF NATURE AND A GOOD MANGO CROP IN THE PRESENT YEAR COULD HAV E INCREASED THE AGRICULTURAL INCOME. WE FIND THAT FOR THE AY 20 03-04, THE ASSESSEE HAS RETURNED THE AGRICULTURAL INCOME FROM THESE 9 ACRES AT RS. 50,000/- AND FOR THE ASSESSMENT YEAR 2008-09 THE ASSESSEE HAS RETURNED AGRICULTURAL INCOME OF RS. 3, 10,000/-. IN THE YEAR UNDER APPEAL, I.E. FOR AY 2004-05, THE ASS ESSEE HAS RETURNED THE AGRICULTURAL INCOME AT RS. 2,50,000/-. IT IS PROBABLE THAT EACH YEAR THE AGRICULTURAL INCOME PROGRESSIVEL Y INCREASES DUE TO THE INFLATION IN PRICE OF COMMODITIES AND, T HEREFORE, TAKING INTO CONSIDERATION THE OVERALL FACTORS, WE ARE OF T HE OPINION THAT IT WOULD BE REASONABLE TO ESTIMATE THE AGRICULTURAL IN COME AT RS. 1,25,000/- FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO RESTR ICT THE ADDITION TO RS. 1,25,000/- (50% OF THE AMOUNT RETURNED AS AG RICULTURAL INCOME) AS AGAINST RS. 2,50,000/- ADOPTED BY THE AS SESSING OFFICER AND CONFIRMED BY THE CIT(A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2012. SD/- SD/- ( CHANDRA POOJARI) (ASHAVIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 31 ST AUGUST, 2012 KV ITA NO. 459/HYD/10 MR. RAMA KRISHNA REDDY 4 COPY TO:- 1) SHRI M. RAMA KRISHNA REDDY, C/O P. MURALI & CO., CAS., 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 2) DCIT, CENTRAL CIRCLE 2, HYDERABAD., 3) THE CIT (A)-III, HYDERABAD 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D.