SHRI PURSHOTTAM SHARMA, SIKAR V. INCOME TAX OFFICER, WARD-4, SIKAR

ITA 543/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6900 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 23-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA DHK
• Keywords: Assessment record
• Section: 143(3); 142(1); 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S A, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 543/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 PURSHOTTAM SHARMA, SHYAM KALA BHAWAN, MANDIR ROAD, KHATUSHYAMJI, SIKAR. CUKE VS. INCOME TAX OFFICER, WARD-4, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BMMPS 3747 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/01/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 07/01/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE REVISION ORDER DATED 28/03/2018 OF LD. PR. COMMISSIONER OF INCOME TAX-3, JAIPUR FOR THE A.Y. 2013-14. THE ASSESSEE HAS RAISED FOLLOWING GROUN DS: 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE, TH E ORDER PASSED BY LD. CIT U/S 263 IS ILLEGAL & BAD IN LAW AND BE QUASHED. 2. THE LD. CIT HAS ERRED ON FACTS AND IN LAW IN HOL DING THAT THE AMOUNT OF RS.4,60,800/- IS REQUIRED TO BE ADDED TO THE INC OME OF ASSESSEE AS HIS INCOME FROM PROFESSION WITHOUT CONSIDERING THE ENTIRE FACTS ON RECORD AND AT THE SAME TIME ALSO DIRECTING THE AO F OR FRESH EXAMINATION OF THE ISSUE. THUS, THE DIRECTION OF LD . CIT IS ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 2 CONTRADICTORY IN ITSELF ARC INDIRECTION TO ADD THIS AMOUNT TO THE INCOME OF ASSESSEE BE EXPUNGED. 3. THE LD. CIT HAS ERRED ON FACTS AND IN LAW IN HOL DING THAT INCOME TO THE EXTENT OF RS.22,70,032/- DECLARED AS AGRICULTUR AL INCOME NEEDS TO BE TAKEN AS INCOME FROM OTHER SOURCES WITHOUT CO NSIDERING THE ENTIRE FACTS ON RECORD AND AT THE SAME TIME ALSO DI RECTING THE AO FOR FRESH EXAMINATION OF THE ISSUE. THUS, THE OBSERVATI ON OF LD. CIT IS CONTRADICTORY IN ITSELF AND HER OBSERVATION TO ASSE SS SUCH AMOUNT AS INCOME FROM OTHER SOURCES BE EXPUNGED. 4. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 5. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 2. THE ASSESSEE IS INDIVIDUAL AND WORKING AS PRIEST A ND MANAGING KALA BHAWAN, KHATUSHYAMJI FOR WHICH THE ASSESSEE IS RECEIV ING SALARY. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION ON 25/3/2014 DECLARING TOTAL INCOME OF RS. 1,97,710/-. THE ASSESSEE ALSO DECLARED AGRICULTURAL INCOME OF RS. 23,06,032/-. THE ASSESSING OFFICER COMPLETED THE SCRUTINY ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 30/12/2015 AT THE TOTAL INCOME OF THE ASSESSEE AT RS. 2,10,051/-. SUBSEQUENTLY, THE LD. PR.CIT AFTE R GOING THROUGH THE ASSESSMENT RECORD FOUND THAT THE ASSESSING OFFICER ACCEPTED THE AGRICULTURAL INCOME OF RS. 23,06,032/- WITHOUT CONDU CTING DUE AND PROPER ENQUIRY. THE LD. PR.CIT ALSO NOTED THAT THE AGRICULTU RAL INCOME DECLARED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS FOUR TIMES MORE THAN WHAT WAS DECLARED IN THE PREVIOUS YEARS WHEREAS NO CHA NGE IN THE LAND ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 3 HOLDING FOR THE YEAR UNDER CONSIDERATION. ACCORDING LY, THE LD. PR.CIT INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT AN D ISSUED SHOW CAUSE NOTICE DATED 22/3/2018 U/S 263 OF THE ACT. IN RESPO NSE, THE ASSESSEE FILED HIS REPLY TO THE SHOW CAUSE NOTICE. THE LD. PR. CIT WHILE PASSING THE IMPUGNED REVISION ORDER, HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AS THE ASSESSEE HAS DECLARED EXCESS AGRICULTURAL IN COME WHICH CANNOT BE MORE THAN RS. 36,000/- CONSIDERING THE LAND HOLDING AND NATURE OF THE LAND AS WELL AS THE YIELD OF THE CROPS FROM THE SAID LAND. HENCE, THE ASSESSMENT ORDER WAS SET ASIDE BY THE LD. PR.CIT WITH THE DIRECTION FOR FRESH EXAMINATION OF THE ISSUE AFTER VERIFICATION A ND INVESTIGATION WHEREVER NECESSARY. 3. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE FI LED THE PRESENT APPEAL. 4. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITT ED THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT U/S 1 43(3) OF THE ACT HAS CONSIDERED ALL THE RELEVANT DETAILS AND MATERIAL IN RESPECT OF THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. HE HA S REFERRED TO THE ASSESSMENT ORDER AND SUBMITTED THAT IN RESPONSE TO NOTICE U/S 142(1) OF THE ACT, THE ASSESSEE PRODUCED SALARY CERTIFICATE, DETAILS OF AGRICULTURE ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 4 PRODUCTS AND ITS RECEIPTS WHICH WERE EXAMINED ON TEST CHECK BASIS BY THE ASSESSING OFFICER. AFTER THE CASE WAS DISCUSSED WITH AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, THE ASSESSING OFFIC ER WAS SATISFIED WITH THE CLAIM OF AGRICULTURAL INCOME AND THEREFORE, THE RE WAS A DUE AND PROPER ENQUIRY CONDUCTED BY THE ASSESSING OFFICER O N THIS ISSUE. THUS, THE LD AR HAS SUBMITTED THAT WHEN THE ASSESSING OFFICER HAS CONDUCTED DUE ENQUIRY THEN THE PROVISIONS OF SECTION 263 OF THE A CT CANNOT BE INVOKED BY THE LD. PR.CIT FOR HOLDING THE ORDER OF THE ASSES SING OFFICER ERRONEOUS FOR WANT OF ENQUIRY. HE HAS FURTHER CONTENDED THAT T HOUGH THE LD. PR.CIT HAS ISSUED SHOW CAUSE NOTICE DATED 22/03/2018, HOWEVE R IN THE IMPUGNED ORDER, THERE IS NO MENTION OF SHOW CAUSE NO TICE OR REPLY OF THE SHOW CAUSE NOTICE FILED BY THE ASSESSEE. FURTHER THE LD. PR.CIT HAS CONDUCTED ENQUIRY REGARDING THE RATES OF VARIOUS AG RICULTURAL PRODUCE FROM THE SIKAR APMC WITHOUT CONFRONTING THE SAID REP ORT TO THE ASSESSEE, THEREFORE, THERE IS A VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE WHEN THE ASSESSEE WAS NOT GIVEN AN OPPORTUNITY TO REPLY OR RE BUT INFORMATION WHICH WAS USED AGAINST THE ASSESSEE AND OBTAINED AT THE BA CK OF THE ASSESSEE. THE LD. AR HAS FURTHER SUBMITTED THAT THE LD. PR.CIT HAS ESTIMATED THE AGRICULTURAL INCOME OF THE ASSESSEE AT RS. 36,000/- AS AGAINST RS. 23,06,032/- AND THE BALANCE AMOUNT OF RS. 22,70,032 /- WAS TREATED AS INCOME FROM OTHER SOURCES. THE SAID ESTIMATION HAS B EEN DONE WITHOUT ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 5 CONSIDERING THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IN THE PRECEDING YEARS WHICH HAS NOT BEEN DISTURBED BY THE DEPARTMENT. THEREFORE, THE ESTIMATION OF AGRICULTURAL INCOME IS WITHOUT ANY BASIS. THUS, THE LD AR HAS SUBMITTED THAT THE IMPUGNED ORDE R IS NOT SUSTAINABLE IN LAW AS WELL AS ON FACTS WHEN THE LD. PR.CIT HAS NOT CONSIDERED THE CORRECT FACTS ABOUT THE AGRICULTURAL INCOME OF THE ASSESSEE. THE LD. PR.CIT HAS CONSIDERED ONLY 1/3 RD SHARE OF THE ASSESSEE WHEREAS THE ASSESSEE HAS BEEN CULTIVATING AND DOING AGRICULTURAL OPERATIONS OF THE ENTIRE LAND BELONGING TO THE THREE BROTHERS INCLUDING THE ASSES SEE. SINCE THE OTHER TWO BROTHERS ARE NOT LIVING IN THE VILLAGE AND ARE S ETTLED OUTSIDE, THEREFORE, THE ASSESSEE IS CARRYING OUT AGRICULTURA L OPERATIONS ON THE ENTIRE LAND AND THE ENTIRE AGRICULTURAL PRODUCE FRO M THE LAND IN QUESTION WAS THE AGRICULTURAL INCOME OF THE ASSESSEE. THUS, TH E ORDER PASSED BY THE LD. PR.CIT IS ILLEGAL AND BAD IN LAW AND LIABLE T O BE QUASHED. 5. ON THE OTHER HAND, THE LD CIT-DR HAS SUBMITTED T HAT THE LD. PR.CIT HAS SPECIFICALLY POINTED OUT THE DETAILS OF THE HOL DING AND FERTILITY OF THE LAND AS ONE OF THE LAND IS NOT IRRIGATED LAND AND T HEREFORE, THERE IS NO QUESTION OF ANY CROP FROM THE SAID LAND. FURTHER TH E LD. PR.CIT HAS ALSO EXAMINED THE SALE BILLS AND NOTED THAT THE ASSESSEE HAS CLAIMED TO HAVE SOLD 663.88 QUINTALS OF BARLEY AND 316 QUINTALS OF MUSTERED WHICH IS NOT ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 6 POSSIBLE FROM THE LAND HOLDING OF THE ASSESSEE. THE REFORE, IT IS A CLEAR CASE OF LACK OF ENQUIRY ON THE PART OF THE ASSESSIN G OFFICER ON THE ISSUE OF AGRICULTURAL INCOME WHICH IS FOUR TIME MORE THAN THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN THE PRECEDING YEARS. RATES AS CONSIDERED BY THE LD. PR.CIT WERE TAKEN FROM THE APMC AND THEREFORE, SU CH RATES CANNOT BE DISPUTED. HENCE, THE ORDER PASSED BY THE ASSESSING OFFICER WAS SUFFERING FROM ERROR SO FAR AS IT IS PREJUDICIAL TO THE INTER EST OF THE REVENUE FOR NOT CONDUCTING A PROPER ENQUIRY WHILE ACCEPTING THE AGR ICULTURAL INCOME SHOWN BY THE ASSESSEE. HE HAS RELIED UPON THE ORDER OF THE LD. PR.CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THOUGH THE ASSESSING OFFICER HAS MENTIONED IN THE ASSESSMENT ORDER THAT IN RESPONSE TO THE NOTICE ISS UED U/S 142(1) OF THE ACT, THE LD AR ATTENDED THE ASSESSMENT PROCEEDINGS TIME TO TIME AND PRODUCED SALARY CERTIFICATE, DETAILS OF AGRICULTURA L PRODUCE AND ITS RECEIPTS WHICH WERE EXAMINED ON TEST CHECK BASIS. HOWEVER, WE FI ND THAT THE LD. PR.CIT HAS POINTED OUT SPECIFIC FACTS WHICH DEMONSTR ATE THAT THE CLAIM OF THE AGRICULTURAL INCOME OF THE ASSESSEE PRIMA FACIE CANNOT BE ACCEPTED IN THE LIGHT OF THE LAND HOLDING AND THE SALE BILL PRO DUCED BY THE ASSESSEE SHOWING A HUGE YIELD OF THE AGRICULTURAL PRODUCE AMO UNTING 663.88 QUINTALS OF BARLEY AND 316 QUINTALS OF MUSTERED. UN DISPUTEDLY BOTH THESE ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 7 CROPS ARE RABI CROPS AND THEREFORE, THE SAID QUANTI TY OF BARLEY AND MUSTERED FROM THE LAND HOLDING OF THE ASSESSEE IS H IGHLY IMPOSSIBLE. EVEN OTHERWISE IT IS A MATTER OF EXAMINATION AND VERIFICA TION WHEN THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME IN THE PRECEDING Y EAR WHICH WAS ABOUT 1/4 TH OF THE AGRICULTURAL INCOME SHOWN FOR THE YEAR UNDE R CONSIDERATION. SINCE THERE IS NO CHANGE EITHER IN THE LAND HOLDING OR ANY OTHER RELEVANT CIRCUMSTANCES FOR SUCH A HUGE INCREASE IN THE AGRIC ULTURAL YIELD THEN THE MANY FOLDS INCREASED IN THE AGRICULTURAL INCOME CAN NOT BE ACCEPTED IN THE NORMAL COURSE. THE LD. PR.CIT HAS GIVEN THE DETAILS O F THE LAND HOLDING AS WELL AS THE SALE BILLS AS UNDER: ON PERUSAL OF THE JAMABANDI FILED BY THE ASSESSEE I T IS SEEN, HE OWNS L/3 RD LAND IN KHASRA NO.103 WHICH COMES TO 0.19 HECTARES AND 90% OF THIS LAND IS IN KHASRA NO.675, HE OWNS HALF OF THE LAND WHICH CO MES TO 0.285 HECTARES AND IN KHASRA NOS.104 & 98, HE OWNS HALF THE LAND W HICH COMES TO 0.67 HECTARES. HE HAS ALSO FILED THE GIRDAWARI OF FODE LECAR 2069 AND 2070 SHOWING THE EXTENT OF LAND SOWN FOR KHARIF AND RABI CROPS FOR ALL THESE 3 PIECES OF LAND. FODE LECAR 2069 OF HINDU CALENDAR CORRESPONDS TO THE PERIOD FROM 23.03.2012 TO 10.04.2013 OF THE GEORGIAN CALEN DAR AND IS RELEVANT FOR THE FINANCIAL YEAR UNDER CONSIDERATION. IF ONE EXAM INES THE GIRDAWARI PERTAINING TO FODE LECAR 2069, IT IS SEEN THAT TWO CROPS BOTH RABI AND KHAR IF WERE SOWN. THE SEASON FOR KHARIF CROP IS JULY TO OC TOBER AND FOR THE RABI CROP IT IS OCTOBER TO MARCH. ON EXAMINATION OF THE SALE BILLS IT IS SEEN THAT 66 3.88 QUINTALS MILLET ( T ) AND 316.00 QUINTALS MUSTARD ( LJLA ) WAS ALLEGEDLY SOLD BY THE ASSESSEE TO ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 8 RADKHIKA ENTERPRISES. IT IS PERTINENT TO NOTE THAT BOTH MUSTERED AND MILLET ARE RABI CROPS. SOWING OF THESE CROPS HAS BEEN REFL ECTED IN THE GIRDAWARI. THESE CROPS WOULD HAVE BEEN READY FOR HARVESTING IN MARCH 2013. THEREFORE, AS PER GIRDAWARI FODE LECAR 2069 SUBMITTED BY THE ASSESSEE AS EVIDENCE OF AGRICULTURE PRODUCTION BOTH MUSTARD ( LJL ) & MILLET ( T ) WOULD BE AVAILABLE FOR SALE AT BEST IN MARCH 2013 AND NOT FROM APRIL 2 012 TO DECEMBER 2012 FOR WHICH THE SALE BILLS HAVE BEEN GENERATED BY THE ASS ESSEE IN COLLUSION WITH RADHIKA ENTERPRISES. WE FURTHER NOTE THAT THE LD. PR.CIT HAS ALSO CONSIDE RED THE RATES OF VARIOUS GRAINS/AGRICULTURAL PRODUCE AS WELL AS THE A VERAGE PRODUCTION OF THE CROPS AS RECORDED IN THE REVENUE RECORD/GIRDAWAR I. ALL THESE DETAILS HAVE BEEN CONSIDERED BY THE LD. PR.CIT WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE TO REBUT OR REPLY TO THE SAME. THEREFO RE, WE FIND THAT THOUGH THERE WAS MATERIAL BEFORE THE LD. PR.CIT TO IN VOKE THE PROVISIONS OF SECTION 263 OF THE ACT AND HOLDING THAT THE ORDE R PASSED BY THE ASSESSING OFFICER IS ERRONEOUS SO FAR AS IT IS PREJ UDICIAL TO THE INTEREST OF THE REVENUE FOR WANT OF PROPER ENQUIRY ON THE ISSUE OF AGRICULTURAL INCOME SHOWN BY THE ASSESSEE, HOWEVER, SINCE THE LD. PR.CIT H AS ALSO GIVEN THE FINDING OF FACTS BEFORE PASSING THE DIRECTION TO TH E ASSESSING OFFICER FOR FRESH ADJUDICATION AND THE SAID FINDING OF FACT WAS WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSEE. THE FINDING GIVEN BY TH E LD. PR.CIT IS NOW BINDING ON THE ASSESSING OFFICER WHILE PASSING THE ORDER IN PURSUANT TO THE IMPUGNED ORDER. THEREFORE, IN THE FACTS AND CIRC UMSTANCES OF THE CASE ITA 543/JP/2018_ PURSHOTTAM SHARMA VS ITO 9 AND IN THE INTEREST OF JUSTICE, WE MODIFY THE IMPUGN ED ORDER TO THE EXTENT THAT THE ASSESSING OFFICER WHILE PASSING THE FRESH O RDER ON THE BASIS OF VERIFICATION/INVESTIGATION ON THIS ISSUE SHALL NOT BOUND BY THE FACTUAL FINDING GIVEN BY THE LD. PR.CIT IN THE IMPUGNED ORDE R. HENCE, THE ISSUE IS OPEN TO BE ADJUDICATED AFRESH BY THE ASSESSING OFFI CER WITHOUT BEING INFLUENCED BY THE FACTUAL FINDINGS OF ESTIMATION OF AGRICULTURAL INCOME BY THE LD. PR.CIT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. ORDER IS PRONOUNCED IN OPEN COURT ON 07 TH JANUARY, 2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07 TH JANUARY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI PURSHOTTAM SHARMA, SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-4, SIKAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 543/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR