Shri Pramod C. Huchhe, Solapur V. I.T.O. Ward 1(2) Solapr, Solapur

ITA 582/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3331 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 29-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE
• Assessee Lawyers: R N BHATTAD
• Section: 271(1)(c); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI D. KARUNAKARA RAO, AM I.T.A. NO. 582 & 1421/PN/2008 A.Y. 2004-05 & 2003-04 SHRI PRAMOD C. HUCHHE C/O. R.N. BHATTAD & CO. 643 WEST MANGALWAR PETH, SOLAPUR 413 002 PAN AATPH 1280 L APPELLANT VS. THE I.T.O. WARD 1(2) SOLAPUR RESPONDENT APPELLANT BY : SHRI R.N. BHATTAD RESPONDENT BY: SHRI ABHAY DAMLE ORDER PER SHAILENDRA KUMAR YADAV, JM I.T.A. NO. 582/PN/2008 FOR A.Y. 2004-05 THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A)-III PUNE DATED 10-1-2008 FOR A .Y. 2004-05 WITH REGARDS TO ADDITION OF RS. 2,08,475/- TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O FOUND THAT THE ASSESSEE HAS SHOWN INCOME FROM AGRIC ULTURE OF RS. 2,91,790/- WHICH WAS NOT ACCEPTED BY THE A.O AS WELL AS CIT(A). THE SAME HAS BEEN OPPOSED BEFORE US. ITA NO. 582 & 1421/PN/2008 PRAMOD C HUCHHE A.Y. 2004-05 & 2003-04 , 2 3. THE CIT(A) HAS MAINLY RELIED ON HIS DECISION FOR A.Y. 2003-04 WHILE DECIDING THE APPEAL OF THE ASSESSEE. WE FIND IT UNDISPUTED THAT THE ASSESSEE HAS AGRICULTURAL LAND HOLDINGS WHICH IS EVIDENT FROM 7/12 EXTRACT, FILED BEFORE TH E AUTHORITIES BELOW. THE ASSESSEE HAS GROWN CROPS OF SUGARCANE, JAWAR, CHILLI, AMLA ETC. DURING THE YEAR. THE ASSESSEE FI LED COPIES OF BILLS IN RESPECT OF THE SALES MADE IN ORDER TO VERI FY THE GENUINENESS OF THE SALES. THE A.O MADE CORRESPONDE NCE WITH THE PARTIES REFERRED IN THE BILLS. HE FOUND THAT I N MOST OF THE CASES THE LETTERS WERE RETURNED UNSERVED BY POSTAL AUTHORITIES STATING THAT EITHER THE PARTIES WERE NOT TRACEABLE OR ADDRESSES WERE INCOMPLETE. THIS FACT WAS CONFRONTED TO THE A SSESSEE BUT COULD NOT GIVE REPLY TO THE SATISFACTION OF THE A.O . ACCORDINGLY, THE ADDITION WAS MADE BY INVOKING THE PROVISIONS OF SECTION 68 WHICH WAS CONFIRMED BY THE CIT(A). 4. THE STAND OF THE ASSESSEE WAS THAT THE PURCHASER S FROM VARIOUS PLACES COME TO VILLAGE AND PURCHASE THE AGR ICULTURAL PRODUCE. IN CASE THE ASSESSEES AGRICULTURAL PROD UCE ARE PURCHASED BY MOVING PURCHASERS AND PRODUCES ARE NOT SOLD IN THE MARKET THEN THE ASSESSEE HAS NO OPTION EXCEPT T O FILE THE DETAILS OF ADDRESSES ETC. GIVEN ON BEHALF OF THE SA ID PURCHASERS. THIS FACT HAS NOT BEEN VERIFIED BY THE A.O AS WELL AS THE CIT(A). THE AGRICULTURAL HOLDINGS OF THE AS SESSEE HAVE NOT BEEN DISPUTED BY BOTH THE PARTIES. ONCE THE AG RICULTURAL ITA NO. 582 & 1421/PN/2008 PRAMOD C HUCHHE A.Y. 2004-05 & 2003-04 , 3 HOLDINGS ARE USED FOR THE AGRICULTURAL PRODUCE, IT IS BOUND TO BE SOLD EITHER IN THE OPEN MARKET OR TO THE MOVING PURCHASERS. NON-AVAILABILITY OF SUCH PERSONS ON THE GIVEN ADDRE SS SHOULD NOT FALL BACK ON AGRICULTURISTS ADVERSELY. UNDER T HE FACTS AND CIRCUMSTANCES ADDITION IN QUESTION IS NOT JUSTIFIED . SAME IS DIRECTED TO BE DELETED. I.T.A. NO. 1421/PN/2008 FOR A.Y. 2003-04 5. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAIN ST THE ORDER OF THE CIT(A) AGAINST THE PENALTY OF RS. 73,6 70/-. THE A.O FOUND THAT THE ASSESSEE HAS SHOWN INCOME FROM AGRICULTURE OF RS. 4,10,600/-. BEFORE THE A.O, 7/1 2 EXTRACTS IN RESPECT OF AGRICULTURAL HOLDINGS WERE FILED BY THE ASSESSEE ALONG WITH THE STATEMENT SHOWING RECEIPTS OF EACH A GRICULTURAL PRODUCE, THE EXPENSES INCURRED THREEFOR AND THE PRO FIT EARNED THEREFROM. THE A.O OBSERVED THAT APART FROM ABOVE STATEMENT, THE ASSESSEE HAS NOT PRODUCED ANY PROOF IN RESPECT OF THE AGRICULTURAL PRODUCE SUCH AS SALE MEMOS OR ANY RECE IPTS IN RESPECT OF THE EXPENSES CLAIMED. ONLY BILLS PREPAR ED BY HIM WERE PRODUCED WHICH COULD NOT BE CROSS VERIFIED WIT H THE PASS BOOK. THE A.O WAS OF THE VIEW THAT MERE AGRICULTUR AL HOLDING ITSELF, CANNOT BE A PROOF OF AGRICULTURAL INCOME UN LESS SUPPORTED BY PURCHASERS CONFIRMATION OR ANY OTHER ACCEPTABLE PROOF. HE THEREFORE, DID NOT ACCEPT THE CLAIM OF T HE ASSESSEE THAT HE HAS EARNED AGRICULTURAL INCOME OF RS. 4,10, 600/- ITA NO. 582 & 1421/PN/2008 PRAMOD C HUCHHE A.Y. 2004-05 & 2003-04 , 4 DURING THE YEAR AND TREATED THIS AMOUNT AS INCOME F ROM OTHER SOURCES WHICH RESULTED IN AN ADDITION OF RS. 4,10,6 00/-. CONSEQUENTLY PENALTY WAS INITIATED WHICH WAS CONFIR MED BY THE CIT(A). THE SAME HAS BEEN OPPOSED BEFORE US. 6. WE FIND THAT IT IS UNDISPUTED THAT THE ASSESSEE HAS AGRICULTURAL HOLDING WHICH IS EVIDENT FROM 7/12 EXT RACTS FILED ON BEHALF OF THE ASSESSEE. THE AGRICULTURAL ACTIVI TIES ON THE LAND IN QUESTION HAVE NOT BEEN DISPUTED. THE ASSES SEE HAS SHOWN INCOME OF RS. 4,10,600/- AND THE SAME HAS BEE N REJECTED IN ABSENCE OF PURCHASERS CONFIRMATION. T HE AGRICULTURAL INCOME CANNOT BE FALSIFIED IN THE ABSE NCE OF CONFIRMATION BY THE PURCHASERS. THE AGRICULTURAL I NCOME AND THE AGRICULTURAL HOLDINGS CAN BE REJECTED ON THE GR OUND THAT NO AGRICULTURAL ACTIVITY TOOK PLACE IN THE AGRICULT URAL HOLDINGS IN QUESTION AT RELEVANT POINT OF TIME. THE REVENUE HAS NOT MADE OUT A CASE THAT NO AGRICULTURAL ACTIVITY WAS C ARRIED OUT BY THE ASSESSEE IN THE AGRICULTURAL HOLDINGS. THER E MAY BE A CASE OF INFLATION OF AGRICULTURAL INCOME BUT IT CAN NOT BE SAID THAT NO AGRICULTURAL INCOME HAS ACCRUED TO THE ASSE SSEE. THE AGRICULTURAL HOLDING OF THE ASSESSEE IS NOT DISPUTE D BY BOTH THE PARTIES. EVEN THE REJECTION OF AGRICULTURAL IN COME BY THE A.O AND PARTIAL RELIEF BY THE CIT(A) DOES NOT JUSTI FY THE PENALTY FOR SUSTAINING THE ADDITION. WITHOUT PREJUDICE TO THE MERITS OF THE CASE, WE ARE OF THE VIEW THAT EVEN IF ADDITION IS MADE WITH REGARDS TO QUANTUM ON ESTIMATE BASIS AFTER REJECTIN G THE CLAIM ITA NO. 582 & 1421/PN/2008 PRAMOD C HUCHHE A.Y. 2004-05 & 2003-04 , 5 OF THE ASSESSEE, PARTIALLY SUSTAINING THE ADDITION MADE ON THE BASIS OF ESTIMATE, CANNOT BE THE SOUND BASIS FOR LE VYING THE PENALTY UNDER THE PROVISIONS OF SECTION 271(1)(C) O F THE ACT. THE CIT(A) HAS GIVEN PARTIAL RELIEF TO THE ASSESSEE WHICH SHOWS THAT THE ASSESSEE WAS HAVING AGRICULTURAL INCOME ON THE LAND IN QUESTION. THE ADDITION MADE AND SUSTAINED ON ES TIMATE BASIS CANNOT BE A SOUND BASIS FOR LEVYING THE PENAL TY U/S 271(1)(C). ACCORDINGLY, THE PENALTY IS DIRECTED TO BE DELETED. 7. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER 2010. SD/- SD/- (D. KARUNAKARA RAO) (SHAILENDRAKUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE,DATED THE 23 RD SEPTEMBER 2010 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT- IV PUNE (4) CIT(A)-III PUNE (5) THE D.R. A' BENCH, PUNE TRUE COPY BY ORDER, ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE