N Radha Krishna Reddy, Hyderabad V. DCIT, Hyderabad

ITA 586/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9839 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2010
• Court: TRIBUNAL
• Department Lawyers: AMLAN TRIPATHY
• Assessee Lawyers: T UMAKANTH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.586/HYD/10 (ASSESSMENT YEAR 2 006-07) SHRI N.RADHA KRISHNA REDDY, HYDERABAD ( PAN AAXPN 3282 G ) V/S. DY. COMMISSIONER OF INCOME-TAX, CIRCLE 3(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.UMA KANTH RESPONDENT BY : SHRI AMLAN TRIPATHY O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2006- 07 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME -TAX (APPEALS). 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ONLY EFFECTIVE GROUND OF APPEAL OF THE ASSESSEE IS GROUND OF A PPEAL NO.3, WHICH IS REPRODUCED BELOW- 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) IV, HYDERABAD IS NOT CORRECT IN CONFIRMING THE ADDITION OF RS.2,49,0300 TOWARDS DISALLOWANCE OF 50% AGRICULTUR AL INCOME AS INCOME FROM OTHER SOURCES EVEN THOUGHT THE APPEL LANT SUBMITTED DETAILS AND PROOF OF AGRICULTURAL INCOME. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS.4,98,060 AND THE ASSESSI NG OFFICER WITHOUT ANY VALID REASON DISALLOWED 50% THEREOF, TO T HE EXTENT OF RS.2,49,030 AND ASSESSED THE SAME AS INCOME FROM OTHER SOURCE S. HE SUBMITTED THAT THE ASSESSEE HAS CULTIVATED ABOUT 90 ACRES O F LAND, OUT OF ITA NO.586./HYD/10 SHRI N.RADHA KRISHNA REDDY, HYDERABAD 2 WHICH HE OWNED ABOUT 9.2 ACRES OF AGRICULTURAL LAND AND HAS, IN ADDITION, TAKEN 82 ACRES OF LAND ON LEASE FROM VARIOUS PERSONS. HE SUBMITTED THAT THE ASSESSEE HAS FILED FULL DETAILS OF AGRICULTURAL INCOME ETC . AND DETAILS OF LEASE AGREEMENT WERE ALSO FILED WITH THE ASSESSING OFFICER. HE SUBMITTED THAT THE AGRICULTURAL INCOME DECLARED AT RS.4,57,400 FOR THE ASSESSM ENT YEAR 2003-04 AND THE AGRICULTURAL INCOME DECLARED AT RS.4,75,600 FOR THE ASSESSMENT YEAR 2004-05 WERE ACCEPTED BY THE ASSESSING OFFICER IN SCRUTINY A SSESSMENTS FRAMED UNDER S.143(3) OF THE ACT. FOR THE ASSESSMENT YE AR 2005-06 AND SUBSEQUENT ASSESSMENT YEAR 2007-08, ASSESSEE DECLARED AGRICUL TURAL INCOMES OF RS.4,80,800 AND RS.5,07,260 RESPECTIVELY, WHICH WERE ALSO ACCEPTED BY THE ASSESSING OFFICER IN SUMMARY ASSESSMENTS UNDER S.143(1) OF THE ACT. 4. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL RE PRESENTATIVE HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSE E AND RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). HE SUBMITTED THAT THE PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS. HE SUBMITTED THAT THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME ON ESTIMATE BASIS AND THE ASSESSING OFFICER HAS RECORDED THAT THE ASSESSEE COULD NOT FULLY SUBSTANTIATE THE AGRICULTURAL INCOME OR THE EXPENSES IN R ELATION THERETO AND THEREFORE, 50% AGRICULTURAL INCOME WAS ASSESSED AS INCOME FR OM OTHER SOURCES BY THE ASSESSING OFFICER. HE RELIED ON A SERIES OF D ECISIONS, WHICH ARE AS UNDER- (A) CIT V/S. R.VENKATA SWAMY NAIDU (1956) 29 ITR 529 -SC (B) SRI RANGANATHA ENTERPRISES V/S. CIT (1998) 232 ITR 538(KAR) (C) RIDHKARANDAS POONAMCHAND BHURA V/S. CIT (1996) 231 TR 604- -(MP) (D) GOPI RAM LILA V/S. CIT (1997) 225 ITR 320 (RAJ) (E) CIT V/S. CACUTT AGENCY LTD. (1950) 19 ITR 191(SC) (F) AVDESH KUMAR JAIN V/S. CIT (1989)178 ITR 443(ALL) ITA NO.586./HYD/10 SHRI N.RADHA KRISHNA REDDY, HYDERABAD 3 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND T HAT MATERIAL FACTS OF THE CASE ARE NOT IN DISPUTE. THE ASSESSEE HAS CULTIV ATED ABOUT 90 ACRES OF AGRICULTURAL LAND, OUT OF WHICH ABOUT 9.22 ACRE S OF AGRICULTURAL LAND WAS OWNED BY HIM AND ABOUT 82 ACRES OF AGRICULTURAL LAN D WAS TAKEN ON LEASE BY THE ASSESSEE FROM OTHERS. AGRICULTURAL INCOME DECLARED A T RS.4,98,060 COULD NOT BE SAID TO BE EXCESSIVE IN VIEW OF THE LARGE E XTENT OF LAND CULTIVATED BY THE ASSESSEE. ASSESSING OFFICER HAS NOT GIVEN A NY SPECIFIC REASON FOR MAKING THE DISALLOWANCE OUT OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE, BUT HAS ASSESSED 50% OF THE AGRICULTURAL INCOME UNDE R THE HEAD INCOME FROM OTHER SOURCES BY OBSERVING THAT THE ASSESSEE CO ULD NOT FULLY SUBSTANTIATE THE AGRICULTURAL INCOME OR EXPENSES IN RELAT ION THERETO. THE CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON SIMILAR GROUNDS THAT THE ASSESSING OFFICER HAS NOT MAINTAINED ANY SALE BIL L OR ANY DETAILS REGARDING THE EXPENSES INCURRED FOR AGRICULTURAL OPERAT IONS. WE FIND THAT THE DEPARTMENT COULD NOT CONTROVERT THE SUBMISSIONS OF THE A SSESSEE THAT HE HAS ABOUT 9.22 ACRES OF AGRICULTURAL LAND AND IN ADDITION, ABOUT 82 ACRES OF AGRICULTURAL LAND WAS TAKEN ON LEASE BY HIM FROM OTHER S. THE ASSESSEE HAS ALSO FIELD COPIES OF LEASE DEEDS/AGREEMENTS IN COMPILATIO N FILED BEFORE US IN EVIDENCE OF ITS CASE. WE FIND THAT IN SCRUTINY ASSESSMENTS F RAMED UNDER S.143(3) OF THE ACT, THE DEPARTMENT ITSELF HAS ACCEPTED AGRICULTURAL INCOMES DECLARED BY THE ASSESSEE AT RS.4,57,400 FOR THE ASSESSMENT Y EAR 2003-04 AND AT RS.4,75,600 FOR THE ASSESSMENT YEAR 2004-05. FOR THE ASSESSMENT YEAR 2005-06, THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AT RS.4,80,800 AND FOR THE ASSESSMENT YEAR 2007-08 AGRICULTU RAL INCOME DECLARED BY THE ASSESSEE AT RS.5,07,260, WERE ACCEPTED BY THE DEPARTMENT IN SUMMARY ASSESSMENT. THERE IS NO VALID REASON FOR TAKING A DIFFERENT STAND BY THE DEPARTMENT IN THE MATTER OF ASSESSMENT OF AGRICUL TURAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AT RS.4,98,060 FOR THE ASSESSMENT YEAR 2006-07 IS QUITE REASO NABLE AND ITA NO.586./HYD/10 SHRI N.RADHA KRISHNA REDDY, HYDERABAD 4 ACCORDINGLY THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. WE ORDER ACCORDINGLY . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 11.2.2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 11.2.2011 COPY FORWARDED TO: 1. SHRI N.RADHA KRISHNA REDDY, C/O. MURTHY & KANTH, CHARTERED ACCOUNTANTS, FLAT NO.113, SOVEREIGN SHELTERS, 11-4-650 NILOUFER HOSPITAL ROAD, HYDERABAD 500 004. 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE 3(1), HYDERAB AD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-IV, HYDERABAD 4. COMMISSIONER OF INCOME-TAX III HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S