E.Rukmani, CHENNAI V. ACIT, Tiruppur

ITA 590/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77365 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 590/MDS/2014 ( / ASSESSMENT YEAR: 2009-10) MRS. E.RUKMANI, W/O. LATE R.ESWARAMURTHY 95B, SRINIVASAPURAM MAIN ROAD, AVINASHI-641 654 VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, TIRUPUR. PAN: ADSPR7139L ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. SHAJI P.JACOB, ADDL. CIT / DATE OF HEARING : 7 TH MAY, 2014 /DATE OF PRONOUNCEMENT : 27 TH JUNE, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COI MBATORE DATED 31.12.2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THE FIRST ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFICER TO ADD BACK ` 6,92,450/- AS NON-AGRICULTURAL INCOME ON ESTIMATION. 2 ITA NO. 590/MDS/20 14 3. BRIEF FACTS ARE THAT ASSESSING OFFICER WHILE COM PLETING THE ASSESSMENT REQUIRED THE ASSESSEE TO PRODUCE REC ORDS IN SUPPORT OF AGRICULTURAL INCOME REPORTED BY THE ASSE SSEE ON BANANA SALES AT ` 21,92,450/-. AS THE ASSESSEE COULD NOT PRODUCE RECORDS/DETAILS, THE SAID INCOME WAS TREATE D AS NON- AGRICULTURAL INCOME AND BROUGHT TO TAX. ASSESSEE PR EFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS), WHO AFTER CONSIDERING THE SUBMISSIONS AND DETAILS F URNISHED BY THE ASSESSEE ESTIMATED THE GROSS AGRICULTURAL RE CEIPTS FROM SALE OF BANANA CULTIVATED IN 26.57 ACRES AT ` 15,00,000/- AND TREATED THE BALANCE AMOUNT OF ` 6,92,450/- AS NON- AGRICULTURAL INCOME. 4. COUNSEL FOR THE ASSESSEE REITERATING THE SUBMISS IONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS ) SUBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) I S NOT JUSTIFIED IN ESTIMATING BANANA SALES ONLY AT ` 15,00,000/- WITHOUT APPRECIATING THE SUBMISSIONS OF THE ASSESSE E THAT ASSESSEE GOT 19,130 NUMBERS OF BUNCHES OF BANANA YI ELD AND AVERAGE RATE PER BUNCH OF BANANA WAS SOLD AT ` 115/- AND THUS ASSESSEE EARNED INCOME OF ` 21,92,450/- FROM SALE 3 ITA NO. 590/MDS/20 14 OF BANANA. COUNSEL FOR THE ASSESSEE SUBMITS THAT AV ERAGE RATE OF BANANA BUNCH SOLD AT ` 115/- IS VERY MUCH REASONABLE AND IT IS NOT ON HIGHER SIDE. THEREFORE, HE SUBMITS THAT AGRICULTURAL INCOME REPORTED FROM BANANA SALES AT ` 21,92,450/- MAY BE ACCEPTED. 5. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES IN ESTIMATING THE AGRICULTURAL IN COME AT ` 15,00,000/- BY THE COMMISSIONER OF INCOME TAX (APPE ALS). DEPARTMENTAL REPRESENTATIVE SUBMITS THAT NO EVIDENC E WAS PRODUCED BY THE ASSESSEE IN SUPPORT OF HER CLAIM TH AT AVERAGE RATE OF A BUNCH OF BANANAS WAS SOLD AT ` 115/- AND THEREFORE ESTIMATION MADE BY THE COMMISSIONER OF IN COME TAX (APPEALS) MAY BE SUSTAINED. 6. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONS IDERING THE DETAILS FURNISHED BY THE ASSESSEE ESTIMATED BAN ANA SALES AT ` 15,00,000/- OBSERVING AS UNDER:- A PERUSAL OF THE DOCUMENT PRODUCED BY THE ASSESSEE AND THE PREVI OUS ORDERS PASSED BY COMMISSIONER OF INCOME TAX (APPEALS) AND INCOME TA X APPELLATE 4 ITA NO. 590/MDS/20 14 TRIBUNAL IT IS EVIDENT THAT THE ASSESSEE IS ENGAGED IN LARGE SCALE AGRICULTURAL OPERATIONS AND THEREFORE G ROSS AMOUNT OF BANANA RECEIPTS CANNOT BE DISALLOWE D. HOWEVER, RESTRICTING THE EXPENSES TO 35% OVER AGRICULTURAL OPERATIONS CANNOT BE ACCEPTED AS BANAN A CULTIVATION REQUIRE LARGE SCALE MANPOWER, IRRIGATI ON FACILITIES, FERTILISERS AND PESTICIDES. HOWEVER, TH E ASSESSEE HAS NOT PROVED BY ANY INDEPENDENT EVIDENCE TO SHOW THAT THE SALE OF BANANA BUNCHES WERE SOLD AT ` 115/- PER BUNCH. IN THE ABSENCE OF ANY RECEIPTS FOR SALE IT WOULD BE DIFFICULT FOR THE ASS ESSING OFFICER TO VERIFY THE CORRECTNESS OF THE CLAIM MADE IN THIS REGARD. MERE ENTRIES IN THE ASSESSEE'S BOOKS O F ACCOUNT WILL NOT SATISFY THE CONDITION FOR ACCEPTIN G THE GROSS AGRICULTURAL INCOME. THEREFORE, CONSIDERING THE NATURE OF AGRICULTURAL OPERATIONS AND THE LIKELY RE CEIPTS FROM THE SAME I WOULD ESTIMATE THE GROSS AGRICULTUR AL RECEIPTS TO 15 LAKHS FROM THE SALE OF BANANA CULTIVATED IN 26.57 ACRES AND THE BALANCE AMOUNT OF ` 6,92,450/- WILL BE TREATED AS NON-AGRICULTURAL INCO ME. 7. IT COULD BE SEEN FROM THE ABOVE OBSERVATIONS OF THE COMMISSIONER OF INCOME TAX (APPEALS) THAT HE HAS CO ME TO THE CONCLUSION AFTER EXAMINING THE ORDERS OF HIS PR ECEDENT AND THE TRIBUNAL IN ASSESSEES CASE THAT ASSESSEE IS ENGAGED IN LARGE SCALE AGRICULTURAL OPERATIONS AND THEREFORE GROSS AMOUNT OF BANANA RECEIPTS CANNOT BE TREATED AS NON- AGRICULTURAL INCOME. HOWEVER, HE RESTRICTED AGRICUL TURAL INCOME TO ` 15,00,000/- FROM THE SALE OF BANANA CULTIVATED IN 26.57 ACRES ON THE GROUND THAT EXPENSES TAKEN BY T HE ASSESSEE AT 35% OF GROSS RECEIPTS FOR AGRICULTURAL OPERATIONS OF BANANA CANNOT BE CORRECT AS BANANA CULTIVATION R EQUIRE 5 ITA NO. 590/MDS/20 14 LARGE SCALE MANPOWER, IRRIGATION FACILITIES, FERTIL IZERS AND PESTICIDES. THE COMMISSIONER OF INCOME TAX (APPEALS ) ALSO OBSERVED THAT ASSESSEE HAS NOT PROVED OR PLACED ANY INDEPENDENT EVIDENCE TO SHOW THAT ASSESSEE HAS SOLD BANANA BUNCHES AT ` 115/- PER BUNCH. THEREFORE, HE ESTIMATED THE AGRICULTURAL INCOME TO BE AT ` 15,00,000/- AS AGAINST ` 21,92,450/- REPORTED BY THE ASSESSEE. BEFORE US ALSO EXCEPT STATING THAT BANANA BUNCHES WERE SOLD AT ` 115/- PER BUNCH, THE ASSESSEE COULD NOT PRODUCE ANY EVIDE NCE TO SHOW THAT SHE SOLD BANANA BUNCH AT ` 115/-. TAKING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES INTO CONSID ERATION, THE GROSS AGRICULTURAL RECEIPTS FROM SALE OF BANANA IS ESTIMATED AT ` 18,00,000/- INSTEAD OF ` 21,92,450/- REPORTED BY THE ASSESSEE. THE DIFFERENCE AMOUNT OF ` 3,92,450/- SHALL BE CONSIDERED AS NON-AGRICULTURAL INCOME. 8. THE NEXT ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN SUSTAINING THE DISALLOWANCE OF ` 1,55,474/- BEING EXPENSES INCURRED THROUGH BANKING CHANNEL FOR WANT OF FURTHER EVIDENCE. BRIEF FACTS ARE THAT ASSESSEE IS ENGAGED IN 6 ITA NO. 590/MDS/20 14 THE REAL ESTATE BUSINESS AND IN THE COURSE OF BUSIN ESS ASSESSEE CLAIMED THAT SHE HAS PAID ` 1,55,474/- FOR THE DEVELOPMENT OF SITES. THE ASSESSEE CLAIMED THAT THE SE PAYMENTS WERE MADE TO LAND DEVELOPERS AND CLAIMED AS EXPENSES INCURRED TOWARDS LAND DEVELOPMENT. THE ASSESSING OFFICER DISALLOWED THESE EXPENSES AS THE ASSESSEE COULD NOT FURNISH PAYMENT DETAILS, THESE E XPENSES WERE TREATED AS UNEXPLAINED EXPENSES BY THE ASSESSI NG OFFICER. ON APPEAL, COMMISSIONER OF INCOME TAX (AP PEALS) SUSTAINED THE DISALLOWANCE OBSERVING THAT ASSESSEE DID NOT PRODUCE NAMES AND ADDRESSES OF PERSONS TO WHOM THES E PAYMENTS WERE MADE AND THE REASONS FOR PAYMENT WITH EVIDENCE EVEN IN THE PROCEEDINGS BEFORE HIM. 9. COUNSEL FOR THE ASSESSEE REITERATES THE SUBMIS SIONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS ). EVEN BEFORE US NO EVIDENCE WAS PRODUCED TO ESTABLIS H THAT THESE PAYMENTS WERE MADE FOR LAND DEVELOPMENT AND N O DETAILS WERE FURNISHED AS TO WHOM THESE PAYMENTS WE RE MADE EXCEPT STATING THAT THE SAID PAYMENTS WERE MAD E TO LAND DEVELOPERS INCURRED FOR LAND DEVELOPMENT. IN S UCH 7 ITA NO. 590/MDS/20 14 CIRCUMSTANCES, WE UPHOLD THE ORDERS OF LOWER AUTHOR ITIES AND REJECT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON THIS ISSUE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 27 TH DAY OF JUNE, 2014 AT CHENNAI. SD /- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) . ( ' )* ) ACCOUNTANT MEMBER / , JUDICIAL MEMBER/ ) , ) /CHENNAI, - /DATED, 27 TH JUNE, 2014 SOMU /0 10 /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 2 () /CIT(A) 4. 2 /CIT 5. 0 6 /DR 6. /GF .