Late Suvarnadevi Vikramsinh Aparadh, L/h. Shri V H Aparadh, Kolhapur V. Assistant Commissioner of Income-tax,

ITA 630/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1536 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income
• Section: 69C; 143(3); 68

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM / ITA NO.629/PN/2015 ! ' ' / ASSESSMENT YEAR : 2009-10 REKHADEVI VIKRAMSINH APARADH, C/O P.G. DIWAN, 334 E WARD, TRADE CENTRE, STATION ROAD, KOLHAPUR 416 001 . / APPELLANT PAN: AARPA5359F VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 2, KOLHAPUR . RESPONDENT / ITA NO.630/PN/2015 ! ' ' / ASSESSMENT YEAR : 2009-10 LATE SUVARNADEVI VIKRAMSINH APARADH, L/H VIKRAMSINH HINDURAO APARADH, C/O P.G. DIWAN, 334 E WARD, TRADE CENTRE, STATION ROAD, KOLHAPUR 416 001 . / APPELLANT PAN: ABDPA5164H VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 2, KOLHAPUR . RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI SUHAS KULKARNI, JCIT ITA NO.629/PN/2015 ITA NO.630/PN/2015 2 DATE OF HEARING : 18.07.2016 / DATE OF PRONOUNCEMENT: 22.07.2016 # / ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY THE TWO DIFFERENT ASSESSE ES ARE AGAINST THE SEPARATE ORDERS OF CIT(A)-1&2, KOLHAPUR, BOTH DATED 12.02.2015 RELATING TO SAME ASSESSMENT YEAR I.E. A.Y. 2009-10 AGAINST THE RESPECTIVE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BOTH THE CAPTIONED APPEALS RELATED TO TWO CONNEC TED ASSESSEES ON SIMILAR ISSUES WERE HEARD TOGETHER AND ARE BEING DI SPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HO WEVER, REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ITA NO.629/PN/2015 RELATING TO ASSESSMENT YEAR 2009-10 TO ADJUDICATE THE ISSUE. 3. THE ASSESSEE IN ITA NO.629/PN/2015 HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL :- 1. THE HON. COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN CONFIRMING PARTLY THE ADDITION MADE BY THE A.O. AT RS.4,39,736 /- AT RS.3,00,000/-. 2. THE HON. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN DRAWING THE CONCLUSION THAT DUE TO THE POSSIBILITY OF SHOWING I NFLATED EXPENDITURE THE ADDITION HAS TO BE CONFIRMED PARTLY AT RS.3,00,000/ -. 3. THE HON. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN DISREGARDING THE STATEMENT OF PROFIT & LOSS ACCOUNT AND THE DOCU MENTARY EVIDENCE PRODUCED BEFORE THE A.O. IN SUPPORT OF THE AGRICULT URAL PROFIT BY THE ASSESSEE. ITA NO.629/PN/2015 ITA NO.630/PN/2015 3 4. THE HON. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN NOT ACCEPTING THE BOOK PROFIT AT 64.86% AND ESTIMATING THE SAME O N ESTIMATED AND AD-HOC BASIS. 5. I PRAY FOR YOUR KIND PERMISSION TO ADD NEW GROUN DS OF APPEAL OR MODIFY THEM AT ANY TIME BEFORE THE APPEAL ORDER IS PASSED. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4,85,650/-. TH E ASSESSEE WAS AN INDIVIDUAL AND WAS A DIRECTOR IN V.H. APARADH HOTEL S PVT. LTD. AND HAD DECLARED INCOME FROM SALARY, HOUSE PROPERTY AND OTHER SOURCE S. AS PER THE ITS DETAILS RECEIVED, THE ASSESSEE HAD DEPOSITED CASH OF RS.20, 40,000/- IN HIS SAVING BANK ACCOUNT WITH THE RATNAKAR BANK LTD.. THE ASSE SSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE COULD NOT FILE PROPER EXPLA NATION AND ADDITION OF RS.20,40,000/- WAS MADE UNDER SECTION 68 OF THE ACT . FURTHER, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD SHOWN AGRICULTU RAL INCOME OF RS.19,18,932/-. THE ASSESSEE WAS ASKED TO PRODUCE THE COPY OF 7/12 EXTRACTS, COPY OF SALE BILLS OF AGRICULTURAL PRODUCE SOLD AND DETAILS REGARDING EXPENDITURE INCURRED. THE ASSESSEE FURNISHED THE DETAILS OF AG RICULTURAL PRODUCE SOLD. THE ASSESSEE WAS MAINTAINING A JOINT ACCOUNT ALONG WITH OTHER FAMILY MEMBERS, WHO WERE THE JOINT OWNERS OF THE AGRICULTURAL LAND AT DIFFERENT AREAS. AS PER THE RECORD FURNISHED BY THE ASSESSEE, THE ASSESSING OFF ICER NOTES THAT THE ASSESSEE AND HER FAMILY MEMBERS WERE CULTIVATING IR RIGATED AGRICULTURAL LAND. THE ASSESSING OFFICER OBSERVED THAT AS PER THE OPIN ION OF THE AGRICULTURAL EXPERTS THERE MUST BE 50% EXPENDITURE INCURRED ON G ROSS RECEIPTS. HOWEVER, THE ASSESSEE HAD SHOWN ONLY 35.76% EXPENDITURE, WHI CH AS PER THE ASSESSING OFFICER WAS ON VERY LOWER SIDE. THE ASSESSING OFFI CER NOTED THE SALE OF VARIOUS AGRICULTURAL PRODUCE BY THE ASSESSEE I.E. ON ACCOUN T OF SUNFLOWER, CHIKKU, CUSTARD APPLE, GRAPHS, GUAVA, MANGO, POMEGRANATES, GROUNDNUTS, HARBHARA, MAIZE, SUGARCANE, WHEAT, LEMON, SHEVAGA, ETC.. ON THE VERIFICATION OF SALE ITA NO.629/PN/2015 ITA NO.630/PN/2015 4 BILLS OF THE AGRICULTURAL PRODUCE SOLD, THE ASSESSI NG OFFICER OBSERVED THAT MOST OF THE BILLS FOUND WERE SELF MADE AND NO DETAILS WE RE AVAILABLE REGARDING THE PURCHASERS AND THEREFORE THE SAME COULD NOT BE VERI FIED. THE ASSESSING OFFICER FURTHER OBSERVED THAT MOREOVER POSSIBILITY OF SHOWING THE INFLATED AGRICULTURAL INCOME CANNOT BE RULED OUT . IN VIEW THEREOF, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE EXPENDITURE FOR AGRICULTUR AL OPERATIONS SHOULD BE 50% OF THE GROSS AGRICULTURAL RECEIPT OF RS.29,58,393/- . THEREFORE, ADDITION OF RS.4,39,736/- WAS MADE UNDER SECTION 69C OF THE ACT . 5. THE CIT(A), ON THE OTHER HAND, WAS OF THE VIEW T HAT SINCE THE DETAILS REGARDING THE PURCHASES WERE NOT FULLY AVAILABLE AN D THE SAME WERE NOT VERIFIABLE, THERE WAS SOME SUBSTANCES IN SAYING THA T THERE WAS POSSIBILITY OF SHOWING INFLATED EXPENDITURE. THE CIT(A), HOWEVER, RESTRICTED THE ADDITION OF RS.3,00,000/- IN THE ABSENCE OF THE ASSESSING OFFIC ER NOT GIVEN ANY REASON WHY 50% OF EXPENDITURE SHOULD BE INCURRED IN CASE OF AG RICULTURAL ACTIVITY. 6. THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID ADDITION OF RS.3,00,000/-. 7. ON THE EARLIER DATE OF HEARING, THE COUNSEL FOR THE ASSESSEE HAD MOVED AN APPLICATION FOR ADJOURNMENT AND THE APPEAL WAS F IXED FOR HEARING ON 18.07.2016. HOWEVER, ON THE APPOINTED DATE OF HEAR ING, NONE APPEARED ON BEHALF OF THE ASSESSEE AND BECAUSE OF THE SMALLNESS OF ISSUE, IT IS PROCEEDED TO DECIDE THE PRESENT APPEAL AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. ITA NO.629/PN/2015 ITA NO.630/PN/2015 5 8. ON THE PERUSAL OF RECORD AND AFTER HEARING THE L D. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, IT IS APPARENT THAT THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE ESTIMATION OF THE EXPENDITURE INCURRED FOR CARRYING OUT THE AGRICULTURAL ACTIVITY. THE OTHER ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE CIT(A) AGAINST WHICH THE REVENUE HAS NOT BROUGHT ON RECORD ANY EVIDENCE AS TO THE PENDENCY OF ANY AP PEAL. 9. THE ONLY OTHER ISSUE IS THE ADDITION MADE ON ACC OUNT OF AGRICULTURAL INCOME. THE ASSESSEE ALONG WITH HER FAMILY MEMBERS WERE OWNING SEVERAL PIECES OF LAND AND THE COPY OF THE 7/12 EXTRACTS WA S FILED BEFORE THE ASSESSING OFFICER AND ALSO THE COPY OF SALE BILLS OF THE AGRI CULTURAL PRODUCE SOLD BY THE ASSESSEE WAS PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER NOTED THAT THE SALE BILLS WERE SELF MADE BUT NO ADD ITION WAS MADE ON ACCOUNT OF THE SALE VALUE DECLARED BY THE ASSESSEE. HOWEVER, SINCE THE ASSESSEE DID NOT FURNISH THE DETAILS OF PURCHASERS, THE ASSESSING OF FICER WAS OF THE VIEW THAT 50% OF THE EXPENDITURE SHOULD BE INCURRED ON CARRYI NG OUT SUCH ACTIVITIES AND THEREFORE AN ESTIMATION WAS MADE OF THE AGRICULTURA L EXPENDITURE AT RS.19,18,932/-. THE ASSESSEE, IN TURN, HAD INCURRE D EXPENDITURE OF RS.14,79,196/- AND HENCE THE ASSESSING OFFICER MADE AN ADDITION OF RS.4,39,736/- ON ACCOUNT OF INFLATED AGRICULTURAL I NCOME. THE CIT(A) RESTRICTED THE ADDITION OF RS.3,00,000/- ONLY. IN THE FACTS A ND CIRCUMSTANCES OF THE CASE, WHERE THE ASSESSEE CLAIMS THAT IT HAD INCURRED EXPE NDITURE TOTALING TO RS.14,79,196/- AND HAD ACCORDINGLY DECLARED THE AGR ICULTURAL INCOME IN HIS HANDS AND WHERE THE AGRICULTURAL RECEIPTS ARE NOT D OUBTED, THERE IS NO MERIT IN ESTIMATING THE EXPENDITURE IN THE HANDS OF THE ASSE SSEE. THE AD-HOC ESTIMATION OF EXPENDITURE MADE BY THE ASSESSING OFF ICER AND THE CIT(A) IS NOT MERITED IN THE ABSENCE OF ANY CONTRARY EVIDENCE BRO UGHT ON RECORD. THE ITA NO.629/PN/2015 ITA NO.630/PN/2015 6 DISALLOWANCE OF THE AGRICULTURAL EXPENDITURE HAS BE EN MADE ON ESTIMATE BASIS ONLY. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANC ES OF THE CASE, THERE IS NO MERIT IN SUCH ESTIMATION OF AGRICULTURAL EXPENDITURE AND HENCE NO MERIT IN ANY DISALLOWANCE OF THE AGRICULTURAL EXPENDITURE. THE CLAIM OF THE ASSESSEE MERITS TO BE ALLOWED IN THE ENTIRETY AND THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AT RS.19,18,932/- MERITS TO BE ASSESSED AS INCOME FROM AGRICULTURE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE TH US, ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.629/PN/2015 RELATING TO ASSESSMENT YEAR 2009-10 IS ALLOWED. 11. THE FACTS AND ISSUES IN ITA NO.630/PN/2015 ARE IDENTICAL TO ITA NO.629/PN/2015 AND MY DECISION IN ITA NO.629/PN/201 5 SHALL APPLY MUTATIS- MUTANDIS TO ITA NO.630/PN/2015. THUS, THE APPEAL OF THE AS SESSEE IN ITA NO.630/PN/2015 RELATING TO ASSESSMENT YEAR 2009-10 IS ALSO ALLOWED. 12. RESULTANTLY, BOTH THE APPEALS OF THE RESPECTIVE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 22 ND DAY OF JULY, 2016. SD/- (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 22 ND JULY, 2016 . ! ITA NO.629/PN/2015 ITA NO.630/PN/2015 7 #$%&'()(& / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; ' ' # () THE CIT(A)-1&2, KOLHAPUR; ' ' # THE CIT-II, KOLHAPUR &'( ))*+, ' *+ , , - . // / DR SMC, ITAT, PUNE; (01 2 / GUARD FILE. #! / BY ORDER & ) // TRUE COPY // 345 )! *6 / SR. PRIVATE SECRETARY ' *+ , ITAT, PUNE