ITO, Nashik V. Shri Ghanshyam Bhagwandas Kriplani., Nashik

ITA 68/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1125 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SUNITA BILLA
• Assessee Lawyers: PRAMOD SHINGTE P SINGH
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Competent authority; Capital expenditure
• Section: 40A(3)

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , . . , $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.68/PN/2013 & & / ASSESSMENT YEAR : 2009-10 ITO, WARD-1(3), NASHIK . / APPELLANT V/S SHRI GHANSHYAM BHAGWANDAS KRIPLANI, KRUSHNA KRUPA, SUNDERBAN COLONY, MAGH SOCIETY, BHUJBAL FAR, CIDCO, NASHIK PAN NO. AGMPK1476A . / RESPONDENT / APPELLANT BY : MRS. SUNITA BILLA / RESPONDENT BY : SHRI PRAMOD SHINGTE P. SINGH / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 12-10-2012 OF THE CIT(A)-I, NASHIK RELATING TO ASS ESSMENT YEAR 2009-10. 2. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS UNDER : 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS.32,25,325/- OUT OF THE TOTAL ADDITION MADE BY THE AO AT RS.32,47,843/-. / DATE OF HEARING : 23.06.2015 / DATE OF PRONOUNCEMENT:11.09.2015 2 ITA NO.68/PN/2013 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 03-10-2010 DECLARING TOTA L INCOME OF RS.1,63,540/- AND AGRICULTURAL INCOME OF RS.17 LAKHS. THE ASSESSEE IS RUNNING A DAIRY FARM AND A RESTAURANT. THE RESTAURANT IS STARTED AS A PROPRIETARY CONCERN DURING THE YEAR. T HE INCOME FROM THE DAIRY BUSINESS IS DECLARED AT RS.3,85,919/- AND FROM TH E RESTAURANT BUSINESS AT RS.21,505/- THE ASSESSEE HAD D ECLARED AGRICULTURAL INCOME OF RS.17 LAKHS. NO SEPARATE RECORDS AR E MAINTAINED IN RESPECT OF AGRICULTURAL INCOME. HOWEVER, IT WA S SUBMITTED THAT THE GROSS RECEIPTS FROM AGRICULTURE IS RS.2 4,00,240/- AND THE EXPENDITURE IS RS.7 LAKHS. 4. THE AO SUMMONED THE ASSESSEE AND RECORDED HIS STA TEMENT U/S.131 OF THE I.T. ACT. THE AO ASKED THE ASSESSEE TO SUBSTANTIATE HIS AGRICULTURAL INCOME IN ABSENCE OF MAINTENANCE OF ANY REC ORDS. THE ASSESSEE IN RESPONSE TO QUERY NO.5 OF THE AO REPLIE D THAT THE SAME HAS BEEN DECLARED ON THE BASIS OF CERTIFICATE ISSUED BY THE TAHSILDAR WHO HAD ISSUED THE SAME ON THE BASIS OF INFORMAT ION PROVIDED BY THE TALATI. THE AO AGAIN IN QUESTION NO. 26 ASKED THE ASSESSEE TO EXPLAIN AS TO HOW HE HAD DECLARED THE AGRICULTURAL INCOM E OF RS.17 LAKHS IN THE RETURN FILED ON 03-02-2010 WHEN THE CERTIFICATE HAS BEEN ISSUED BY TAHSILDAR ON 19-12-2010. IT WAS REP LIED BY THE ASSESSEE THAT HE HAD APPLIED FOR THE CERTIFICATE ON 19-0 1-2010 AND THE CERTIFICATE WAS ISSUED ON 19-12-2010. IN VIEW OF THE ABOVE, THE AO WAS OF THE OPINION THAT THE ASSESSEE HAS NOT PRODU CED ANY EVIDENCE EXCEPT THE CERTIFICATE ISSUED BY THE TAHSILDAR. 5. FROM THE PAST RECORDS, THE AO NOTED THAT THERE IS INCREASE OF AGRICULTURAL INCOME BY RS. 2 LAKHS SINCE F.Y. 2006-07 WHERE AS THERE 3 ITA NO.68/PN/2013 IS NO INCREASE IN THE LAND HOLDING OF THE ASSESSEE. THE A SSESSEE HAS ALSO NOT INCURRED ANY CAPITAL EXPENDITURE TO INCREASE THE OUTPUT OF THE AGRICULTURAL PRODUCE. THE AO ENQUIRED FROM THE OFFICE O F THE TAHSILDAR AND CAME TO THE CONCLUSION THAT SUCH INCOME CE RTIFICATES ARE ISSUED ON THE BASIS OF AFFIDAVITS FILED BY THE APPLICANTS. 6. THE AO NOTED FROM THE CERTIFICATE THAT THE SAME MENT IONS THE DATE OF THE AFFIDAVIT OF THE APPLICANT. THE AO IN HIS QUESTION NO.15 OF THE STATEMENT RECORDED U/S.131 ASKED THE ASSESSEE AS TO WHAT ARE THE RECORDS PRODUCED BEFORE TAHSILDAR ON THE BASIS OF WH ICH HE HAS CERTIFIED THE AGRICULTURAL INCOME. IT WAS EXPLAINED BY THE A SSESSEE THAT 7/12 ABSTRACT OF THE AGRICULTURAL LAND HELD BY THE A SSESSEE WAS PROVIDED TO THE TAHSILDAR. ON THE BASIS OF THE AREA UNDE R CULTIVATION, THE CROPS CULTIVATED AND AFTER PERSONAL INSPECTION BY THE TALATHI THE AMOUNT OF AGRICULTURAL INCOME HAS BEEN CERTIFIED. 7. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE TH E AO NOTED THAT THE CERTIFICATE ISSUED BY THE TAHSILDAR REFERS TO THE OPINION GIVEN BY THE TALATI AT NASHIK WHEREAS THE ASSESSEE IS LO CATED AT DUGAON WHERE THERE IS SEPARATE TALATI. THE TALATI OF NASH IK IS IN NO WAY CONCERNED WITH THE DUGAON LAND. FURTHER, IN THE A.Y . 2008-09 THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME OF RS.3,63,00 0/- WHICH IS CONSIDERED IN THE CAPITAL ACCOUNT AS WELL AS WHILE C OMPUTING THE TAX LIABILITY. AS AGAINST THIS IN THE CERTIFICATE ISSUED BY THE TAHSILDAR THE AGRICULTURAL INCOME WAS STATED TO BE RS.15 LA KHS FOR A.Y. 2008-09. IN VIEW OF THE ABOVE, THE AO DISBELIEVED THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. CONSIDERING THE LAND HOLDING OF THE ASSESSEE AND THE AGRICULTURAL INCOME DECLARE D IN THE PRECEDING YEAR AT RS.3,63,000/- THE AO HELD THAT AN AMOU NT OF 4 ITA NO.68/PN/2013 RS.3,50,000/- ON ESTIMATE BASIS IS THE REASONABLE AGRICULTUR AL INCOME FOR THE IMPUGNED ASSESSMENT YEAR. HE THEREFORE H ELD THAT THE BALANCE AMOUNT OF RS.13,50,000/- IS THE SUPPRESSED BUSINES S INCOME FROM THE DAIRY BUSINESS INTRODUCED BY THE ASSESSE E IN THE GUISE OF AGRICULTURAL INCOME. HE ACCORDINGLY MADE ADDITION O F RS.13,50,000/-. 8. SIMILARLY, THE AO NOTED THAT AT THE BEGINNING OF THE YE AR THE ASSESSEE HAD 98 LIVE STOCK. THROUGHOUT THE YEAR, THERE IS ADDITION OF 42 LIVE STOCK. DESPITE THERE BEING ADDITION TO THE LIVE STO CK, THE TOTAL SALES FROM THE DAIRY BUSINESS HAS INCREASED ONLY BY RS.1 0,000/- DURING THE YEAR AS COMPARED TO THE IMMEDIATELY PRECEDIN G ASSESSMENT YEAR. ACCORDING TO THE AO, INSTEAD OF THE BU SINESS INCOME RISING DUE TO ADDITION OF LIVE STOCK THERE IS FIVE FOLD RISE IN HIS AGRICULTURAL INCOME DESPITE THERE BEING NO ADDITION TO AGRIC ULTURAL LAND OR THE METHOD OF CULTIVATION. THIS, ACCORDING TO THE AO , CLEARLY INDICATES THAT THE ASSESSEE HAS SUPPRESSED HIS INCOME FR OM DAIRY BUSINESS WHICH IS TAXABLE AND INTRODUCED THE SAME IN THE GUISE OF AGRICULTURAL INCOME WHICH IS EXEMPT FROM INCOME-TAX. 9. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE TH E AO NOTED THAT THE ASSESSEE HAS NOT MAINTAINED ANY DETAILS REGARDING THE DAY-TO-DAY OUTPUT OF MILK. THERE IS NO BIFURCATION REGARDIN G THE AMOUNTS REALIZED FROM SALE OF MILK AND SALE OF MANURE. MOST OF THE EXPENSES IN RESPECT OF CATTLE FEED IS ALSO NOT SUPPORTE D BY PROPER EVIDENCE. THE MEDICAL EXPENSES DEBITED AT RS.26,825/- DID NOT JUSTIFY THE FIGURE OF NON-MILK LIVE STOCK CLAIMED. THE AO ISS UED SUMMONS TO THE ASSESSEE AND RECORDED HIS STATEMENT A CCORDING TO WHICH THE AVERAGE DAILY OUTPUT OF MILK FROM BUFFALOES IS AROU ND 8 TO 5 ITA NO.68/PN/2013 10 LITRES. HE ALSO OBTAINED THE OPINION OF THE ASSISTANT COMMISSIONER OF ANIMAL HUSBANDRY, VETERINARY POLY, NASIK WHO STATED TH AT THE AVERAGE DAILY OUTPUT IS AROUND 9 LITRES PER DAY. THE AO OBSERVED THAT THE ASSESSEE HAD 98 LIVE STOCK AT THE BEGINNING OF THE YEAR. THES E LIVE STOCK WILL LACTATE FOR 8 MONTHS DURING THE YEAR. IN VIEW OF THIS FACT MILK OUTPUT FOR 8 MONTHS CAN BE EXPECTED FROM THESE 98 LIVESTOCK WHICH COMES TO 2,11,680 LITRES. CONSIDERING THE AVERAGE SE LLING PRICE OF RS.27.50 PER LITRE THE REALIZATION FROM SALES WORKS OUT T O RS.58,21,200/-. FURTHER, THE AO NOTED THAT THE ASSESSEE HAD PURCHASED 4 BUFFALOES ON 30-06-2008, 9 BUFFALOES ON 27-10- 2008, 10 BUFFALOES ON 30-11-2008, 4 BUFFALOES ON 15-03-2009, 10 BUFFALO ES ON 17-03-2009. THE AO ALSO CONSIDERED THE MILK OUTPUT FROM THESE BUFFALOES DURING THE YEAR UNDER CONSIDERATION AND WORKED OUT THE SALE FIGURE OF RS.68,07,289/-. CONSIDERING THE SALE OF MILK AT RS.35,59,446/- COMPUTED BY THE ASSESSEE THE AO HELD THA T ASSESSEE HAS SUPPRESSED RECEIPT FROM SALE OF MILK BY RS.32,47,843/-, (I.E ., RS.68,07,289 (-) RS.35,59,446/-). SINCE PART OF THE AGRICULTU RAL INCOME WAS TREATED BY THE AO AS NON-AGRICULTURAL INCOME THE AO MADE ADDITION OF RS.18,97,843/- BEING THE DIFFERENCE BETWEEN RS.32,47,843/- AND RS.13,50,000/-. 10. BEFORE CIT(A) IT WAS SUBMITTED THAT THE ASSESSEE IS HA VING APPROXIMATELY 8.38 ACRES OF LAND IN WHICH HE HAS GROWN R ICH CROPS SUCH AS TOMATO AND GRAPES. AS PER ACCEPTED TRADE P RACTICE AGRICULTURAL PRODUCE WAS SOLD ON AS-IS-BASIS, I.E. SPOT SALE. THEREFORE, NO DOCUMENTARY EVIDENCE IS GENERATED IN RESPE CT OF AGRICULTURAL ACTIVITIES. THEREFORE, THE CERTIFICATE OF THE TAHS ILDAR WAS SUBMITTED TO THE AO AS A PROOF OF INCOME FROM AGRICULTURA L ACTIVITY UNDER THE GIVEN SITUATION. THE TAHSILDAR IS THE ONLY PERSO N WHO CAN 6 ITA NO.68/PN/2013 MAKE PROPER ASSESSMENT OF THE INCOME OF THE ASSESSEE. THEREFORE, THE AO IS NOT JUSTIFIED IN SIMPLY BRUSHING ASIDE THE CERT IFICATE ISSUED BY THE TAHSILDAR. IT WAS SUBMITTED THAT THE TAHSILDAR IS AN EXPERT PERSON TO FAIRLY ESTIMATE THE AGRICULTURAL INCOME DEPEND ING UPON THE ACTUAL CULTIVATION, CROP PATTERN, NATURE OF SOIL, MARKET RAT ES, YIELD ETC. THE AO IS NOT JUSTIFIED IN SUBSTITUTING HIS VIEWS IN PLACE O F SUCH EXPERT PERSON. THE CERTIFICATE ISSUED BY THE TAHSILDAR W AS ON THE BASIS OF VERIFICATION OF THE AGRICULTURAL LAND BY THE TALATI PE RSONALLY. THEREFORE, THE CONTENTION OF THE AO THAT THE TALATI AT NA SHIK IS IN NO WAY CONCERNED WITH THE LAND OF THE ASSESSEE LOCATED AT DUGAON WHEREAS THERE IS SEPARATE TALATI IS ALSO NOT WITHOUT AUTH ORITY BECAUSE IT IS FOR THE TAHSILDAR OR TALATI TO DECIDE HOW TO GET VERIFIC ATION OF THE LAND DONE AND THE VERIFICATION OF LAND CANNOT BE CARRIED OU T AS PER WHIMS OF THE AO. IT WAS FURTHER STATED THAT WHETHER TH E TALATI AT NASHIK WAS AUTHORIZED TO CARRY OUT VERIFICATION OF THE LAN D OR NOT IS A SEPARATE ISSUE. 11. SO FAR AS THE ADDITION OF RS.18,97,843/- ON ACCOUNT OF IN COME FROM DAIRY BUSINESS IS CONCERNED, IT WAS SUBMITTED THAT TH E AO HAS TAXED THE GROSS RECEIPTS AND NOT PROFIT THEREON. IT WA S ARGUED THAT DURING 2000-01 THERE WERE SURVEYS CARRIED OUT BY THE DEPARTMENT ON SOME OF THE DAIRY OWNERS WHO WERE HAVING MORE THAN 200 TO 400 CATTLE. IT WAS PROVED BEYOND DOUBT THAT THE DIARIES DO NOT HAVE EVIDENCE IN RESPECT OF OUTPUT OF MILK BECAUSE THE SAME IS UNORGANIZED SECTOR. THE AO HAS NOT CONSIDERED THE USE OF MILK BY THE LABOURERS TO WHOM DAILY 1 LITRE MILK/LABOURER IS GIVEN B Y ALMOST ALL THE DIARIES IN NASHIK, WASTAGE OF MILK BECAUSE OF MANY RE ASONS HAS NOT BEEN CONSIDERED BY THE AO. THE CONSUMPTION O F MILK BY CALVES, CONSUMPTION OF MILK BY THE OWNERS WERE IGNORED BY THE AO. 7 ITA NO.68/PN/2013 FURTHER, THERE ARE MANY OTHER INSTANCES BECAUSE OF WHIC H THE OUTPUT OF MILK OR SALES IS CURTAILED HAS ALSO NOT BEEN CONSIDERED. THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL WHEREIN THE EST IMATION OF INCOME FROM MILK/CATTLE AT RS.3,750/- PER YEAR WHEN THE SA LE RATE WAS RS.23.25 PER LITRE WAS BROUGHT TO THE NOTICE OF THE C IT(A). IT WAS SUBMITTED THAT IN THE PRESENT CASE THE INCOME PER CATT LE ASSESSED BY THE AO COMES TO RS.49,307/-. IT WAS ARGUED THAT IF THE RATE OF RETURN IN CASE OF DAIRY FARM AS DETERMINED BY THE AO IS ACCEPTED , THEN EVERYBODY WOULD START DAIRY FARMING BUSINESS. IT WAS AR GUED THAT THE ASSESSEE IN THE INSTANT CASE HAS DISCLOSED INCOME AT RS.4 ,824/- PER CATTLE PER YEAR WHICH IS MORE THAN REASONABLE. IT WAS A CCORDINGLY ARGUED THAT THE ADDITION OF RS.18,97,843/- MADE BY THE AO ON ACCOUNT OF SUPPRESSION OF RECEIPTS FROM SALE OF MILK SHOULD B E DELETED. 12. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION ON ACCOUNT OF AGRICULTURAL INCO ME AT RS.13,50,000/- BY OBSERVING AS UNDER : 6.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, THE ASSESSMENT ORDER AND SUBMISSIONS ON BEHALF OF THE APPELLANT. IT IS UNDISPUTED FACT THAT THE APPELLANT IS HAVING AGRICULTURAL LAND UNDER CULTIVATION AND HE HAS TAKEN RICH CROPS THEREIN. THE APPELLANT HAS DISCLOSE D HIGHER AGRICULTURAL INCOME AT RS. 17,00,000/- AS AGAINST THE SAME AT RS. 3,63,000/- IN THE PRECEDING YEAR. IT APPEARED FROM THE RECORD THAT THE HIGHER AGRICULTURAL INCOME SHOWN BY THE APPELLANT CR EATED SUSPICION IN THE MIND OF THE AO. AND, THEREFORE, HE CARRIED OUT VERIFICATION OF THE SAME. THE A.O. ALSO ISSUED SUMMONS TO THE APPELLANT AND RECORDED HIS DETAILED STATEMENT ON 21/11/2011. IT ALSO APPEARED TH AT BECAUSE OF THE SUBSTANTIAL RISE IN THE AGRICULTURAL INCOME AS DISCLOSED BY THE APPELLANT, THE AO., WITHOUT CRITICALLY EVALUATING FACTS OF THE CASE AND MATERIAL AVAILABLE ON RECORD, DREW ADVERSE INFERENCE AND REJE CTED THE CONTENTIONS OF THE APPELLANT WITHOUT ANY VALID REASONS. THE SPOT SA LE SYSTEM PARTICULARLY IN CASE OF SALE OF GRAPES IS KNOWN AND AC CEPTED PRACTICE. THE AO. IS NOT JUSTIFIED IN BRUSHING ASIDE THE CERTIFICATE OF THE TAHSILDAR WITHOUT BRINGING ON RECORD THAT THE CONTENTS THEREI N AREA FALSE. INFACT THE TAHSILDAR IS MORE COMPETENT AUTHORITY TO ESTIMATE THE AGRICULTURAL INCOME BECAUSE THE CERTIFICATE IS ISSUED BY HIM ON THE BASIS OF ACTUAL VISIT TO FIELD BY THE TALATHI, UNDERSTANDING OF NATURE, QU ANTUM AND QUALITY OF CROPS GROWN AND THE MARKET RATES DURING THE RELEVANT PERIOD. THERE IS 8 ITA NO.68/PN/2013 NO LAW WHICH COMPELS AGRICULTURIST TO MAINTAIN THE BO OKS OF ACCOUNT OR BILLS/VOUCHERS, ETC. IN RESPECT OF AGRICULTURAL ACTIVI TY. THE AO. IN THE COURSE OF ASSESSMENT PROCEEDINGS ALSO ISSUED THE SUMMONS TO THE APPELLANT, WHEN THE APPELLANT WAS COOPERATING IN THE ASSESSMENT PROCEEDINGS. THE ACTION OF THE AO. IN REJECTING THE CERTIFICATE OF TAHSILDAR WITHOUT CONFRONTING HIM IS ILLEGAL PARTICULARLY WHEN THE CERTIFICATE IS ISSUED BY A GOVERNMENT AUTHORITY UNDER THE POWERS GRAN TED TO HIM. IT IS NOT THE CASE OF A.O. THAT THE AGRICULTURAL INCOME AS DISCLOSED BY THE APPELLANT CANNOT BE EARNED IN THE GIVEN CIRCUMSTANCE S. THE APPELLANT HAS ALSO FURNISHED THE APPROXIMATE QUANTITY OF CROPS P RODUCED IN EACH OF HIS AGRICULTURAL FIELD, WHICH IS ALSO NOT FOUND TO BE UNREASONABLE. THE SALE RATES AS STATED BY THE APPELLANT OF THE CROPS ARE A LSO NOT FOUND TO BE UNREASONABLE. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, THE IMPUGNED ADDITION MADE BY THE AO. OF RS. L3,50,000/- IS HEREBY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 13. SO FAR AS THE ADDITION OF RS.18,97,843/- MADE BY THE A O ON ACCOUNT OF SUPPRESSION OF RECEIPTS FROM SALE OF MILK HE SUS TAINED ONLY AN AMOUNT OF RS.22,518/- AND DELETED THE BALANCE AMOUNT BY OBSERVING AS UNDER : 7.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ACTION OF THE AO. IN TAXING THE SALE PROCEEDS OF SALE OF MILK INSTEAD OF PR OFIT THEREON IS PRIMA FACIE INCORRECT. THE CONTENTIONS OF THE LD. AR. AS RE GARDS MISTAKES ON THE PART OF THE A.O. IN NOT CONSIDERING THE CUSTOMARY DIST RIBUTION OF MILK TO THE LABOURERS WORKING IN THE DAIRY OF THE APPELLANT, THE WASTAGE OF MILK BECAUSE OF MANY REASONS, THE CONSUMPTION OF MILK BY THE CALVES, HOME CONSUMPTION OF MILK BY THE APPELLANT. FURTHER, THE A SSUMPTION OF THE AO. THAT EVERY CATTLE IS YIELDING EVEN MILK THROUGHOUT T HE PERIOD OF EIGHT MONTHS OF LACTATION IS ALSO WRONG BECAUSE THE YIELD OF MILK AT THE END OF LACTATION GETS REDUCED. THE OUTPUT OF MILK AS CONSIDER ED BY THE AO. AT 9 LTRS. IS IN RESPECT OF PROFESSIONAL DAIRIES WHERE THE CA TTLE AT THE END OF LACTATION ARE REPLACED BY MILCH CATTLE. IT IS ALSO AC CEPTED FACT THAT THE APPELLANT HAS NOT MAINTAINED PROPER RECORD OF PRODUC TION OF MILK, EXPENSES, ETC. IN SUCH CIRCUMSTANCES THERE IS NO ALTERNAT IVE OTHER THAN TO FAIRLY ESTIMATE THE INCOME FROM DAIRY BUSINESS. IT IS A LSO PERTINENT THAT THE A.O. HAS NOT CORRELATED THE IMPUGNED ADDITION WI TH ANY UNACCOUNTED INVESTMENT OR UNACCOUNTED EXPENDITURE. THEREFORE, T HE TURNOVER ESTIMATED BY THE A.O. SHALL REQUIRED TO BE CORRECTED CONSIDERING THE USAGE OF MILK BY THE LABOURERS, WASTAGE OF MILK DUE TO PILFERAGE, SPOILING, ETC. CONSUMPTION OF MILK BY CALVES, HOME CONSUMPTION BY THE APPELLANT AND ALSO FALSE ASSUMPTION OF A.O. THAT THE BUFFALOES PUR CHASED DURING THE YEAR STARTED PRODUCING MILK FROM THE SAME DAY BECAUSE MILCH CATTLE ARE NORMALLY NOT SOLD AS THE CALVES ARE ATTACHED TO THEM. THE LD. A.R. HAS FAIRLY ADMITTED THAT THE REASONABLE ESTIMATE MAY BE M ADE KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES. THEREFO RE, I DIRECT TO GIVE DEDUCTION OF 25% FROM THE TURNOVER ESTIMATED BY THE A.O. AT RS.68,07,289/- AND IT WOULD BE FAIR TO ESTIMATE NET P ROFIT @8% THEREON, WHICH COMES TO RS.4,08,437/- AS AGAINST ESTIMATED BY THE A.O. AT RS.32,47,843/-. THE ASSESSEE HAS SHOWN INCOME FROM THIS SO URCE AT RS.3,85,919/-. THEREFORE, DIFFERENCE OF RS.4,08,437/ - (-) RS.3,85,919/- = 9 ITA NO.68/PN/2013 RS.22,518/- IS DIRECTED TO THE ADDED. CONSEQUENTLY TH E IMPUGNED ADDITION OF RS.32,47,843/- IS REDUCED TO RS.22,518/-/. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 14. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 15. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSE D THE ORDER OF THE CIT(A). HE SUBMITTED THAT WHEN THE AGRICULTU RAL INCOME WAS DECLARED AT RS.3,63,000/- IN A.Y.208-09 AND THERE IS NO INCREASE IN THE LAND HOLDING BY THE ASSESSEE THE AGRICULTURAL INCOME OF RS.17 LAKHS DECLARED DURING THE YEAR IS NOT JUSTIFIED. HE SUBMITT ED THAT THE ASSESSEE ON THE BASIS OF REPORT FROM A DIFFERENT TALATI OBT AINED THE AGRICULTURAL INCOME CERTIFICATE FROM THE TAHSILDAR. HOW AND WHY HE APPROACHED A DIFFERENT TALATI IS NOT KNOWN. SO FAR AS INC OME FROM SALE OF MILK IS CONCERNED THE LD. DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT THE ASSESSEE ADMITTEDLY HAS NOT MAINTAI NED ANY BOOKS OF ACCOUNT. WHEN THERE WAS AN INCREASE OF 42 B UFFALOES DURING THE YEAR THE INCREASE IN SALE OF MILK WAS ONLY RS.10,000/- FOR THE ENTIRE YEAR AS COMPARED TO THE PRECEDING ASSESSMENT Y EAR. HE SUBMITTED THAT IT IS A COMMON KNOWLEDGE THAT THE RATE OF MILK INCREASES EVERY YEAR. THEREFORE, THE ASSESSEE WAS NOT JUSTIFIED IN SHOWING SUCH SUPPRESSED SALE OF MILK. IT IS A CLEAR CASE O F DIVERTING THE BUSINESS INCOME IN THE GUISE OF AGRICULTURAL INCOME WHICH IS EXEMPT FROM TAX AND PART OF THE INCOME HAS BEEN SUPPRE SSED BY REDUCING THE SALE PROCEEDS. HE ACCORDINGLY SUBMITTED T HAT THE ORDER OF THE AO BE RESTORED AND THAT OF THE ORDER OF THE CIT(A) BE REVERSED. 16. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). REFERRING TO THE GROUND TAKEN BY THE REVENUE HE SUBMITTED THAT THE DEPARTMENT HAS NOT TAK EN ANY SPECIFIC 10 ITA NO.68/PN/2013 GROUND ON ACCOUNT OF AGRICULTURAL INCOME. HE SUBMITTED TH AT THE ORDER OF THE CIT(A) IS JUSTIFIED SINCE HE HAS ACCEPTED THE CERTIFICATE ISSUED BY TAHSILDAR WHO IS AN EXPERT IN GIVING OPINION ABOUT THE AGRICULTURAL INCOME BASED ON THE VERIFICATION BY THE TALATI. SO FAR AS THE INCOME FROM SALE OF MILK IS CONCERNED HE SUBMITTED THAT THERE ARE VARIOUS REASONS FOR WHICH THE ESTIMATION MADE BY THE AO CANNOT BE ACCEPTED. HE SUBMITTED THAT THE LABOURERS ARE PROVIDED WITH ONE LITRE OF MILK PER DAY. THERE IS WASTAGE OF MILK DUE TO VARIOUS RE ASONS AND CONSUMPTION OF MILK BY THE CALVES AS WELL AS BY THE FAMILY MEMBERS HAS BEEN COMPLETELY IGNORED BY THE AO. HE SUBMITTED T HAT THE ORDER OF THE CIT(A) IS A REASONED ONE, THEREFORE, THE SAME SHOULD BE UPHELD. 17. THE LD. DEPARTMENTAL REPRESENTATIVE IN HIS REJOINDER SUBMITTED THAT THE AGRICULTURAL INCOME AS WELL AS THE INCOM E FROM DAIRY BUSINESS IS INTERLINKED. THE TOTAL DISALLOWANCES BY THE AO ON ACCOUNT OF SALE OF MILK WAS AT RS.32,47,843/-. SINCE THE AO HAS CONSIDERED AGRICULTURAL INCOME OF RS.3,50,000/- ONLY THE B ALANCE AMOUNT OF RS.13,50,000/- WAS TREATED AS BUSINESS INCOME INTRODUCED AND THE BALANCE AMOUNT OF RS.18,97,843/- WAS S EPARATELY ADDED. THEREFORE, THE LD. COUNSEL IS NOT CORRECT IN SAYING THAT THE REVENUE HAS NOT TAKEN ANY GROUND ON ACCOUNT OF AGRICULTURAL INCOME . 18. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND IN THE INSTANT CASE THE AO DETERMINED THE AGRICULTURAL INCOME OF RS.3,50,000/- AS AG AINST RS.17 LAKHS DECLARED BY THE ASSESSEE AND CONSIDERED THE BALANCE AS PART OF BUSINESS INCOME OF THE ASSESSEE WHICH HE HAS SUP PRESSED BY INFLATING THE AGRICULTURAL INCOME. FURTHER, SINCE THE ASSESSE E HAD 11 ITA NO.68/PN/2013 DECLARED THE INCOME FROM DAIRY BUSINESS AT RS.3,85,919/- TH E AO CONSIDERING THE NON MAINTENANCE OF BOOKS OF ACCOUNT AND NUMBER OF BUFFALOES OWNED BY THE ASSESSEE AT THE BEGINNING OF THE Y EAR AS WELL AS PURCHASES DURING THE YEAR DETERMINED SALE FROM MILK A T RS.68,07,289/-. AFTER REDUCING THE SALE DETERMINED BY THE ASSESSEE AT RS.35,59,446/- THE AO DETERMINED THE SUPPRESSION OF SA LE AT RS.32,47,843/-. SINCE HE HAS ALREADY CONSIDERED PART OF TH E AGRICULTURAL INCOME AS BUSINESS INCOME, I.E. RS.13,50,000/-, THEREFORE, HE MADE ADDITION OF THE BALANCE AMOUNT OF RS.18,9 7,843/-. THUS HE MADE TOTAL ADDITION OF RS.32,47,843/- WE FIND THE L D.CIT(A) RELYING ON THE CERTIFICATE PRODUCED BY THE ASSESSEE FRO M THE TAHSILDAR DELETED THE ADDITION MADE BY THE AO ON ACCOUNT OF AGRICU LTURAL INCOME OF RS.13,50,000/-. SO FAR AS THE INCOME FROM DAIRY B USINESS IS CONCERNED, THE LD.CIT(A) SUSTAINED AN AMOUNT OF RS.22,518 /- OUT OF ADDITION OF RS.18,97,843/- MADE BY THE AO. IT IS THE GRI EVANCE OF THE REVENUE THAT THE LD.CIT(A) RESTRICTED THE ADDITION OF RS.32,47,843/- MADE BY THE AO TO RS.22,518/- WITHOUT ANY VALID REASONS. 19. SO FAR AS THE AGRICULTURAL INCOME IS CONCERNED IT IS AN ADMITTED FACT THAT AS AGAINST RS.3,63,000/- DECLARED BY THE ASSESS EE DURING A.Y. 2008-09 THE SAME HAS BEEN SHOWN AT AN ASTRONOMICA LLY HIGH FIGURE OF RS.17 LAKHS DURING THE IMPUGNED ASSESSMENT YEAR. THE LAND HOLDING OF 8.5 ACRES HAS NOT UNDERGONE ANY CHANGE. SINCE THERE IS NO ADDITION TO THE AGRICULTURAL LAND DURING THE YEAR, THE REFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. DEPARTMENTAL REPRES ENTATIVE THAT WHEN THERE IS NO CHANGE IN THE CROPPING PATTERN O R NO INCREASE IN THE HOLDING OF THE AGRICULTURAL LAND, THE AMOUNT OF AGRIC ULTURAL INCOME DECLARED AT RS.17 LAKHS CANNOT BE ACCEPTED. NO D OUBT THE 12 ITA NO.68/PN/2013 ASSESSEE HAS FILED A CERTIFICATE FROM THE TAHSILDAR FOR THE I MPUGNED ASSESSMENT YEAR SHOWING THE AGRICULTURAL INCOME AT RS.17 LAKHS. HOWEVER, THE SAME CANNOT BE SACROSANCT. FROM THE ORD ER OF THE AO WE FIND THE ASSESSEE HAS ALSO OBTAINED A CERTIFICATE FROM THE TAHSILDAR FOR A.Y. 2008-09 AT RS.15 LAKHS AS AGRICULTURAL INCOME WHERE AS HE HAD DECLARED THE AGRICULTURAL INCOME IN HIS RETURN OF INCOME AT RS.3,63,000/-. FURTHER, THE ASSESSEE HAS OBTAINED THE CE RTIFICATE FROM A TALATI WHO IS NOT THE TALATI FOR THE LAND SITUATED AT DUGAON. THE RELEVANT OBSERVATION OF THE AO IN THE BODY OF THE AS SESSMENT ORDER READ AS UNDER : ON PERUSAL OF THE INFORMATION CONTAINED IN THE CERT IFICATE ISSUED BY THE TAHSILDAR IT IS NOTICED THAT THE CERTIFICATE REFERS TO THE OPINION GIVEN BY THE TALATHI NASHIK. ASSESSEES LAND IS LOCATED AT DUGAO N, WHERE THERE IS SEPARATE TALATHI. THE TALATHI, NASHIK IS IN NO WAY CO NCERNED WITH THE DUGAON LAND. ASSESSEE THEREFORE APPEARS TO HAVE MANAGED TO GET THE CERTIFICATE ISSUED FOR BEING MISUSED. 4. THE VERY CRUCIAL ASPECT TO BE NOTED IS THAT IN TH E RETURN OF INCOME FILED FOR A.Y. 2008-09 ASSESSEE HIMSELF HAS DECLARED AGRI CULTURAL INCOME AT RS.3,63,000/-, WHICH IS CONSIDERED IN THE CAPITAL A CCOUNT, AS WELL AS, WHILE COMPUTING THE TAX LIABILITY. AS AGAINST THIS IN THE CERTIFICATE ISSUED BY THE TAHSILDAR THE AGRICULTURAL INCOME IS STATED TO BE RS.15,00,000/- FOR A.Y. 2008-09. AS MENTIONED IN EARLIER POINTS ASSSESSE E HAS FILED INCORRECT INFORMATION BEFORE THE TAHSILDAR AND MANAG ED TO OBTAIN THE INCOME CERTIFICATE. IN VIEW OF THIS FACT THE CERTIF ICATE ISSUED BY THE TAHSILDAR CANNOT BE ACCEPTED AS AN EVIDENCE TO PROVE THE GENUINENESS OF THE AGRICULTURAL INCOME. COPY OF B/S OF A.Y. 2008- 09 ANNEXED AS EXHIBIT. 20. THEREFORE, WHEN IN HIS OWN ADMISSION THE ASSESSEE DE CLARED AGRICULTURAL INCOME AT RS.3,63,000/- IN A.Y. 2008-09 AS AGAINS T THE AGRICULTURAL INCOME CERTIFICATE OF RS.15 LAKHS OBTAINED FROM THE TALSILDAR, THEREFORE, IN ABSENCE OF ANY INCREASE IN LAND HOL DING AND PATTERN OF CROPPING THE AGRICULTURAL INCOME AT RS.17 LAKHS BY NO STRETCH OF IMAGINATION CAN BE ACCEPTED. THEREFORE, THE CIT(A) IN OUR OPINION WAS NOT JUSTIFIED IN ACCEPTING THE SUBMISSIONS MADE BY THE ASSESSEE REGARDING THE EXTENT OF AGRICULTURAL INCOME DECLA RED BY THE ASSESSEE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CI T(A). HOWEVER, 13 ITA NO.68/PN/2013 CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, DETERMINA TION OF NET AGRICULTURAL INCOME OF RS. 4 LAKHS UNDER THE FACTS AND CIRCU MSTANCES OF THE CASE IN OUR OPINION WILL MEET THE ENDS OF JUSTICE. W E HOLD AND DIRECT ACCORDINGLY. THE BALANCE AMOUNT OF RS.13 LAKHS WILL H AVE TO BE TREATED AS INCOME FROM OTHER SOURCES. 21. NOW COMING TO THE EXTENT OF SALE OF MILK FROM DAIRY BUSIN ESS IS CONCERNED WE FIND AS AGAINST THE SALE FIGURE OF RS.35,59,446/ - STATED BY THE ASSESSSEE THE AO DETERMINED THE SAME AT RS.68,0 7,289/-. WHILE DOING SO, HE CONSIDERED THE 98 LIVE STOCK AT THE B EGINNING OF THE YEAR WHICH WILL GIVE MILK @ 9 LITRES PER DAY FOR 8 MONTHS IN A YEAR. HE ALSO CONSIDERED THE BUFFALOES PURCHASED DURING THE YEA R NUMBERING TO 37. THE WHOLE EXERCISE IN OUR OPINION IS BASE D ON ASSUMPTIONS AND SURMISES. ALTHOUGH AS PER THE STATEMEN T OF THE ASSISTANT COMMISSIONER OF ANIMAL HUSBANDRY, NASHIK, THE AVER AGE DAILY OUTPUT IS ASSESSED AS 9 LITERS PER DAY, HOWEVER, I T CANNOT BE UNIFORMLY ADOPTED FOR ALL THE BUFFALOES FOR A CONTINUOUS PERIO D OF 8 MONTHS. CONSIDERING THE RATE OF MILK AT RS.27.50 PER LITRE A ND OTHER SURROUNDING CIRCUMSTANCES NET INCOME OF RS.6,000/- PER CA TTLE PER YEAR IN OUR OPINION IN THE GIVEN FACTS AND CIRCUMSTANCES O F THE CASE WILL BE REASONABLE. SINCE THE ASSESSEE HAD 98 LIVE STOCK AT THE BEGINNING OF THE YEAR AND HAD PURCHASED 4 BUFFALOES ON 30 -06-2008, 9 BUFFALOES ON 27-10-2008, 10 BUFFALOES ON 30-11-2008, 4 BU FFALOES ON 15-03-2009 AND 10 BUFFALOES ON 17-03-2009 NET INCOME OF RS.6,52,000/- IN OUR OPINION WILL BE REASONABLE UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE. THE ABOVE FIGURE IS DETERMINED AS UNDER : 98 BUFFALOES AT THE BEGINNING @ RS.6000/- PER BUFFALO RS.5,88,000 4 BUFFALOES PURCHASED ON 30 - 06 - 2008 (6000/12X9X4) RS.18,00 0/ - 14 ITA NO.68/PN/2013 22. SINCE THE ASSESSEE HAS DECLARED INCOME FROM DAIRY BU SINESS AT RS.3,85,919/-, THEREFORE, THE DIFFERENCE OF RS.2,66,081/- IS THE SUPPRESSED INCOME FROM DAIRY BUSINESS. ACCORDINGLY, AS AGA INST THE ADDITION OF RS.32,47,843/- MADE BY THE AO, THE ADDITION OF RS.15,16,081/- IS SUSTAINED, I.E. RS. 13 LAKHS + RS.2,66,081/-). T HE ORDER OF THE CIT(A) IS ACCORDINGLY MODIFIED AND THE ADDITION IS SUSTAINED AT RS.15,16,081/-. GROUND RAISED BY THE REVENU E IS ACCORDINGLY PARTLY ALLOWED. 23. SO FAR AS THE ARGUMENT OF THE LD. COUNSEL FOR THE ASS ESSEE THAT THE REVENUE HAS NOT TAKEN ANY SPECIFIC GROUND FOR DELET ION OF THE AGRICULTURAL INCOME, WE FIND THE AO WHILE MAKING THE ADDITION HAD CONSIDERED PART OF THE AGRICULTURAL INCOME AS SUPPRESSED BUSINESS INCOME AND WHILE GIVING EFFECT HAS SIMULTANEOUSLY DECIDED BO TH THE ISSUES. THE LD.CIT(A) ALSO WHILE GIVING RELIEF TO THE ASSESSEE H AD CONSIDERED BOTH THE ISSUES TOGETHER AND HAS REDUCED T HE ADDITION OF RS.32,47,843/- TO RS.22,518/-. UNDER THESE CIRCUMSTANCES, WE FIND NO MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSES SEE THAT SINCE THE REVENUE HAS NOT TAKEN ANY SPECIFIC GROUND FOR DELETION OF AGRICULTURAL INCOME, THE DEPARTMENTAL REPRESENTATIVE CANNO T ARGUE THE MATTER ON THIS ISSUE. THIS ARGUMENT IN OUR OPINION IS DEVOID OF ANY MERIT AND THEREFORE THE SAME IS REJECTED. 9 BUFFALOES PURCHASED ON 27 - 10 - 20 08 (6000/12X5X9) RS.22,500/ - 10 BUFFALOES PURCHASED ON 30 - 11 - 20 08 (6000/12X4X10) RS.20,000/ - 4 BUFFALOES PURCHASED ON 15 - 03 - 2009 AND 10 BUFFALOES PURCHASED ON 17-03- 2009 = (6000/12X0.5X14) RS.3,500/ - TOTAL 6,52,000/ - 15 ITA NO.68/PN/2013 24. GROUND OF APPEAL NO.2 BY THE REVENUE READS AS UNDER : 2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-I, NASHIK WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS.6,53,970/- ON ACCOUNT OF VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT,1961. 25. FACTS, IN BRIEF, ARE THAT THE AO DURING THE COURSE OF A SSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS MADE PURCHAS ES TOTALING TO RS.6,53,970/- FROM ONE SHRI PAWSHEMAMA. NO VOUCHERS IN RE SPECT OF THESE WERE PRODUCED AND THE PAYMENTS WERE MADE IN CASH. HE THEREFORE INVOKING THE PROVISIONS OF SECTION 40A(3) DISALLOWED AN AMOUNT OF RS.6,53,970/-. BEFORE CIT(A) IT WAS SUBMITTED THA T NO PAYMENT OF CASH IN EXCESS OF RS.20,000/- WAS MADE. FURTH ER, THE SUPPLIER IS ALSO CULTIVATOR OF SUGARCANE AND THEREFORE THE PROVISIO NS OF SECTION 40A(3) ARE NOT APPLICABLE. 26. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION. AGGRIEVED WITH SUCH ORDER O F THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 27. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES. ADMITTEDLY, THERE IS NO FINDING GIVEN BY THE AO THAT THE ASSESSEE HAS MADE PAYMENT IN CASH EXCEEDING RS.20,0000 /- AT ANY TIME. FURTHER, WE ALSO FIND MERIT IN THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSSESSEE THAT WHEN INCOME IS ESTIMATED THE PROVISIONS OF SECTION 40A(3) CANNOT BE APPLICABLE. SINCE IN TH E INSTANT CASE THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE AO THAT THE ASSESSEE HAD MADE PAYMENT IN CASH AT ANY TIME EXC EEDING RS.20,000/- PER DAY AND SINCE THE INCOME HAS BEEN ESTIM ATED, THEREFORE, IN OUR OPINION THE AO WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 40A(3). WE ACCORDINGLY UPHOLD THE OR DER OF THE 16 ITA NO.68/PN/2013 CIT(A) ON THIS ISSUE AND THE GROUND RAISED BY THE REVENU E IS DISMISSED. 28. GROUND OF APPEAL NO.3 BY THE REVENUE READS AS UNDER : 3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A)-L, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS.15,000/- ON ACCOUNT OF RENT HOLDING THAT THE SAID EXPENDITURE BEING CONSIDERED AS REVENUE IN NATURE. 29. AFTER HEARING BOTH THE SIDES, WE FIND THE AO DISALLOWED T HE AMOUNT OF RS.15,000/- OUT OF THE RENT OF RS.30,000/- PAID B Y THE ASSESSEE DURING THE YEAR ON THE GROUND THAT THE REST AURANT HAS OPERATED ONLY FOR 6 MONTHS DURING THE YEAR AND THEREFO RE 50% OF THE RENT IS NOT REVENUE IN NATURE. WE FIND LD.CIT(A) DELETED T HE ADDITION BY OBSERVING AS UNDER : 9.2 I HAVE CONSIDERED THE FACTS OF THE CASE, THE RELE VANT ASSESSMENT ORDER AND SUBMISSIONS ON BEHALF OF THE APPELLANT, IT IS AN UNDISPUTED FACT THAT THE IMPUGNED EXPENDITURE IS INCURRED IN RESPECT OF THE NORMAL BUSINESS OF THE APPELLANT. THOUGHT THE SHOP WAS TAKEN ON LEASE IN THE FIRST QUARTER OF THE YEAR AND THE SAME WAS COMMERCIALL Y USED IN THE THIRD QUARTER OF THE YEAR, BUT ADMITTEDLY THE SAID SHOP WAS TAKEN ON LEASE FOR SELLING THE MILK OF THE EXISTING BUSINESS AND NOT IN CON NECTION WITH ANY NEW VENTURE. THEREFORE, THE SAME IS A REVENUE EXPEND ITURE ALLOWANCE AS DEDUCTION FROM INCOME FROM BUSINESS. HENCE, THE IMPUG NED DISALLOWANCE MADE BY THE A.O. OF RS.15,000/- ON ACCOU NT OF DISALLOWANCE OF RENT AS DEDUCTION FROM INCOME FROM BUSINESS IS NOT JU STIFIED. HENCE, THE IMPUGNED DISALLOWANCE MADE BY THE A.O. OF RS.15,0 00/- ON ACCOUNT OF DISALLOWANCE OF RENT IS HEREBY DELETED. THEREFORE , THIS GROUND OF APPEAL IS ALLOWED. 30. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 31. AFTER HEARING BOTH THE SIDES, WE FIND NO INFIRMITY IN THE O RDER OF THE CIT(A) ON THIS ISSUE. IT IS AN UNDISPUTED FACT THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE OF MILK. ALTHOUGH HE START ED THE RESTAURANT FROM THIS PREMISES IN THE 3 RD QUARTER OF THE YEAR, HOWEVER, THE ASSESSEE HAS STATED BEFORE LD.CIT(A) THAT HE WAS ALS O DOING MILK 17 ITA NO.68/PN/2013 BUSINESS FROM THE SAID PREMISES. IN ANY CASE THE AMOUNT BEING VERY NEGLIGIBLE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND THE PAYMENT OF RENT IS NOT IN DISPUTE, THEREFORE, WE FIND NO INF IRMITY IN THE ORDER OF THE CIT(A) DELETING THE ADDITION. THE GROUND RAISED BY THE REVENUE IS DISMISSED. 32. GROUND OF APPEAL NO.4 BY THE REVENUE READS AS UNDER : 4) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT (A)-L, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS.13,133/- ON ACCOUNT OF FUEL EXPENDITURE BY NOT APPRECIATING THE FACT THAT THE SAID EXPENDITURE BEING CONSIDERED AS PERSONAL IN NATURE. 33. AFTER HEARING BOTH THE SIDES, WE FIND THE AO DISALLOWED A N AMOUNT OF RS.13,133/- BEING 20% OF THE FUEL EXPENSES IN RE SPECT OF VEHICLES CLAIMED AT RS.65,664/-. IN APPEAL THE LD.CIT(A) DELET ED THE ADDITION HOLDING THAT THE AO HAS MADE THE DISALLOWANCE IN ROUTINE MANNER WITHOUT BRINGING ANY INSTANCE OR EVIDENCE IN RESP ECT OF THE IMPUGNED DISALLOWANCE. FROM THE ORDER OF THE AO WE FIND TH E AO MERELY STATES THAT ASSESSEE HAS NOT VOLUNTARILY DISALLOW ED ANY EXPENSES FOR PERSONAL ELEMENT IN THE SAME. CONSIDERING TH E HUGE VOLUME OF BUSINESS THE FUEL EXPENSES AT RS.65,664/- IS VERY REASONABLE. THEREFORE, IN OUR OPINION, NO DISALLOWANCE IS CALLE D FOR. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSU E AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 34. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11-09-2015. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER IQ.KS PUNE ; DATED :11 TH SEPTEMBER, 2015. LRH'K 18 ITA NO.68/PN/2013 ( )+, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ ( ) / THE CIT(A)-I, NASHIK 4. $ / THE CIT-I, NASHIK 5. ' **+, +, IQ.KS / DR, ITAT, B PUNE; 6. / / GUARD FILE. / BY ORDER , ' * //TRUE C ' * //TRUE COPY// 12 * + / SR. PRIVATE SECRETARY +, IQ.KS / ITAT, PUNE