SHANKER N. KASHID, MUMBAI V. DCIT 13(2)(2), MUMBAI

ITA 6935/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7479 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 28-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: HARISH P SHAH
• Keywords: Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NO. 6935/MUM/2016 (ASSESSMENT YEAR: 2012-13) SHRI SHANKAR N. KASHID 101, GAYATRI DARSHAN NEAR SURUCHI HOTEL KANDIVALI (E),MUMBAI 400101 VS. DEPUTY COMMISSIONER OF INCOME TAX - 13(2)(2) MUMBAI PAN AALLPK9117 B APPELLANT RESPONDENT APPELLANT BY: SHRI HARISH P. SHAH RESPONDENT BY: MS. ARJU GARODIA DATE OF HEARING: 19.04.2018 DATE OF PRONOUNCEMENT: 19.04.2018 O R D E R PER G.S. PANNU, AM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-21, MUMBAI DATED 15.09.2016 FOR A.Y. 2012-13 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: - (1) ON THE FACTS & CIRCUMSTANCES AND IN LAW THE L EARNED CIT(A) - 21, MUMBAI [REFERRED AS 'CIT(A)'] ERRED IN CONFIRMING A DDITION OF NET AGRICULTURAL INCOME OF RS. 2,04,47,847/- AS UNEXPLA INED CASH CREDIT U/S. 68 OF THE ACT WITHOUT GIVING SUFFICIENT OPPORTUNITY. (2) ON THE FACTS AND CIRCUMSTANCES THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THERE WAS BONAFIDE AND GENUINE REAS ON FOR NOT ATTENDING & FURNISHING THE REQUIRED DETAILS AND EXP LANATION IN RELATION TO THE ALLEGED AGRICULTURAL INCOME BEFORE THE LEARNED DCIT. (3) ON THE FACTS AND CIRCUMSTANCES IT IS PRAYED TH AT THE ALLEGED ADDITION MAY BE DELETED AND THE SAME MAY BE TREATED AS AGRICULTURAL INCOME AND EXEMPTION U/S. 10(1) OF THE ACT MAY BE GRANTED. ITA NO. 6935/MUM/2016 SHRI SHANKAR N. KASHID 2 (4) ALTERNATIVELY, IN THE INTEREST OF NATURAL JUSTICE, YOUR APPELLANT PRAYS THAT ONE MORE OPPORTUNITY MAY BE GRANTED TO S UBSTANTIATE THE CLAIM . 3. AT THE TIME OF HEARING THE LEARNED A.R. HAS NOT ASS AILED THE EFFICACY OF THE ADDITION OF NET AGRICULTURAL INCOME OF ` 2,04,47,847/- MADE UNDER SECTION 68 OF INCOME TAX ACT (HEREINAFTER THE ACT ) AS RAISED IN THE MEMO OF APPEAL BUT INSTEAD SOUGHT TO RAISE A PRELIMINARY POINT TO EXPLAIN THE INCAPACITY OF THE ASSESSEE TO ADEQUATELY EXPLAIN TH E RETURN OF INCOME BEFORE THE LOWER AUTHORITIES AND THEREFORE CANVASSE D THAT THE MATTER BE RESTORED BACK TO THE FILE OF THE AO FOR ASSESSMENT AFRESH. 4. IN THIS REGARD IT IS NOTICED THAT THE ASSESSEE IS AN INDIVIDUAL, WHO FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME O F ` 2,22,660/- AND AGRICULTURAL INCOME OF ` 2,06,70,507/-. THE RETURN OF INCOME SO FILED WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND IT IS NOTED BY THE AO THAT IN RESPONSE TO THE NOTICE OF HEARING ISSUED ASSESSEE D ID NOT SUBMIT ANY INFORMATION IN SUPPORT OF HIS RETURN OF INCOME. THE AO HAS NOTED THE EXPLANATION FURNISHED BY THE ASSESSEE TO THE EFFECT THAT HE WAS A DIRECTOR IN A COMPANY, M/S. STATIONERY POINT (INDIA) LTD. AN D THAT THE CBI, EOW WING, MUMBAI HAS SEIZED LAPTOP/ELECTRONIC DATA FROM HIS RESIDENCE ON 25.09.2014 AND THEREFORE THE ASSESSEE WAS NOT IN A POSITION TO SUBMIT ANY INFORMATION. WITH REGARD TO THE AGRICULTURAL INCOME SHOWN AT ` 2,04,47,847/- IT IS NOTED BY THE AO THAT THOUGH THE ASSESSEE FILED A COPY OF HIS LAND HOLDINGS IN THE SHAPE OF 7/12 EXTRACT B UT NO INFORMATION WAS FURNISHED ABOUT THE SALE AND PURCHASE OF AGRICULTUR AL PRODUCTS AND THE ACCOUNTS FOR THE SAME WERE NOT FURNISHED. THE AO CO NCLUDED THAT IT WAS DIFFICULT TO BELIEVE THAT THE ASSESSEE HAD SUCH A H IGH AGRICULTURAL INCOME AND ACCORDINGLY HE TREATED THE AGRICULTURAL INCOME DECLARED AT ` 2,04,47,847/- AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDINGLY THE INCOME WAS FINALLY ASSESSED AT ` 2,06,70,510/- AS AGAINST THE RETURNED INCOME OF ` 2,22,660/-. WHEN THE MATTER WAS CARRIED IN APPEAL BEFORE THE CIT(A), THE CIT(A) RECORDS THAT N ONE APPEARED BEFORE HIM. THOUGH THE CIT(A) NOTES THAT THE ASSESSEE FILED CER TAIN DETAILS IN THE PAPER ITA NO. 6935/MUM/2016 SHRI SHANKAR N. KASHID 3 BOOK CLAIMING THAT IT WAS CULTIVATING GRAPES, ONION , CHILLIES AND OTHER AGRICULTURAL PRODUCTS BUT THE DETAILS OF QUANTITATI VE SALES, PURCHASES, EXPENSES, ETC. WERE NOT FILED ON THE GROUND THAT NE CESSARY DATA/LAPTOP WAS SEIZED BY THE CBI EWO WING. THE COMMISSIONER NOTICE D THAT EVEN THE PAPERS FILED BY THE ASSESSEE CONSTITUTED ADDITIONAL EVIDENCES AS THE SAME WAS NOT FILED BEFORE THE AO IN THE COURSE OF ASSESS MENT PROCEEDINGS AND THAT NO APPLICATION UNDER RULE 46A OF THE I.T. RULE S FOR ADMISSION OF ADDITIONAL EVIDENCE WAS MADE. THE COMMISSIONER ALSO NOTED THAT ON ONE HAND THE ASSESSEE HAD CLAIMED AGRICULTURAL INCOME O F ` 2,04,47,847/- WHEREAS IN THE INCOME & EXPENDITURE ACCOUNT FILED I N THE PAPER BOOK, THOUGH SALE OF ` 2,04,47,849/- WAS SHOWN, BUT THE NET PROFIT FROM AGRICULTURAL OPERATIONS WAS SHOWN AT ` 34,06,902/-. THE CIT(A) VIEWED THE SAME AS HIGHLY IMPROBABLE AND THEREFORE DISMISSED THE APPEAL OF THE ASSESSEE. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE PO INTED OUT THAT DUE TO THE IMPEDIMENT OF SEIZURE BY THE CBI THE ASSESSE E COULD NOT FURNISH THE REQUIRED DETAILS OR EFFECTIVELY SUPPORT HIS RETURN OF INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A PAPER BOOK CON TAINING 159 PAGES WHICH, INTER ALIA, CONTAINS COPY OF COMMUNICATIONS ADDRESSED TO THE AO, INCOME & EXPENDITURE ACCOUNT OF AGRICULTURAL OPERAT IONS, DETAILS OF AGRICULTURAL LAND HOLDINGS AND ITEMS CULTIVATED AND DETAILS OF INVOICES, ETC. AS ALSO DETAILS OF EXPENDITURE INCURRED ON AGRICULT URAL OPERATIONS, VIZ. SALARY, WAGES, PURCHASE OF FERTILIZER/SEEDS AND PAC KING MATERIALS, ETC. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED THAT NOW T HE ASSESSEE IS IN A POSITION TO FURNISH THE REQUISITE DETAILS AS HE HAS OBTAINED THE REQUISITE COPIES AND IN THIS MANNER IT WAS PLEADED THAT THE M ATTER BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ASSESSMENT. 6. ON THE OTHER HAND, THE LEARNED D.R. FOR REVENUE HAS NOT SERIOUSLY OPPOSED THE PLEA OF THE ASSESSEE FOR RESTORATION OF THE MATTER BACK TO THE FILE OF THE AO. ITA NO. 6935/MUM/2016 SHRI SHANKAR N. KASHID 4 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS . OSTENSIBLY THE INSTANT IS A CASE WHERE THE ASSESSEE WAS NOT ABLE T O FURNISH ANY WORTHWHILE MATERIAL OR INFORMATION TO SUPPORT HIS R ETURN OF INCOME AS THE LAPTOP AND ELECTRONIC DATA AVAILABLE WITH HIM WAS S EIZED BY THE CBI EOW WING ON 25.09.2014. THE FACTUM OF THE SEIZURE HAS N OT BEEN DISPUTED BY THE INCOME TAX AUTHORITIES. AT THE TIME OF HEARING, A STATEMENT HAS BEEN MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE AT BAR THAT THE REQUISITE MATERIAL IS NOW AVAILABLE WITH THE ASSESSEE AND THE SAME IS GERMANE TO ARRIVE AT THE CORRECT TAX LIABILITY. APART THERE FR OM, WE FIND AN INCONGRUOUS SITUATION IN AS MUCH AS ON ONE HAND ASSESSEE DECLAR ED AGRICULTURAL INCOME OF ` 2,04,47,849/- IN THE RETURN OF INCOME WHEREAS IN TH E INCOME & EXPENDITURE ACCOUNT OF THE AGRICULTURAL OPERATIONS THE NET INCOME HAS BEEN COMPUTED AT ` 34,06,902/- AND THE FIGURE OF ` 20,04,47,487/- REFLECTS THE GROSS SALE OF AGRICULTURAL PRODUCTS. PERTINENTL Y THERE IS AN INADEQUACY ON THE PART OF THE ASSESSEE, AND THE CORRECT POSITI ON IS REQUIRED TO BE ESTABLISHED BY EXAMINING THE REQUISITE MATERIAL AND THE ASSESSEE CANNOT BE PENALISED MERELY BECAUSE AT THE RELEVANT POINT O F TIME THE REQUISITE MATERIAL WAS NOT WITHIN HIS DOMAIN AND CONTROL. IT IS ALSO EVIDENT FROM THE MATERIAL ON RECORD THAT THE ASSESSEE OWNS AGRICULTU RAL LAND TO THE EXTENT OF 18 TO 19 ACRES, EVIDENCED BY 7/12 EXTRACTS, COPIES OF WHICH HAVE BEEN PLACED IN THE PAPER BOOK; THEREFORE THE CLAIM OF EX ISTENCE OF AGRICULTURAL INCOME CANNOT BE OUTRIGHTLY REJECTED, AS DONE BY TH E INCOME TAX AUTHORITIES. CONSIDERING THE ENTIRETY OF CIRCUM STANCES, IN OUR VIEW, IT WOULD BE IN THE FITNESS OF THINGS THAT THE ORDER OF THE CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FILE OF THE AO FOR DE NOVO ASSESSMENT. WE HOLD SO. OF COURSE, IN THE ENSUING A SSESSMENT, THE AO SHALL ALLOW A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN SUPPORT OF HIS RETURN OF INCOME AND ONLY THEREAFTER PASS AN ORDER AFRESH IN ACCORDANCE WITH LAW. 8. IN THE RESULT, WITHOUT GOING INTO THE MERITS OF THE IMPUGNED ADDITION, THE APPEAL OF THE ASSESSEE IS DISPOSED OFF AS ABOVE . APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 6935/MUM/2016 SHRI SHANKAR N. KASHID 5 ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH APRIL, 2018 AT THE CONCLUSION OF THE HEARING IN THE PRESENCE OF BOTH THE PARTIES. SD/ - SD/ - (RAMLAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 19 TH APRIL, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -21, MUMBAI 4. THE PR. CIT - 13, MUMBAI 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.