Dr. Homiyar Sorab Bilimoria, Bilimora V. The Income tax Officer, Ward-2, Navsari

ITA 697/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1996 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-12-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 13-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: R N VEPARI
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI MAHAVIR SINGH, JM AND A. N. PAHUJA, AM) ITA NO. 697/AHD/2007 A. Y.: 2003-04 DR. HOMIYAR SORAB BILIMORIA, RATIVILA, DESRA ROAD, BILIMORA PA NO. AALPB 9678 A VS THE INCOME TAX OFFICER, WARD -2, RANGPUJA, SWAPNALOK COMPLEX, NEAR KALIAWADI BRIDGE, NAVSARI (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. N. VEPARI, AR RESPONDENT BY SMT. NEETA SHAH, DR DATE OF ORDER PRESERVED: 10/12/2009 O R D E R PER MAHAVIR SINGH: THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF THE LEARNED CIT(A), VALSAD IN APPEAL NO. CIT(A)/ VLS /64 /06-07 DATED 29-11-2006. THE ASSESSMENT WAS FRAMED BY THE ITO, W ARD-2, NAVSARI U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT.) FOR THE ASSESSMENT YEAR 2003-04. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST ASSESSMENT OF AGRICULTURE INCOME AND BALANCE TREATED AS BUSINESS INCOME BY THE AO AND THEREAFTER BY CIT(A). 3. THE BRIEF FACTS OF THE CASE LEADING TO THE ISSUE ARE THAT THE ASSESSEE HAD DECLARED AGRICULTURE INCOME AT RS.11,11,765/-. THE AO HAS ACCEPTED THE AGRICULTURE INCOME AT RS.5,67,355/- AND THE BALANCE WAS ESTIMATED AS BUSINESS INCOME AT RS.5,44,450/-. THE CIT(A) MADE ANOTHER ES TIMATE AND ACCEPTED THE NET AGRICULTURE INCOME AT RS.4,29,765/-. IT IS A FA CT THAT THE ASSESSEE OWNS 22.75 HECTARES OF LAND AND EARNS AGRICULTURE INCOME BY PR ODUCING SUGARCANE, ITA NOS.697/AHD/2007 DR. HOMIYAR SORAB BILIMORIA 2 MANGOES AND WATERMELON ETC. THE ASSESSEE HAS DECLAR ED AGRICULTURE INCOME ON ACCOUNT OF SUGARCANE AT RS.10,54,671/- WHICH IS SUP PORTED BY SALE BILLS OF SAHKARI KHAND UDHYOG MANDLI LTD. AND PATEL FIRM. T HE ASSESSEE HAS PLACED THE SALE BILLS IN PAPER BOOK AT PAGES 26 TO 34. THE ASSESSEE HAS ALSO SOLD MANGO PRODUCE AT RS.1,95,000/- AND WATERMELON AT RS .1,00,000/-. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AFTER G OING THROUGH THE DATA COLLECTED FROM NAVSARI AGRICULTURE UNIVERSITY HAS E STIMATED THE INCOME EARNED PER HECTARE FOR SUGARCANE AT RS.60,941/- AND ACCORD INGLY ESTIMATED INCOME AT RS.3,72,350/-. SIMILARLY, HE HAS ALSO ESTIMATED INC OME FROM MANGO PER HECTARE AT RS.80,387/- AND THEREFORE, ESTIMATED THE INCOME FROM MANGO FROM 2.47 HECTARES OF LAND AT RS.2,13,277/- AS AGAINST INCOME DECLARED BY THE ASSESSEE AT RS.1,95,000/- AS REGARDS TO WATERMELON THE AO HAS N OT ACCEPTED THE INCOME SHOWN BY THE ASSESSEE BY GIVING REASONING THAT WAT ERMELON CANNOT BE CULTIVATED BENEATH THE MANGO TREES. ACCORDINGLY, HE ESTIMATED AGRICULTURE INCOME. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEF ORE THE CIT(A). THE CIT(A) FURTHER ESTIMATED THE AGRICULTURE INCOME AT RS.6,82 ,000/- BY TABULATING THE ESTIMATION OF INCOME IN PARA 6 OF HIS ORDER AS UNDE R: PARTICULARS RS. 65% OF SALE PROCEEDS OF RS.7,54,471/- FROM SUGARCAN E SOLD TO SAHAKARI KHAND UDHYOG MANDLI, GANDEVI AND PATEL FAR M, MANEKPORE(AS PER ACTUAL SALES BILLS PRODUCED 4,90,406/- 65% OF SALE PROCEEDS FROM MANGOES 1,26,750/- 65% SALES PROCEEDS FROM WATERMELON 65,000/- TOTAL AGRICULTURAL INCOME SAY 6,82,156/- 6,82,000/- AGGRIEVED, THE ASSESSEE CAME IN APPEAL BEFORE US. 4. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING TH ROUGH THE CASE RECORDS WE FIND THAT THE AUTHORITIES BELOW HAVE NOT DOUBTED THE SALE BILLS OF SUGARCANE AND ACCEPTED AS IT IS. EVEN, THE CIT(A) HAS ITA NOS.697/AHD/2007 DR. HOMIYAR SORAB BILIMORIA 3 ACCEPTED THE SAME BUT ESTIMATED THE INCOME AT 65% W HICH COMES TO RS.4,90,000/-. SIMILARLY, AS REGARDS WATERMELON, TH E CIT(A) HAS ACCEPTED 65% AND THE BALANCE WAS TREATED AS PROFESS IONAL INCOME AS THE ASSESSEE COULD NOT SUBSTANTIATE THE AGRICULT URE INCOME THROUGH PROPER DOCUMENTARY EVIDENCES AND HE HAS CLU BBED THIS INCOME WITH PROFESSIONAL INCOME BY STATING THAT THE PROFESSIONAL DEGREE OF THE ASSESSEE IS APPARATUS TO EARN INCOME. WE FIND THAT THIS INCOME CANNOT BE CLUBBED WITH PROFESSIONAL INC OME AS THE AUTHORITIES BELOW HAVE NOT BROUGHT OUT ANY EVIDENCE TO SHOW THAT THIS INCOME IS EARNED ON ACCOUNT OF PROFESSION. NO DOUBT, THE ASSESSEE HAS PRODUCED THE SALE BILLS OF SUGARCANE F ROM SAHKARI KHAND UDHYOG MANDLI LTD. AT RS.10,54,671/- AND ALSO DECLARED INCOME FROM MANGO AT RS.1,95,000/- FROM 2.75 HECTAR ES OF LAND. AS REGARDS THE INCOME FROM MANGO, THERE IS NO DISPUTE BETWEEN THE ASSESSEE AND THE REVENUE. THE ONLY DISPUTE IS AS RE GARDS TO ESTIMATION OF INCOME FROM SUGARCANE AND INCOME FROM WATERMELON. WE FIND THAT THE REVENUE COULD NOT ATTRIBUTE ANY MA NAGERIAL COST, INTEREST COST AND OTHER ADMINISTRATIVE EXPENSES. AC CORDINGLY, WE ARE OF THE VIEW THAT THERE ARE EXPENDITURES IN RESPECT OF EARNING OF AGRICULTURE INCOME AND THAT SHOULD BE ESTIMATED AT A FAIR RATE. THE ASSESSEE HAS NOT KEPT ANY ACCOUNTS FOR THE AGRICULT URE INCOME BUT HE HAS SUPPORTING SALE BILLS AND ESTIMATED AGRICULT URE INCOME ON ACCOUNT OF WATERMELON. THE ASSESSEE HAS GROWN SUGAR CANE IN 16.55 HECTARES OF LAND INSTEAD ACCEPTED BY THE REVENUE AT 6.11. HECTARES OF LAND. FURTHER, WE ARE OF THE VIEW THAT THE DATA OF NAVSARI AGRICULTURE UNIVERSITY CANNOT BE THE BASIS FOR DETE RMINING AGRICULTURE INCOME AS THE ASSESSEE HAS SUFFICIENT E VIDENCE THAT HE HAS EARNED AGRICULTURE INCOME WHICH IS SUPPORTED BY SALE BILLS. THE ASSESSEE HAS ALSO FURNISHED XEROX COPIES OF ABSTRAC TS OF 7/12 AND 8A FORMS WHICH PROVIDE THAT THE ASSESSEE IS OWNER O F AGRICULTURE LAND AND HE HAS GROWN SUGARCANE, MANGO AND WATERMEL ON AND ITA NOS.697/AHD/2007 DR. HOMIYAR SORAB BILIMORIA 4 GARMAL. IN VIEW OF THE ABOVE FACTS, WE FEEL THAT A REASONABLE DISALLOWANCE OF EXPENDITURE WOULD MEET THE END OF J USTICE AND WE FEEL THAT REASONABLE DISALLOWANCE OF EXPENDITURE SH OULD BE CONSIDERED. ACCORDINGLY, WE DIRECT THE AO TO MAKE D ISALLOWANCE OF RS.1,00,000/-. 5. IN THE RESULT, APPEAL OF THE ASSESSEE ALLOWED PARTL Y. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23-12 -09 SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (MAHAVIR SINGH) JUDICIAL MEMBER DATE : 23 -12-09 LAKSHMIKANT/-*DKP COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE /TRUE COPY/ BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD