S. Gopala Reddy, Bellary V. ITO, Bellary

ITA 700/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2044 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-12-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 10-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: ATUL K ALUR
• Section: 142(1); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI K.P.T. THANGAL, VP AND SHRI A. MOHAN ALANKAMONY, AM ITA NO.700/(BANG.)/2009 (ASSESSMENT YEAR : 2005-06) SHRI S. GOPALA REDDY, CHANALU VILLAGE, BELLARY TALUK & DISTRICT. : APPELLANT VS. THE ITO, WARD-2, BELLARY. : RESPONDENT APPELLANT BY : SHRI ATUL K. ALUR RESPONDENT BY : SHRI JACINTA ZIMIK VASHAI O R D E R PER SHRI A. MOHAN ALANKAMONY, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A), HUBLI DATED 9-3-2009 AND IT RELATES TO THE ASSESSMENT YEAR 2005-06. 2. BRIEF FACTS OF THE CASE ARE AS FOLLOWS. THE ASSE SSEE IS AN AGRICULTURIST RESIDING IN CHANAL VILLAGE, BELLARY AND OWNS AROUND 52 ACRES OF AGRICULTURAL LAND. THE ASSESSEE HAS SAVING BANK ACCOUNT IN TUNGABHADRA GRAMINA BANK AND HE DEPOSITS HIS AGRICULTURE RECEIPTS IN THE SAME BANK ACCOUNT AND FOR HIS AGRICULTURAL EXPENDITURE AND OTHER NEEDS HE WITHDRAWS AMOUNTS FR OM THE SAME BANK ACCOUNT. THE LD. AO BELLARY HAS PASSED THE ORDER U NDER SEC. 144 STATING THAT INFORMATION WAS RECEIVED THAT RS.16,98,900 WAS DEPO SITED IN THE TUNGABHADRA GRAMEENA BANK (TGB IN SHORT) DURING THE FINANCIAL Y EAR 2004-05 AFTER ISSUING NOTICE UNDER SEC. 142(1) FOR WHICH ASSESSEE NEVER A PPEARED. THE LD. AO NOTICED THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME NO R RESPONDED TO THE NOTICE. AGAIN ANOTHER NOTICE UNDER SEC. 142(1) WAS ISSUED A ND SERVED ALONG WITH 2 PROPOSED LETTER FOR ADDITION OF RS.16,98,900 FOR WH ICH ALSO THE ASSESSEE HAD NOT RESPONDED AND THEREFORE THE LD. AO HAS CONCLUDED TH E ASSESSMENT TREATING DEPOSIT MADE IN TGB AS HIS INCOME UNDER SEC. 69 OF THE ACT. THE LD. AO THEREON INITIATED PENALTY UNDER SECTIONS 271(1) (C), 271(1) (B) AND 271F OF THE ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE APPEALED BEFORE THE LEARNED CIT(A), HUBLI CONTENDIN G INTER ALIA THAT THE ASSESSEE HAS PRODUCED EXTRACT OF CASH BOOK WHICH WAS BASED O N THE DEPOSITS MADE IN THE TUNGABHADRA GRAMEENA BANK OR VICE VERSA. IT WAS AL SO ARGUED THAT THE DEPOSITS IN TGB PERTAINED TO INCOME FROM AGRICULTUR AL OPERATIONS CONDUCTED BY THE ASSESSEE. 4. HOWEVER, THE LEARNED CIT(A) HELD THAT IF THE ASSESSEE EARNS ANY AGRICULTURAL INCOME, IT IS NECESSARY TO SUPPORT THE ENTIRE AMOUNT OF AGRICULTURAL RECEIPTS WITH DEPOSITS IN BANK AND THE SAME SHOULD BE CONSIDERED AFTER DEDUCTING THE EXPENSES FOR AGRICULTURAL OPERATION FOR WHICH T HE ASSESSEE HAS NOT FURNISHED ANY CORROBORATIVE EVIDENCE. IT WAS FURTHER HELD BY THE CIT(A) THAT IN THE ABSENCE OF ANY EVIDENCE OF AGRICULTURAL OPERATIONS, SUCH IN COME CANNOT BE LINKED TO THE BANK DEPOSITS. THE LEARNED CIT (A) AFTER GOING THRO UGH THE DETAILS FILED BY THE ASSESSEE HELD THAT AT THE MOST 10% OF THE BANK DEPO SITS COULD BE ATTRIBUTABLE TO AGRICULTURAL INCOME LOOKING TO THE EXTENT OF LAND H OLDING OF THE ASSESSEE, WHICH WORKS OUT TO RS.1,69,890. 5. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEF ORE THE TRIBUNAL. 6. BEFORE US, IT WAS CONTENDED BY THE LEARNED COUNS EL FOR THE ASSESSEE THAT APPROPRIATE AND SUFFICIENT OPPORTUNITY WAS NOT GIVE N BY THE ASSESSING OFFICER TO THE ASSESSEE TO EXPLAIN THE CREDITS IN BANK ACCOUNT . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE HAS TO BE DEALT WITH DILIGENCE CONSIDERING THE FACTS MINUTELY BECAUSE THE ASSESSEE IS UNEDUCATED/ AGRICULTURIST 3 AND THEREFORE THE CASE CANNOT BE TREATED ON PAR WIT H OTHER REGULAR ASSESSEES WHO ARE IN BUSINESS/ PROFESSION BEING EDUCATED AND QUALIFIED. IN THE PRESENT CASE, THE AO WITHOUT GRANTING TIME, HAD PASSED THE IMPUGNED ORDER U/S 144 OF THE ACT. IT IS FURTHER SUBMITTED THAT THE CIT (A) ERRED IN PARTLY ALLOWING THE APPEAL GRANTING 10% OF THE TOTAL DEPOSITS TO BE TREATED AS AGRICULTURAL INCOME. IT WAS CONTENDED THAT ALL THE DOCUMENTS WERE AVAILABLE WIT H THE ASSESSEE AND SOME DOCUMENTS WERE FILED. IT IS FURTHER SUBMITTED THAT THE ASSESSEE HAD PRODUCED SUFFICIENT DOCUMENTS BEFORE THE CIT(A) TO PROVE THA T HE IS AN AGRICULTURIST EARNING AGRICULTURAL INCOME AND THE BANK DEPOSITS AROSE OUT OF SUCH INCOME. THE LEARNED COUNSEL FURTHER CONTENDED THAT THE CIT (A) ERRED BY REJECTING THE ASSESSEES CLAIM ON THE GROUND THAT THE DOCUMENTS WERE NOT FUL LY SUPPORTED. THE LD. AR SUBMITS THAT THE ASSESSEE HAS PRODUCED SUFFICIENT E VIDENCE TO PROVE THE BONAFIDES OF THE DISPUTE AND ASSERTED THAT HE IS IN POSSESSION OF ALL DOCUMENTS TO PROVE SUCH CLAIM. IT WAS CONTENDED THAT ONE MO RE OPPORTUNITY MAY BE GRANTED TO THE ASSESSEE TO ESTABLISH BEFORE THE AO THAT THE INCOME IS EARNED FROM THE AGRICULTURAL OPERATIONS AND NOT FROM ANY O THER SOURCE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE REVENUE HAD NOT PROPERLY VERIFIED THE DOCUMENTS PRODUCED BEFORE THEM WHICH S UPPORTS THE ASSESSEE AS AN AGRICULTURIST DOING AGRICULTURE ACTIVITIES AND THE AMOUNT EARNED AND DEPOSITED IN THE BANK IS FROM AGRICULTURAL ACTIVITIES. THE LD. A R SUBMITTED THAT THE ASSESSEE HAD FURNISHED RTC RECORDS, INCOME CERTIFICATE AND T AX PAID CHALLANS BY THE ASSESSEE AND HIS WIFE SINCE 1980 WHICH PROVES THAT THE ASSESSEE IS AN AGRICULTURIST FOR PAST 30 YEARS. 7. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4 8. WE HAVE CONSIDERED THE SUBMISSIONS OF RIVAL PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS FUR NISHED INCOME CERTIFICATE AND LAND REVENUE TAX RECEIPTS FROM THE STATE REVENUE AU THORITIES FOR HIMSELF AND HIS WIFE SINCE 1980 I.E., FOR PAST 30 YEARS. AFTER CONS IDERING THE FACTS AND THE CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESS EE IS GENUINELY AN AGRICULTURIST. THE ASSESSEE CLAIMS THAT ALL THE REQ UIRED DOCUMENTS WERE PRODUCED BEFORE THE LOWER AUTHORITIES. HOWEVER, THEY WERE NO T EXAMINED BECAUSE THESE DOCUMENTS WERE FILED ALONG WITH THE PETITION SUBSEQ UENTLY AND LOST SIGHT OFF SEEMS TO BE CONVINCING. THEREFORE, IN THE INTEREST OF JUSTICE, WE REMIT THE MATTER BACK TO THE FILE OF THE LD. ASSESSING OFFICER WHO WILL CONSIDER THE ISSUE AFTER VERIFYING ALL THE DOCUMENTS PRODUCED BY THE ASSESSE E IN THIS REGARD AND AFTER AFFORDING SUFFICIENT OPPORTUNITY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF DECEMBER, 2009 SD/- SD/- (K.P.T. THANGAL) (A. MOHAN ALANKAMONY) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, D A T E D : 30 TH DECEMBER, 2009. JMR* / DS COPY TO : 1. THE ASSESSEE. 2. THE ASSESSING OFFICER. 3. CIT(APPEALS) 4. CIT 5. DEPARTMENTAL REPRESENTATIVE, ITAT, BANGALORE. 6. GUARD FILE, ITAT, BANGALORE. BY ORDER 7. GUARD FILE, ITAT, NEW DELHI. ASSISTANT REGISTRAR, ITAT, B ANGALORE