Shri Sukhveer Singh Chandel, Kanpur V. Income Tax Officer-5(4), Kanpur

ITA 727/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4693 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.727/LKW/2015 ASSESSMENT YEAR:2007-08 INCOME TAX OFFICER-5(4), KANPUR. VS SHRI SUKHVEER SINGH CHANDEL, 64/8, VIJAY NAGAR, KANPUR. PAN:AFFPC4510D (RESPONDENT) (APPELLANT) SHRI BALVEER SINGH CHANDEL, ADVOCATE SHRI ARUN SINGH CHANDEL, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY 22/02/2016 DATE OF HEARING 29 /02/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-I, KANPUR DATED 23/09/2014 FOR THE A SSESSMENT YEAR 2007- 08. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: 1. THAT THERE IS AN APPARENT ARITHMETICAL MISTAKE IN THE ORDER PASSED ON 23/09/2014 IN WHICH ABOUT 1.4312 HECTARE AGRICULTURAL LAND AT TEHSIL GHATAMPUR, KANP UR NAGAR OWNED BY THE APPELLANT WHICH WAS BEING USED F OR AGRICULTURAL PURPOSES WAS NOT CONSIDERED IN THE ORD ER WHILE CALCULATING THE AGGREGATE AGRICULTURAL INCOME OF THE APPELLANT. 2. THAT THERE IS ANOTHER APPARENT MISTAKE IN THE OR DER DATED 23/09/2014 IN WHICH ABOUT 0.787 HECTARE OWNED BY THE APPELLANT AT GRAM PAKRI, TEHSIL KANPUR SADAR , 2 KANPUR NAGAR WHICH WAS BEING USED FOR AGRICULTURAL PURPOSES WAS NOT CONSIDERED WHILE CALCULATING AGGRE GATE AGRICULTURAL INCOME OF THE APPELLANT. 3. THAT THE APPELLANT HAD MENTIONED THE INCOME FROM MELA (CATTLE FARE) AS AN AGRICULTURAL INCOME. THAT THE M ELA IS A CATTLE FARE AND APPELLANT RECEIVED REVENUE FROM THO SE CATTLE, OWNERS WHO USED APPELLANT'S LAND FOR STAY A ND USING OTHER AMENITIES ON THE AGRICULTURAL LAND. IT IS CLEARLY AN AGRICULTURAL INCOME AS PER SECTION 2 [1( A)] OF THE INCOME TAX ACT, 1961 WHICH STATES THAT AGRICULT URAL INCOME COMPRISES OF 'ANY RENT OR REVENUE DERIVED FR OM LAND WHICH IS SITUATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES'. THE MELA INCOME THAT THE APPELLANT EARNED WAS DERIVED AS REVENUE FROM THE CA TTLE OWNERS WHO WERE USING APPELLANT'S AGRICULTURAL LAND FOR STAY AND OTHER AMENITIES. ALSO AS PER SECTION 143 O F UP ZALR ACT, 1950 UNTIL AND UNLESS THE LAND USE OF THE AGRICULTURAL LAND IS CONVERTED BY FILING AN APPLICA TION BEFORE THE CONCERNED SDM OR SDM SUO-MOTU CONVERTS THE LAND USE, THE SAID LAND IS AN AGRICULTURAL LAND . THE LAND USE OF THE SAID LAND WAS NOT CONVERTED INTO NO N- AGRICULTURAL. 4. THAT THE APPELLANT HAD RAISED ALL THE FACTS MENT IONED FROM POINT NO. 1-3 ABOVE IN THE RECTIFICATION APPLI CATION FILED BY THE APPELLANT U/S 154 OF INCOME TAX ACT, 1 961 BEFORE CIT (APPEALS)-I, KANPUR ON 01/12/2014. BUT WITHOUT GOING INTO THE REAL FACTS AND SUBSTANCE OF THE CASE, THE APPLICATION WAS REJECTED BY CIT (APPEALS) -II, KANPUR ON 21/05/2015. 5. THEREFORE IN THE ABOVE PREMISES, THE APPELLANT'S AGRICULTURAL INCOME SHOULD BE CONSIDERED AS RS. 10,26,000/-. ALSO MELA INCOME OF RS. 2,25,000/- SHO ULD BE TREATED AS AGRICULTURAL INCOME AND NO TAX SHALL BE IMPOSED UPON IT. 3. IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESSE E THAT THERE IS ARITHMETICAL MISTAKE IN THE ORDER PASSED BY CIT(A) IN WHICH HE HAS OBSERVED AT ONE PLACE THAT ABOUT 1.4312 HECTARE OF AGRICULTURAL LAND AT TEHSIL GHATAMPUR, KANPUR NAGAR WAS OWNED BY THE ASS ESSEE, WHICH WAS 3 BEING USED FOR AGRICULTURAL PURPOSES BUT WHILE COMP UTING THE AGRICULTURAL INCOME, HE HAS CONSIDERED ONLY 0.787 HECTARE OF AGR ICULTURAL LAND AND IN THIS MANNER, HE HAS ACCEPTED THE AMOUNT OF AGRICULT URAL INCOME AT A LOWER SIDE, WHICH SHOULD BE RECTIFIED. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 4.1.1 TO 4.1.8 OF HIS ORDER, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY RE FERENCE: 4.1.1 HOWEVER, COMPLETE EVIDENCE OF SALE OF ALLEG ED PRODUCE ARE NOT AVAILABLE. HERE ISSUE ARISES THAT CAN ABOVE LAND YIELD INCOME OF RS.12,25,200/- AS SHOWN BY THE ASSESSEE. BASED ON THE DETAILS FILED BY THE ASSESSEE HAS 1/4 TH SHARE IN 13.779 HECTARE. HE ALSO HAS 1.285 HECTARE LAND IN HIS NAME AND ALSO RECEIVED FULL INCOME OUT OF 0.455 HECTARE IN NAME O F HIS MOTHER. THIS INCOME IS THUS OUT OF 5.185 HECTARE OF LAND UNDER BENEFICIAL OWNERSHIP OF THE ASSESSEE. 4.1.2 LET US CALCULATE PER ACRE YIELD 5.185 BECTARE X 2.5 =12.9625 ACRES 4.1.3 OUT OF TOTAL AGRICULTURAL INCOME OF RS.12,25, 200/-, A SUM OF RS.10,00,000/- IS AGRICULTURAL PRODUCE AND RS.2, 25,000/- IS MELA INCOME. 4.1.4 THUS 10,00,000 / 12.9625 = INCOME PER ACRE 77 ,145/- PER ACRE. 4.1.5 THIS YIELD ALSO INCLUDE CASH CROPS FROM POND IN THE SAID LAND AND SALE FOR FRUITS ETC. 4.1.6 HOWEVER THIS IS STILL EXCESSIVE YIELD. IF THE COUNTRY WAS PRODUCING SOME MUCH INCOME PER ACRE THE FARMING COM MUNITY WOULD HAVE BEEN WAY ABOVE THE POVERTY LINE. 4 4.1.7 IN CONCLUSION AND IN MY OPINION BASED ON EVID ENCES FILED BEFORE ME AND BASED ON MY EXPERIENCE OF PERSONALLY SEEING FARM YIELDS IN MOST FERTILE LANDS IN PANJAB AND INC OME OF 50,000/- PER ACRE PER ANNUM WAS THE POSSIBLE AGRICU LTURAL YIELD IN THE YEAR UNDER CONSIDERATION. BY THE WORKING ABO VE 12.9625 X 50,000=6,48,125/-, PLUS ABOUT 1,00,000/- ON ACCOU NT OF CASH CROPS, ROUNDED OFF TO RS7,50,000/- IS THE ESTIMATED AGRICULTURAL INCOME. THUS BALANCE AMOUNT OF RS 2,50,000/- IS TA KEN AS INCOME FROM OTHER SOURCES. 4.1.8 THE MELA INCOME OF RS.2,25,000/- DOES NOT HAV E ANY CORRELATION TO AGRICULTURAL INCOME IN VIEW OF THE J UDICIAL TESTS AS DISCUSSED ABOVE AND THE SAME WILL BE TREATED AS NON - AGRICULTURAL INCOME, I.EE, INCOME FROM OTHER SOURCE S. 5.1 FROM THE ABOVE PARAS FROM THE ORDER OF CIT(A), IT IS SEEN THAT IT IS NOTED BY CIT(A) IN PARA 4.1.1 OF HIS ORDER THAT THE ASSESSEE HAS 1/4 TH SHARE IN 13.779 HECTARE AND HE ALSO HAS 1.285 HECTARE LAN D IN HIS NAME AND ALSO RECEIVED FULL INCOME OUT OF 0.455 HECTARE IN NAME O F HIS MOTHER AND IN THIS MANNER, HE WORKED OUT THAT TOTAL 5.185 HECTARE LAND IS UNDER THE BENEFICIAL OWNERSHIP OF THE ASSESSEE AND 5.185 HECTARE LAND HA S BEEN CONVERTED INTO ACRES BY MULTIPLYING 2.5 AND THE SAME HAS BEEN WORK ED OUT AT 12.9625 ACRES. HE HELD THAT EVEN IN PUNJAB, PER ACRE AGRIC ULTURAL INCOME PER ANUMN IS RS. 50,000/- ONLY AND AT THIS RATE, HE WOR KED OUT THE INCOME OF 12.9625 ACRES AT RS. 6.48 LACS. HE FURTHER ADDED RS .1 LAC FOR CASH CROP AND THEN HE ROUNDED OFF THE AGRICULTURAL INCOME TO RS.7.50 LAC. REGARDING MELA INCOME OF RS.2.25 LAC, IT WAS HELD BY HIM THAT THIS DOES NOT HAVE CORRELATION WITH AGRICULTURAL INCOME. HE HAS FOLLOW ED A JUDGMENT OF HON'BLE MADRAS HIGH COURT RENDERED IN THE CASE OF CIT VS. M ADDI VENKAIASUHHAYYA AS REPORTED IN 20 ITR 151 (MAD) AND ALSO ANOTHER JU DGMENT OF HON'BLE MADRAS HIGH COURT RENDERED IN THE CASE OF CIT VS. K . S. IMAM SAHEB [1969] 71 ITR 742 WHEREIN IT WAS HELD THAT HAVING R EGARD TO THE DEFINITION OF AGRICULTURAL INCOME IN SECTION 2(1A), AN INCOME TO BE AGRICULTURAL INCOME SHOULD BE DERIVED FROM LAND AND THE LAND SHOULD BE USED FOR AGRICULTURAL 5 PURPOSES. WHEN THE LAND WAS ADMITTEDLY USED FOR MEL A PURPOSES AND NOT FOR AGRICULTURAL PURPOSES, THE INCOME FROM MELA OF RS.2.25 LAC CANNOT BE CONSIDERED AS AGRICULTURAL INCOME. UNDER THESE FAC TS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29/02/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR