BASERA CONSTRUCTION, MUMBAI V. DCIT CC 9, MUMBAI

ITA 7685/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83526 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-08-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 14-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V R PATIL
• Assessee Lawyers: B G SAKARIA
• Keywords: Business income
• Section: 143(3)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI .., ! , ' , # BEFORE SHRI I.P.BANSAL, JM AND SHRI RAJENDRA, AM ITA NO.7685/MUM/2011 (A.Y.1998-99) M/S.BASERA CONSTRUCTION, PLOT NO.112, GROUND FLOOR, 6 TH ROAD, TPS-III,KHAR (W), MUMBAI 400 052 PAN:AAAFB4438R DCIT, CENTRAL CIR.9, OLD. CGO BLDG. ANNEXE, M.K.ROAD, MUMBAI 400 020 ( $% / // / APPELLANT) ' ' ' ' / VS. ( ()$%/ RESPONDENT) $% * + * + * + * + /APPELLANT BY : SHRI B.G.SAKARIA ()$% * + * + * + * + /RESPONDENT BY : SHRI V.R.PATIL ' * ,-' / / / / DATE OF HEARING : 11.8.14 ./0 * ,-' / DATE OF PRONOUNCEMENT : 11.08.2014 1 1 1 1 / / / / O R D E R PER I.P.BANSAL (JM) : THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-37 MUMBAI DATED 8/8/2011, INTER-ALIA INCLUDING ASSESSMENT YEAR 1998-99. GROUNDS OF APPEAL READ AS UNDER: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED BY CIT (A.O.) WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.4 ,27,227/- ON ACCOUNT OF AGRICULTURAL INCOME BY TREATING AS INCOME FROM OTHER SOURCES BUT ADDED THE SAME IN COMPUTATION OF INCOME AS BUSINESS INCOME ON WRONG FOOTING DUE TO S URMISE AND CONJECTURES. THE LEARNED CIT (A) WAS ALSO WRONG TO UPHOLD THE SAME B Y NEGLECTING THE FINDING GIVEN IN SCRUTINY ASSESSMENT COMPLETED U/S 143 (3) OF THE I. T. ACT FOR THE A.Y. 1997 - 98, 1999 - 2000, 2002 - 03 AND 2004 - 05 TO 2008-09 BY DY. CIT CENTRAL CIRCLE - 9 WHEREIN AGRICULTURAL INCOME DECLARED IN THE RETURN OF INCOM E HAS BEEN ACCEPTED FULLY WITHOUT ANY ADDITION OF EVEN ONE RUPEE ON ACCOUNT OF AGRICU LTURAL INCOME. APPELLANT PRAYS THAT ADDITION OF RS.4,27,227/- ON A CCOUNT OF AGRICULTURAL INCOME MAY PLEASE BE DELETED. 2) APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR D ELETE ANY OF THE ABOVE GROUNDS OF APPEAL WHICH MAY BE NECESSARY ON OR BEFORE THE DATE OF HEARING. 2. THIS APPEAL HAS A CHECKERED HISTORY. EARLIER THE ISSUE WAS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF AO VIDE ORDER DATED 10/ 9/2009 IN A CONSOLIDATED ORDER PASSED FOR ASSESSMENT YEARS 1996-97, 1998-99 AND 20 01-02. THE AO WAS REQUIRED TO READJUDICATE THE ISSUE OF QUANTIFICATION OF AGR ICULTURAL INCOME SHOWN BY THE ASSESSEE. AS PER CLAIM OF THE ASSESSEE IT HAD EARN ED AN AGRICULTURAL INCOME OF ITA NO.7685/MUM/2011 (A.Y.1998-99) 2 RS.6,86,217/- OUT OF TOTAL AGRICULTURAL PRODUCE SAL E OF RS.10,71,028/-. ACCORDINGLY, ASSESSMENT HAS BEEN RE-FRAMED VIDE ORDER DATED 22/1 2/2010 BY WAY OF AN ORDER PASSED UNDER SECTION 143(3) R.W.S. 254 OF THE INCO ME TAX ACT, 1961 (THE ACT). 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO AFTER EXAMINING THE CLAIM OF THE ASSESSEE HAS COME TO A CONCLUSION THAT AGRICULTURAL INCOME OF THE ASSESSEE CAN ONLY BE ESTIMATED AT RS.2,58,990/- IN PLACE OF RS.6,86,217/- SHOWN BY THE ASSESSEE. ACCORDINGLY, AN ADDITION OF RS.4,27, 227/- IS MADE. THE SUSTENANCE OF ADDITION TO THAT EXTENT WAS CHALLENGED IN AN APP EAL FILED BEFORE LD. CIT(A), WHO HAS COME TO A CONCLUSION THAT AGRICULTURAL PRODUCE TO THE EXTENT SHOWN BY THE ASSESSEE IN THE SHAPE OF GRAPES COULD NOT HAVE BEEN PRODUCED BY THE ASSESSEE IN ITS AGRICULTURAL LAND WHICH IS MEASURING 4.02 ACRES. HE ESTIMATED THE AGRICULTURAL PRODUCE OF THE ASSESSEE @ 3000 KGS. PER ACRE GIVIN G RISE TO AN AVERAGE SALE PRICE OF RS.17/- PER KG. AND THUS, THE AGRICULTURAL INCOME O F THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS CALCULATED BY LD. CIT(A) FOR A SUM OF RS.2,05,020/-. AS THE AO HAD ASSESSED THE SAME AT RS.2,58,990/-, THE LD. CIT (A) CONSIDERED THE SAME AS REASONABLE AND UPHELD THE ACTION OF AO. THE ASSESS EE IS AGGRIEVED, HENCE, HAS RAISED AFOREMENTIONED GROUNDS. 4. DURING THE COURSE OF HEARING IT WAS SUBMITTED BY LD. AR THAT THERE IS NO DISPUTE TO THE EXTENT THAT ASSESSEE OWNS 4.02 ACR ES OF AGRICULTURAL LAND. REFERRING TO THE ORDER OF LD. CIT(A) HE SUBMITTED THAT LD. C IT(A) HAS WRONGLY COME TO THE CONCLUSION THAT THERE COULD NOT BE MORE THAN 3000 KGS. OF GRAPES PER ACRE. HE SUBMITTED THAT THESE FINDINGS OF LD. CIT(A) ARE CO NTRARY TO THE FIGURES OBTAINED FROM NATIONAL BANK FOR AGRICULTURAL & RURAL DEVELOPMENT, WHEREIN AS PER NATIONAL SCENARIO AS PER TABLE 2 STATE WISE AREA, PRODUCTIO N AND PRODUCTIVITY OF GRAPES IN THE CASE OF MAHARASHTRA HAS BEEN SHOWN AT RS.28.29 TON PER ACRE. HE SUBMITTED THAT IF SUCH FIGURE IS TRANSLATED THEN THE PRODUCE OF THE ASSESSEE AS PER FOLLOWING CALCULATIONS WILL BE A SUM OF RS.7,82,493/-. 4.02 ACRES OF LAND X 11,450 KG OF GRAPES (I.E. 11.4 5 TONS) PER ACRES RS.17/- PER KG OF GRAPES = RS.7,82,493/- ITA NO.7685/MUM/2011 (A.Y.1998-99) 3 HE SUBMITTED THAT LD. CIT(A) HAS WRONGLY ARRIVED A T A CONCLUSION THAT AGRICULTURAL PRODUCE OF THE ASSESSEE COULD NOT BE MORE THAN R S.2,05,020/-. THUS, IT WAS PLEADED BY LD. AR THAT REASONABLE RELIEF SHOULD BE GRANTED TO THE ASSESSEE. 5. ON THE OTHER HAND, LD. DR RELYING UPON THE ORDER PASSED BY LD. CIT(A) HAS SUBMITTED THAT THE ESTIMATE OF THE AO IS VERY REAS ONABLE AND THERE IS NOTHING IN THE CLAIM OF THE ASSESSEE THAT GRAPES COULD BE PRODUCE D TO THE LEVEL OF RS.7,82,493/-. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTEN TIONS HAVE CAREFULLY BEEN CONSIDERED. AGRICULTURAL PRODUCE SOLD BY THE ASSES SEE ARE SHOWN AT RS.10,71,028/-. OUT OF THE TOTAL SALE OF AGRICULTURAL PRODUCE THE A SSESSEE HAS CLAIMED AGRICULTURAL EXPENSES OF RS.3,84,811/- AND THUS NET AGRICULTURA L INCOME HAS BEEN SHOWN AT RS.6,86,217/-. EVEN AS PER DATA SUBMITTED BY ASSES SE AGRICULTURAL PRODUCE OF THE ASSESSEE COULD NOT BE MORE THAN RS.7,82,493/-. THI S IS SO IF ASSESSEE HAS OBTAINED GOOD CROP OUT OF ITS LAND. IN ABSENCE OF EVIDENCE REGARDING GOOD QUALITY OF LAND, THE FIGURE SUBMITTED BY THE ASSESSEE CAN NOT BE ACCEPT ED AND A REASONABLE ESTIMATE HAS TO BE MADE. IF TOTAL PRODUCE OF THE ASSESSEE IS ESTIMATED EVEN AS PER FIGURE GIVEN BY THE ASSESSEE, IT WILL BE A SUM OF RS.7,82, 493/- AND IF THE EXPENSES SHOWN BY THE ASSESSEE ARE REDUCED THERE FROM WHICH ARE T O THE TUNE OF RS.3,84,811/-, THE REMAINING AMOUNT WOULD BE A SUM OF RS.3,97,682/-. THE AO HAS ACCEPTED THE AGRICULTURAL PRODUCE OF THE ASSESSEE AT RS.2,58,990 /- AND THE REMAINING AMOUNT WOULD BE A SUM OF RS.1,38,692/- AND THIS WILL BE O NLY IF THE ASSESSEE OBTAINED GOOD AND REASONABLE CROP OUT OF ITS LAND. IN ABSENCE OF DETAILS REGARDING QUALITY OF LAND AND OTHER AUTHENTICATED DETAILS REGARDING SALE OF THE AGRICULTURAL PRODUCE BY THE ASSESSEE, WE ARE OF THE OPINION THAT AO DID NOT COM MIT ANY ERROR IN ACCEPTING THE CLAIM OF THE ASSESSEE OF ITS AGRICULTURAL INCOME FO R A SUM OF RS.2,58,990/-. WE DECLINE TO INTERFERE AND APPEAL FILED BY THE ASSESS EE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH AUG., 2014. 1 * ./0 2'3 11.08.2014 / * 9 SD/- SD/- (RAJENDRA) (I.P.BANSAL) ' ' ' ' / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 2' DATED : 11TH AUG. 2014. ITA NO.7685/MUM/2011 (A.Y.1998-99) 4 VM. 1 * (,: ; :0, 1 * (,: ; :0, 1 * (,: ; :0, 1 * (,: ; :0,/ COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. ()$% / THE RESPONDENT. 3. <() / THE CIT, MUMBAI. 4. < / CIT(A)-13, MUMBAI 5. :?9 (,' , , / DR, ITAT, MUMBAI 6. 9@ A / GUARD FILE. 1' 1' 1' 1' / BY ORDER, ):, (, //TRUE COPY// B BB B/ // /C C C C (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI