Sabyasachi Mishra, Bhubaneswar V. ITO, Ward-4(3), Bhubaneswar

ITA 78/CTK/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2248 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: G NAYAK AR SHRI SUBHENDU DUTTA
• Keywords: Salary income
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO. 78 /CTK/201 8 ( [ [ / ASSESSMENT YEAR : 20 14 - 20 1 5 ) SRI SABYASACHI MISHRA, 191, KHARAVEL NAGAR, UNIT - III, BHUBANESWAR - 751001 VS. ITO, WARD - 4(3), BHUBANESWAR ./ ./ PAN/TAN NO. : A BKPM 7703 R ( / APPELLANT ) .. ( / RESPONDENT ) [ /AS SESSEE BY : SHRI G.NAYAK, AR /REV ENUE BY : SHRI SUBHENDU DUTTA, DR / DATE OF HEARING : 0 6 / 0 9 /201 8 / DATE OF PRONOUNCEMENT 07 / 0 9 /201 8 / O R D E R PER SHRI PAVAN KUMAR GADALE, J M : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER O F THE CIT (A) - 2 , BHUBANESWAR , DATED 30.11.2017 IN I.T.APPEAL NO. 0160 /2016 - 17 FOR THE ASSESSMENT YEAR 2014 - 2015 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.38,31,518/ - MADE BY THE A.O. AS DISALLOWANCE OF AGRICULTURAL INCOME. 2. THE LD. CIT(A) WAS NOT JUSTIFIED TO IGNORE THE NATURE OF INCOME FROM SALE OF AGRICULTURAL PRODUCE, I.E. , SUGARCANE SEEDS GROWN BY THE ASSESSEE FROM TH E LEASE HOLD LAND CARRYING OUT BASIC OPERATION ON LAND INVOLVING EXPENDITURE OF HUMAN SKILL SUCH AS PLOUGHING, TILLING, SOWING AND PLANTING OF SEEDS. MOREOVER, SUBSEQUENT OPERATIONS SUCH AS WATERING, APPLICATION OF MANURE AND INSECTICIDES, CUTTING, ETC. WE RE ALSO CARRIED BY THE ASSESSEE AND IN THE PROCESS EXPENSES WERE INCURRED. EVIDENCE OF EXPENSES WERE SUBMITTED DURING THE PERIOD OF HEARING. 3. THE ASSESSEE RECEIVED GROSS AGRICULTURAL INCOME OF RS.47,32,198/ - FROM SALE AND SUPPLY OF SEEDS FOR SUGAR CANE TO THE REGISTERED FARMERS OF THE COMPANY NAMELY NAYAAGARH ITA NO. 78 /1 8 2 SUGAR COMPLEX LTD. AND HAD INCURRED EXPENDITURE TO THE TUNE OF RS.9,00,680/ - FOR SEEDS, FERTILIZER, PESTICIDES, LABOUR CHARGES, ETC. TO EARN SUCH GROSS AGRICULTURAL RECEIPT AND THERE BY NET RECEIPT OF RS.38,31,518/ - . 4. DURING THE PERIOD OF HEARING THE ASSESSEE HAD PRODUCED THE FOLLOWING DOCUMENTS (I) EVIDENCE IN SUPPORT OF LAND HOLDING, I.E., LEASE DEED (II) EVIDENCE IN SUPPORT OF BASIC AGRICULTURAL OPERATIONS SUCH AS EXPENDITURES FOR LA BOUR INCURRED FOR TILLING OF LAND, SOWING/DISSEMINATING OF SEEDS AND PLANTING, DIGGING OF SOIL, ETC. (III) EVIDENCE IN SUPPORT OF EXPENDITURE SUCH AS FERTILIZERS & CHEMICALS (IV) EVIDENCE IN SUPPORT OF SALE OF AGRICULTURAL PRODUCES (V) EVIDENCE IN SU PPORT OF PAYMENT RECEIVED AGAINST SUCH SALES THROUGH BANK. 5. AGRICULTURE INCOME IS EXEMPT UNDER SECTION 10(1) OF THE INCOME TAX ACT, 1961 - THIS MEANS THAT INCOME EARNED FROM AGRICULTURAL OPERATIONS IS NOT TAXED. AS PER INCOME TAX ACT AGRICULTURAL INCOME MEANS ANY INCOME DERIVED FROM LAND BY AGRICULTURAL OPERATIONS INCLUDING PROCESSING OF AGRICULTURAL PRODUCE, RAISED OR RECEIVED AS RENT IN KIND SO AS TO RENDER IT FIT FOR THE MARKET, OR SALE OF SUCH PRODUCE. IN THIS CASE, THE ASSESSEE HAS DERIVED THE AGRI CULTURAL INCOME FROM LEASEHOLD LAND. THE COPY OF LEASE DEED WAS SUBMITTED TO THE A.O. DURING THE COURSE OF HEARING. THE ASSESSEE DERIVED INCOME FROM AGRICULTURAL LAND BY DEPLOYMENT OF AGRICULTURAL PROCESS AND SALE OF AGRICULTURAL PRODUCE. HENCE, THE INCOM E IS WELL COVERED UNDER SECTION 2(1 A) OF THE INCOME TAX ACT AND THE SAME IS EXEMPTED U/S 10(1) OF THE I.T.ACT. THUS, IT CANNOT BE DISPUTED THAT THE SEED IS THE PRODUCT OF AGRICULTURAL ACTIVITY AND THE SEED CANNOT BE SOLD COMMERCIALLY, UNLESS IT IS PRODUCE D BY AGRICULTURAL ACTIVITY. IN THIS REGARD, RELIANCE IS PLACED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT, I.E. THE HONOURABLE ANDHRA PRADESH HIGH COURT IN 'CIT VS. PRABHAT AGRI BIOTECH LIMITED', IT.T.A.NO.88 OF 2014 DATED 21 - 02 - 2014. THE APPELLANT ACCORDINGLY PRAYS FOR GRANTING THE EXEMPTION UNDER SECTION 10(1) OF THE ACT IN RESPECT OF THE AGRICULTURAL INCOME OF RS. 38,31,518/ - . ITA NO. 78 /1 8 3 THE CIT(APPEAL) HAS WRONGLY TREATED THE GENUINE AND EXEMPTED AGRICULTURAL INCOME AND HAS ARBITRARILY ADDED TO THE TOTAL INCOME WITHOUT GOING THROUGH THE DOCUMENTS AND UNDERSTANDING THE CONTENTS. THE IMPUGNED ORDER HAS BEEN PASSED IN CONTRAVENTION OF THE PRONOUNCEMENTS MADE BY THE HON'BLE HIGH COURTS IN THE FOLLOWING CASE DECISIONS: > CIT VS. PRAVAT AGRI BIOTECH LTD., 20 16 ITL 3799 (AP - HC) > CIT VS. K.N.PANNIRSELVAM, 217 ITL 40 (MADRAS - HC) THE ORDER OF THE HON'BLE ITAT, HYDERABAD IN THE CASE OF DCIT, HYDERABAD VS. M/S NUZIVEEDU SEEDS LIMITED, ITA NO. 1594/HYD/14 MAY ALSO BE CONSIDERED 1. THE CIT(A) WITHOUT THOROUGH EX AMINATION OF THE FACTS OF THE CASE, WITHOUT CAREFUL AND JUDICIOUS PERUSAL OF THE DOCUMENTARY EVIDENCES PRODUCED BEFORE HIM AND WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE, ACCEPTED AND UPHELD THE VIEW OF THE ASSESSING OFFICER AND PASSED THE ORDER . THE CIT(APPEAL) HAS REFERRED THE CASE OF HON'BLE ITAT, CUTTACK BENCH IN ITA NO.363 & 364/CTK/2015 FOR A.Y. 2010 - 11 IN CASE OF ASHA MANJARI MISHRA. BUT IN THIS CASE THE OBSERVATION WAS THAT THE LEASE OF THE AGRICULTURAL LAND WAS TAKEN BY THE ASSESSEE LAT ER THAN THE SALES MADE. BUT IN THE PRESENT CASE FOR THE ASST. YEAR 2014 - 15, THE SITUATION IS NOT THE SAME. HERE LEASE DEED WAS EXECUTED MUCH PRIOR TO THE RECEIPT OF THE AGRICULTURAL INCOME. CONSIDERING THE ABOVE, THE AGRICULTURAL RECEIPT OF RS. 38,31,518 / - CAN NOT BE ADDED BACK TO THE INCOME OF THE ASSESSEE. THEREFORE, THE ADDITION OF TOTAL SUM OF RS. 38,31,518/ - AS INCOME IS PURELY UNJUST AND ARBITRARY WHICH SHOULD BE DELETED IN THE FACTS & CIRCUMSTANCES OF THE CASE. 6. THAT DURING THE COURSE OF HEARIN G THE ASSESSEE HAD SUBMITTED EVERY DETAILS AS DESIRED REGARDING THE AGRICULTURAL INCOME DURING THE COURSE OF HEARING BEFORE CIT (A). 7. THE ORDER OF THE ASSESSMENT AS WELL AS THE APPELLANT ORDER IS AGAINST LAW, WEIGHT OF EVIDENCES AND PROBABILITIES OF T HE CASE. 8. FOR THESE OTHER REASONS TO BE ARGUED AT THE TIME OF THE HEARING THE ORDER OF ASSESSMENT SHALL BE SQUASHED TO MEET THE END OF THE JUSTICE. ITA NO. 78 /1 8 4 3 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE DERIVES INCOME FROM SALARY FROM M/S NAYAGARH SUGAR COMP LEX LTD. AS A DIRECTOR AND INCOME FROM OTHER SOURCES AND FILED RETURN OF INCOME ON 08.12.2016 FOR THE A.Y.201 4 - 201 5 DECLARING TOTAL INCOME OF RS. 9,55,790/ - AND AGRICULTURAL INCOME AT RS.38,31,518/ - AFTER CLAIMING DEDUCTION OF RS.1,07,661/ - UNDER CHAPTER - VI A . SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICES U/S.143(2) & 142(1) OF THE ACT WERE ISSUED. IN COMPLIANCE OF THE SAME, LD. AR APPEARED BEFORE THE AO AND CASE WAS DISCUSSED. THEREAFTER THE AO COMPLETED THE REASSESSMENT ASSESSING TO TAL INCOME AT RS. 47,87,310/ - AND PASSED ORDER U/S.143(3) OF THE ACT, DATED 08.12.2016 AND MADE DISALLOWANCE OF RS.38,31,518/ - TREATING THE AGRICULTURAL INCOME AS NON - AGRICULTURAL INCOME . 4 . AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED AN APPEAL BEFORE CIT(A). IN THE APPELLATE PROCEEDINGS THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE AND FINDINGS OF THE AO, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEVED BY THE ORDER OF CT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUN AL. 6 . LD. AR BEFORE US SUBMITTED THAT T HE ASSESSEE DERIVED INCOME FROM AGRICULTURAL LAND BY DEPLOYMENT OF AGRICULTURAL PROCESS AND SALE OF AGRICULTURAL PRODUCE. HENCE, THE INCOME IS WELL COVERED UNDER SECTION 2(1A) OF THE INCOME TAX ACT AND THE SAME IS EX EMPTED U/S 10(1) OF THE I.T.ACT AND PRAYED FOR ALLOWING THE APPEAL. ITA NO. 78 /1 8 5 7 . CONTRA, LD. DR RELIED ON THE ORDER OF AO. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, WE FOUND THAT THE SIMILAR DISPUTED ISSUE WAS DEALT BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF SMT. ASHA MANJARI MISHRA, IN ITA NO.79&80/CTK/2018 FOR THE ASSESSMENT YEARS 2013 - 2014 & 2014 - 2015, ORDER DATED 06.09.2018, WHEREIN THE TRIBUNAL OBSERVED AS UNDER : - 8. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING T HE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE CIT(A) HAS FOLLOWED THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010 - 2011, WHEREIN, THE CLAIM OF AGRICULTURAL INCOME OF THE ASSESSEE WAS NEGATED AND SAME WAS TREATED AS INCO ME FROM OTHER SOURCES. 9. ALTHOUGH THE LD A.R. HAS FILED TWO PAPER BOOKS FOR THE ASSESSMENT YEAR 2013 - 14 CONTAINING 133 PAGES AND FOR ASSESSMENT YEAR 2014 - 15 CONTAINING 163 PAGES BUT HAS NOT REFERRED TO ANY OF THE PAGES OF THE PAPER BOOK DURING THE COUR SE OF HEARING. RULE 18 OF ITAT RULES, 1963 READS AS UNDER: 18. (1).. (2) . (3) (4) (5) . [(6) DOCUMENTS THAT ARE REFERRED TO AND RELIED UPON BY THE PARTIES DURING THE COURSE OF ARGUMENTS SHALL ALONE BE TREATED AS PART OF THE RECORD OF THE TRIB UNAL.] SINCE THE LD A.R. OF THE ASSESSEE HAS NOT REFERRED TO ANY OF THE DOCUMENTS FILED IN THE PAPER BOOK, THE PAPER BOOK FILED ARE NOT TREATED AS PART OF RECORD AS PER THE ABOVE QUOTED ITAT RULES. 10. LD A.R. COULD NOT BRING ANY RELEVANT AND COGENT MATE RIAL ON RECORD TO CONTROVERT THE FINDINGS OF THE ASSESSING OFFICER AS WELL AS THE CIT(A) THAT THE APPELLANT RECEIVED THE SUGARCANE SEEDS FROM NAYAGARH SUGARCANE COMPLEX LTD. IN HER PLANTING VILLAGE PANIPOILA ON 06.12.2012 AND SUPPLIED IT TO THE FARMER WHO PLANTED IT ON 18.12.2012 IN HIS PLANTING VILLAGE AT GUNTHUNI. ACCORDING TO THE APPELLANT'S OWN WRITTEN SUBMISSION - DATED 18 TH NOVEMBER 2016 (WHICH WAS FILED DURING APPEAL PROCEEDINGS OF A.Y 2012 - 13), IN WHICH THE APPELLANT HAS EXPLAINED THE AGRICULTURAL PR OCESS, IT TAKES 1 TO 2 MONTHS TIME FOR BUDS AND 6 TO 12 MONTHS TIME FOR SMALL ITA NO. 78 /1 8 6 PLANTS TO DEVELOP FROM THE SEEDS. IF THIS IS SO, THEN HOW COULD THE APPELLANT TAKE SUPPLY OF THE SEEDS ON 06.12.2012 AND SUPPLY THE SUGARCANE PLANTS ON 18.12.2012. 11. IN VIEW OF ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) TO INTERFERE AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED FOR BOTH THE ASSESSMENT YEARS. 12. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. WE CONSIDERING THE JUDICIAL PRECEDENCE AND THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE, FOUND THAT THE ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS COVERED BY THE DECISION OF THE TRIBUNAL . WE RESPECTFULLY FOLLOW THE ORDER OF THE TRIBUNAL AND DISMISS THE GROUND RAISED BY THE ASSESSEE AND ACCORDINGLY APPEAL OF THE ASSESSEE IS DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 / 09 /201 8 . S D/ - (N. S. SAINI) S D/ - ( PAVAN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 07 / 09 /2018 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - SRI SABYASAC HI MISHRA, 191, KHARAVEL NAGAR, UNIT - III, BHUBANESWAR - 751001 2. / THE RESPONDENT - ITO, WARD - 4(3), BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUT TACK 6. [ / GUARD FILE. //TRUE COPY//