Geeta Vipulkumar Chaudhary, Mehsana V. The DCIT, Mehsana, Mehsana

ITA 780/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6930 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 30-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD (through web-based video conferencing platform) ] ] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No. 780/Ahd/2019 Assessment Years : 2015-16 Geeta Vipulkumar Chaudhary, K-7, Road, State Highway, Rajkamal Compound, Mehsana PAN : ABHPP 7548 Q Vs Dy. Commissioner of Income-Tax, Mehsana, Gujarat / (Appellant) / (Respondent) Assessee by : None Revenue by : Shri Kamlesh Makwana, Sr DR /Date of Hearing : 11/11/2021 /Date of Pronouncement: 07/12/2021 आदेश/O R D E R PER RAJPAL YADAV, VICE PRESIDENT : The assessee is in appeal before the Tribunal against the order of learned Commissioner of Income-tax (Appeals)-13, Ahmedabad [“CIT(A) in short] dated 14.03.2019 passed for Assessment Year 2015-16. 2. The solitary substantial grievance of the assessee is that learned CIT(A) has erred in confirming the addition of Rs.13,61,892/-. 3. The brief facts of the case are that the assessee has filed her return of income on 31.10.2015 declaring total income of Rs.35,42,450/- and agricultural income of Rs.43,42,144/-. The case of the assessee was selected for scrutiny assessment and a notice under Section 143(2) of the Income-tax Act, 1961 was issued and served upon the assessee. On scrutiny of the account, it revealed to the Assessing Officer that she has shown gross sales of Rs.53,02,680/- out of agricultural produce. She has claimed expenses of Rs.9,60,536/- and thereafter declared net agricultural income of ITA No. 780/Ahd/2019 Geeta Vipulkumar Chaudhary Vs. DCIT AY : 2015-16 2 Rs.43,42,144/-. The learned Assessing Officer issued a detailed show-cause notice directing the assessee to submit details of agricultural land holding, details of expenses viz. labour/wages, seeds, fertilizers, electricity, transportation and other miscellaneous expenses. The learned Assessing Officer thereafter did some on-line research and downloaded tentative data of district-wise area, production and yield with respect to Cotton, Castor, Jowar, Bajri, Wheat and Mustard crop reflected in the State of Gujarat. He also downloaded this type of other information and then confronted with the assessee that the yield shown by the assessee is on the higher side in comparison to the yield received from the data of Directorate of Agriculture, Gujarat State, Gandhinagar. On this standard accepted yield, he worked out the expenditure shown by the assessee and invited her comments. The assessee has filed detailed reply which has been considered by the Assessing Officer. We briefly take note of the submissions filed by the assessee before the Assessing Officer and how it has been dealt with by the Assessing Officer, which are as follows:- “3.5 In response, the assessee has filed submission on 29,12.2017 on the official e-mail id. The contentions of the assessee as per her submission and rebuttal thereof are discussed below :- • She has contended that the data of yield relied upon which the production worked out is based on forecast reports and not the actual production details and hence is tentative and not final. The contention of the assessee is not acceptable because the working of yield provided by the Agriculture Department is based on survey conducted by the Agri. Department through its local offices situated at various district and taluka places of the state. In the head of the sheet containing data written as “tentative” doesn’t mean that the figures worked out therein are on the basis of forecast. After completion of the year, the Agriculture Department publishes such data in a booklet available even in their offices at the district as well as taluka places which are based on concrete and genuine inputs. ITA No. 780/Ahd/2019 Geeta Vipulkumar Chaudhary Vs. DCIT AY : 2015-16 3 • The assessee has further quoted the details of yield of the crop 'wheat' from the website 'agri.gujarat.gov.in' in which she has contended that considering that yield, the production of wheat in her case is more or less same. This argument made by the assessee is also not tenable because the assessee has neither provided details nor relevant documents showing such yield gathered through the website. Even the year of such yield and basis of working has also not furnished by the assessee. • She further contended that no adverse inference drawn with regard to sale of the agricultural products. This argument is again baseless as production of a crop cannot be ascertained from the crop sold. Further, bills issued on record and booked by the purchaser in its books as purchases and even payments made through banking channel cannot tantamount to treat agriculture receipt as genuine, because, production of crop is deciding factor for being agriculture receipt and not sale of agricultural produce. • The assessee has farther taken a plea that production of a crop depends upon various factors like quality of land, water, seeds, fertilizer, labour, etc. This argument is considerable as well as acceptable because the assessee has put forth factors for variation in the production. However, she has not submitted any details of these factors as a result of which production in her case remains higher. In spite of providing ample opportunity, neither the assessee nor the so called persons to whom the land was given for cultivation during the year, have furnish the details of expenses. Further, the assessee has shown expenses of Rs.9,60,536/- against the agriculture receipt of Rs.53,02,680/- which is just around 18%. The expense claimed is very meagre against the ratio of 40% decided in various judicial pronouncements. Thus, considering such meagre expenditure, the assessee cannot said to have purchased good quality seeds, fertilizers, etc. which can enhance the production of a crop more than the average production of the area. It is also relevant to add here that the yield decided by the Agriculture Department is arrived at considering such higher as well as average production of a particular area involving the quality of land, availability of water, labour and environment conditions prevailing for the particular year. • As per details of season-wise crops submitted by the assessee, she has grown various crops. On verification of the same, it is seen that the crops ITA No. 780/Ahd/2019 Geeta Vipulkumar Chaudhary Vs. DCIT AY : 2015-16 4 of cotton seeds and castor seeds take minimum 8 to 10 months i.e. two seasons - Monsoon and Rabi. Considering this fact, the total land on which crops grown during monsoon comes at 96 vigha as against the assessee shown total and available with her at 78 vigha only. 3.6 In the light of above discussion, the submission made by the assessee without any specific argument and supporting evidence, hence, the same is not acceptable. However, with regard to working of production of cotton, it is verified in other cases of this office involving similar issue that the data of Directorate of Agriculture, Gujarat on which department is relying upon for cotton yield is related to lint. Lint is cotton fibers without seeds. The assessee has sold cotton fiber which is basically araw cotton. The process of segregating cotton fiber from cotton seed is called ginning. In support, a paper of Central Institute for Research on Cotton Technology, Matunga, Mumbai is obtained. Perusal of such document, it is revealed that lint and seed yield in different verities of cotton is mentioned therein. From the same, average yield of lint from raw cotton (including seed) is 34.25%. 3.7 Further, inspite of being asked specifically repeatedly (vide the notices dated 08.09.2017, 29.10.2017, 14.11.2017 & 23.12.2017), the assessee has not produced any bill / voucher related to purchases of seeds or fertilizers. On the basis of affidavits filed by three persons claiming to have done the work of cultivation, statements were recorded in which they have been asked to furnish details of expenditure with proofs. However, none of them have either provided details of expenses or filed bills/vouchers thereof. Input in form of seeds/fertilizers has bearing on yield. However, assessee has not furnished a single bill of seeds/ fertilizers. It shows that assessee has no explanation to offer on the issue of higher production shown except the technical issue of working of yield discussed above. Further, not producing the bills of expenses inspite of providing more than sufficient time prove that assessee has not used high yielding seeds or more fertilizers, so the assessee cannot argue that yield of the crop will be more than average yield of crop of particular area. However, assessee has shown agriculture production on higher side and produced no evidence to substantiate its claim, even bills of input like seeds and fertilizers have not provided. On the basis of data, agriculture receipt shown higher has worked out at Rs.17,58,668/-. The crop-wise working of such higher production is annexed with this order as Annexure-B.” 4. The learned Assessing Officer further observed that the expenditure could be 40% of the gross receipt and thereafter he made an estimated disallowance of Rs.13,61,892/-. ITA No. 780/Ahd/2019 Geeta Vipulkumar Chaudhary Vs. DCIT AY : 2015-16 5 5. Appeal to the leaned CIT(A) did not bring any relief to the assessee. 6. In response to the notice of hearing, no one has come present on behalf of the assessee; however, with the assistance of learned Sr. DR, we have gone through the record carefully. A perusal of both the impugned orders would reveal that the learned Revenue Authorities have miserably failed to appreciate the case of the assessee and her agricultural activities. The Assessing Officer has compared the details submitted by the assessee in a very general manner and with an expectation of standard format of production of agricultural produce. His major emphasis is the data released by the Directorate of Agriculture, Gujarat State, Gandhinagar which has forecasted the area of cultivation of particular crop and how much production is expected. These types of data can be relevant for policy decisions, but they cannot be held as a specific tool for benchmarking of the results/yield of an assessee – more particularly for disbelieving the agricultural income shown by the assessee. The assessee has given details of agricultural land holdings. If the Assessing Officer has so much particular with respect to what she has shown, then he should have obtained a certificate as to whether this much yield can be achieved in this area or not? He has compared the results with general information available on the site on Gujarat Agricultural Department. It is also pertinent to observe that both the Revenue Authorities have failed to bear in mind that the agricultural income has been granted exemption from levy of income-tax. Simply for this very reason, let it cannot be expected from the farmer to maintain the details as expected by the Assessing Officer in the show-cause notice. If the Assessing Officer was so meticulous, we would expect from him that, apart from disbelieving the claim of the assessee, a lady, what other evidences he possessed indicating that this lady, i.e. the assessee, has other source of income which has been routed through the claim of the agricultural income. ITA No. 780/Ahd/2019 Geeta Vipulkumar Chaudhary Vs. DCIT AY : 2015-16 6 How she has earned this income of Rs.13,61,892/- from other sources if not from the agricultural activity. To our mind, the learned Assessing Officer should be more sensitive in these types of cases if he is able to lay his hands that an assessee indulged in other business activity or some job. If the Assessing Officer is of the belief that the assessee has different source of income and that income has been routed through agricultural activity for claiming exemption, then he should first undertake the exercise of bringing that material. He cannot simply disbelieve the claim by pointing out one or two irregularities. Therefore, looking to the material available on record, we are of the view that no addition is required to be made out of the claim of the agricultural income made by the assessee. We accordingly allow the appeal of the assessee and delete the disallowance made by the Assessing Officer and confirmed by the learned CIT(A). 7. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 7 th December 2021 at Ahmedabad. Sd/- Sd/- (WASEEM AHMED) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Ahmedabad, Dated 07/12/2021 *Bt /Copy of the Order forwarded to : 1. ! / The Appellant 2. "# ! / The Respondent. 3. $%$&' # # ( / Concerned CIT 4. # # ( ) (/ The CIT(A)- 5. + , # &' , # # &' /DR,ITAT, Ahmedabad, 6. , ./ 0 /Guard file. / BY ORDER, TRUE COPY ह # $ज (Asstt. Registrar) # # &' ITAT, Ahmedabad