Shri Asrafkhan K. Pathan, Ahmedabad V. The Income Tax Officer, Ward-1(3)(1), Ahmedabad

ITA 86/AHD/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9726 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 12-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R POPAT
• Assessee Lawyers: B P SHRIVASTAVA
• Keywords: Capital asset; Business income; Additional evidence; Corroborative evidences; Tax effect; Sham transactions
• Section: 271(1)(c); 44AD; 143(3); 142(1); 133(6); 143(1); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI O. P. MEENA, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 1851/AHD/2013 (ASSESSMENT YEAR :2009-10) INCOME TAX OFFICER, WARD 9(2), AHMEDABAD. VS. SHRI ASRAFKHAN K. PATHAN JAMALPUR KOTHI RANG, JAMALPUR, AHMEDABAD. I.T.A. NO. 86/AHD/2016 (ASSESSMENT YEAR :2009-10) SHRI ASRAFKHAN K. PATHAN JAMALPUR KOTHI RANG, JAMALPUR, AHMEDABAD. VS. INCOME TAX OFFICER, WARD 1(3)(1), AHMEDABAD. [PAN NO.AGCPP 7537 R] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI B. P. SHRIVASTAVA, SR. D.R. RESPONDENT BY : SHRI B. R. POPAT, A.R. DATE OF HEARING 05.04 .2019 DATE OF PRONOUNCEMENT 01.07.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE APPEAL BEING ITA NO. 1851/AHD/2013 FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 21.03.2013 PASSED BY THE CIT(A)-XV, AHMEDABAD ARISING OUT OF THE ORDER DATED 05.12.2011 ISSUED BY THE ITO WARD-9(2), AHMEDABAD U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) AND THE APPE AL BEING ITA ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 2 - NO.86/AHD/2016 FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER DATED 10.11.2015 PASSED BY THE LD. CIT(A)-10, AHMEDABAD A RISING OUT OF THE ORDER DATED. 26.02.1015 PASSED BY THE ITO WARD-1(3) (1) AHMEDABAD U/S. 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR (A.Y.) 200 9-10. SINCE BOTH THE APPEALS RELATE TO THE SAME ASSESSEE, HENCE THE SAME ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED OF BY A CO MMON ORDER. ITA NO. 1851/AHD/2013 A.Y. 2009-10: 2. THE REVENUE HAS FILED FOLLOWING GROUNDS OF APPEA L:- 1A). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X V, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO TREAT THE INCOME FROM CAPITAL GAIN AS LONG TERM CAPITAL GAIN (LTCG) AMOUNTING TO RS. 1,30,35,454/- INSTEAD OF ASSESSED BY THE AO AS SHORT TERM CAPITAL GAIN (STCG) AMOUNTING TO RS.1,30,35,454/-,W HEN THE PURCHASE DEED WAS REGISTERED IN 2005. 1B). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) -XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW DEDUCTION AMOUNTING TO RS.58,25,310/- U/S.54 OF THE ACT, OUT OF LONG TERM CAPITAL GAIN OF RS.1,30,35,454/- TO IGNORE THE FACT THAT NEITHER THE ORIGINAL ASSET NOR THE NEW ASSETARE IN THE NATURE O F RESIDENCE WHICH IS CHARGEABLE TO TAX UNDER THE HEAD 'HOUSE PR OPERTY INCOME' & INFACT THE NEWASSET' HAS BEEN SPECIFICAL LY DESCRIBED AS OPEN PLOT OF LAND' IN THE PURCHASE DEED. 2). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO TREAT RS.3,00,000/- ONLY AS BUSINESS INCOME AND BALANCE OF RS.14,23,000 /- AS AGRICULTURAL INCOME WITHOUT ANY SUPPORTING EVIDENCE OF SALE OF AGRICULTURE PRODUCE. 3). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 3 - 4). IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE DECLARING TOTAL INCOME AT RS.6,76,210/- FILED HIS RETURN OF I NCOME ON 31.03.2010 THROUGH ELECTRONIC MEDIA, WHICH WAS PROCESSED U/S. 143(1) OF THE ACT. SCRUTINY UNDER THE CASS RESULTING ISSUANCE OF NOTIC E U/S. 143(2) DATED 27.08.2010 FOLLOWED BY A NOTICE U/S. 142(1) ALONG T HE QUESTIONNAIRE DATED 25.01.2011. FURTHER NOTICE U/S. 142(1) OF THE ACT D ATED 28.04.2011 WAS ISSUED FOR DETAILS AS PER QUESTIONNAIRE DATED 25.01 .2011 DUE TO CHANGE OF INCUMBENT. 4. THE ASSESSEE ENGAGED IN THE BUSINESS OF CIVIL CO NSTRUCTION IN HIS PROPRIETARY CONCERN NAMELY M/S. ANIK CONSTRUCTION H AS SHOWN GROSS RECEIPTS OF RS.13,22,450/- AND DECLARED PROFIT OF RS.1,05,79 6/- @8% OF TOTAL RECEIPTS; THE RETURN WAS FILED U/S 44AD OF THE ACT. THE AGRIC ULTURAL, INCOME TO THE TUNE OF RS.17,23,000/- WAS ALSO SHOWN BY THE ASSESSEE. A PART FROM THAT, THE ASSESSEE ALSO DERIVED INCOME FROM CAPITAL GAIN OF R S.6,70,194/- DURING THE YEAR UNDER CONSIDERATION AS IT APPEARS FROM THE RECORDS. THE ASSESSEE ACQUIRED RIGHTS AND POSSESSION OF A PROPERTY BEARING SURVEY NO.1778 TO 1786 AT WARD JAMALPUR IN AHMEDABAD DISTRICT IN THE MONTH OF JANU ARY, 1995 UPON PAYMENT OF RS.4,00,000/- THROUGH ACCOUNT PAYEE CHEQUE OUT O F THE TOTAL CONSIDERATION OF RS.4,11,000/-. SUBSEQUENTLY, THE SAID TRANSFER ON S ALE WAS REGISTERED BEFORE DISTRICT REGISTRATION OFFICE AT AHMEDABAD ON 23.11. 2005. THE ASSESSEE THEREAFTER TRANSFERRED THE RIGHT, TITLE AND INTERES T IN RESPECT OF THE SAID PROPERTY ON 04.10.2008 TO A THIRD PARTY. THE ASSESSEE CLAIME D LONG TERM CAPITAL GAIN WHICH WAS NEGATED BY THE LEARNED AO ON THE GROUND T HAT THE PERIOD OF HOLDING CAPITAL ASSETS IS LESS THAN 36 MONTHS AND THE SAME IS, THEREFORE, TREATED TO BE AS ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 4 - SHORT TERM CAPITAL GAIN AND CHARGED ACCORDINGLY. TH E SAME WAS DELETED IN APPEAL BY THE LEARNED CIT(A). HENCE, THE REVENUE IS BEFORE US. THE SECOND ISSUE RELATES TO CLAIM OF EXEMPTION U/S 54 OF THE ACT. IN FACT, INITIALLY THE ASSESSEE CLAIMED FOR EXEMPTION U/S 54 D. SINCE THE ASSESSEE DOES NOT FALL UNDER THE AMBIT OF SUCH EXEMPTION THE SAME HAS BEEN REJECTED. IN APPEAL, THE SAME DELETED BY THE LEARNED CIT(A). IT IS PERTINENT TO MENTION THAT THE AO DISALLOWED T HE ENTIRE AMOUNT OF DEDUCTION U/S 54 OF THE ACT, WHICH WAS IN RESPECT O F UTILIZATION OF PART OF THE LONG TERM CAPITAL GAIN ARISING OUT OF THE TRANSFER OF THE RESIDENTIAL HOUSE WITH LAND APPURTENANT THERETO, FOR ACQUIRING ANOTHER RES IDENTIAL HOUSE. IN FACT, IT WAS THE CASE OF THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY THAT THE ASSESSEE CLAIMED THIS DEDUCTION U/S 54D INSTEAD OF SECTION 5 4. A DEED OF RECTIFICATION WAS ALSO EXECUTED RELATING TO THE DESCRIPTION OF TH E PROPERTY AND REGISTERED THE SAME WITH THE OFFICE OF THE SUB-REGISTRAR RECTIFYIN G THE SCHEDULE FROM LAND TO RESIDENTIAL HOUSE WITH LAND APPURTENANT THERETO. THE SAME WAS ALSO SUBMITTED BEFORE THE FIRST APPELLATE AUTHORITY BY W AY OF AN ADDITIONAL EVIDENCE SINCE THE SAME WAS PREPARED AFTER THE ASSESSMENT PR OCEEDING WAS OVER. THE SAID PLEA WAS, THEREFORE, ACCEPTED BY THE LEARNED C IT(A) AND HE, THUS, DIRECTED THE LEARNED AO TO ALLOW THE DEDUCTION OF RS.58,25,3 10/- OUT OF THE LONG TERM CAPITAL GAIN AS WORKED OUT AND SHOWN BY THE APPELLA NT IN HIS RETURN OF INCOME AT RS.1,30,35,454/- AFTER ACCEPTING THE PLEA OF BON AFIDE MISTAKE ON PART OF THE ASSESSEE OF CLAIMING DEDUCTION U/S 54D OF THE ACT, WHICH WAS COMPLETELY DISALLOWED BY THE LEARNED AO. APART FROM THAT, THE ASSESSEE RECEIVED RS.23,58,310 /- FROM SALE OF CROPS AND DECLARED AGRICULTURAL INCOME OF RS.17,23,000/-. THE ASSESSING OFFICER WAS ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 5 - OF THE VIEW THAT NO AGRICULTURE PRODUCE HAVE BEEN C ULTIVATED ON THE SAID LAND AFTER F.Y. 2002-03. THE ASSESSEES PLEA THAT DUE TO TECHNICAL PROBLEM WITH THE REVENUE DEPARTMENT THE COPY OF FORM 7/12 COULD NO T BE OBTAINED WAS ALSO NEGATED. FURTHER THAT THE LETTER U/S 133(6) ISSUED TO ONE SHRI NARANBHAI RAMESHBHAI PATEL, TO WHOM ASSESSEE CLAIMED TO HAVE SOLD AGRICULTURE PRODUCE SINCE RETURNED TO THE REVENUE WITH THE REMARKS NOT KNOWN.IN THE ABSENCE OF ANY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAS EAR NED ANY AGRICULTURAL INCOME SHOW-CAUSE WAS ISSUED TO THE ASSESSEE ON 21.11.2011 REQUESTING HIM TO EXPLAIN AS TO WHY THE SAID AGRICULTURAL INCOME SHOULD NOT B E TREATED AS HIS OWN BUSINESS INCOME. THOUGH THE ASSESSEE DECLARED INCOM E U/S 44AD BUT NO DETAILS RELATING TO THE WORK CARRIED OUT IN HIS PRO PERTY BUSINESS, THE LEARNED AO ULTIMATELY DISALLOWED THE ENTIRE AGRICULTURAL IN COME TREATING IT AS ASSESSEES OWN BUSINESS INCOME. IN APPEAL, THE SAME WAS RESTRICTED TO RS.3,00,000/- BY THE LEARNED CIT(A) BY TREATING THE SAME AS UNEXPLAINED SOURCE OR NOT FROM AGRICULTURAL ACTIVITY. 5. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THOUGH THE DEED OF SALE WAS REGISTERED IN THE YEAR 2008 UPON PERMISSION DATED 0 8.11.2005 OBTAINED FROM THE COLLECTOR IN RESPECT TO THE PROPERTY PURCHASED BY THE ASSESSEE, THE RIGHT TITLE INTEREST WHEREOF WAS ACQUIRED BY THE ASSESSEE IN F. Y. 1994-95 UPON PAYMENT OF RS.4,00,000/- BY TWO ACCOUNT PAYEE CHEQUE DRAWN WITH THE BOMBAY MEREANTILE CO-OP BANK ON 04.01.1995. THE TRANSFER I S THUS COMPLETED IN TERMS OF SECTION 2(47)(V) OF THE ACT. SUBSEQUENTLY, THE P ROPERTY WAS SOLD ON 04.10.2008 ADMITTEDLY AFTER HOLDING THE SAME FOR MO RE THAN 36 MONTHS WHICH QUALIFIES THE GAIN ON SUCH CAPITAL ASSET AS LONG TE RM CAPITAL GAIN ARISING ON THE SAID TRANSFER. THIS PARTICULAR ASPECT OF THE MA TTER WAS DULY TAKEN CARE OF BY THE LEARNED CIT(A) AND THE CLAIM OF THE ASSESSEE WA S THUS ALLOWED. ON THE ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 6 - CONTRARY, THE LEARNED DR RELIED UPON THE ORDER PASS ED BY THE ASSESSING OFFICER. 6. WE HAVE HEARD THE RESPECTIVE PARTIES, PERUSED TH E RELEVANT MATERIALS AVAILABLE ON RECORD. IT APPEARS FROM THE RECORDS TH AT IN FACT THE ASSESSEE PURCHASED THE PROPERTY DURING F.Y. 1994-95 UPON PAY MENT OF RS.4,00,000/- BY WAY OF TWO ACCOUNT PAYEE CHEQUES DRAWN WITH THE BOM BAY MEREANTILE CO-OP BANK, POSSESSION WHEREOF WAS HANDED OVER TO THE ASS ESSEE BY THE VENDER. IT IS ALSO A FACT THAT THE SAID PROPERTY WAS ULTIMATELY R EGISTERED BY WAY OF A SALE DEED ON 16.12.2005; THEREFORE THE TRANSFER OF THE C APITAL ASSET WAS FULL AND COMPLETE IN SO FAR AS THE PROVISION OF INCOME TAX A CT ARE CONCERNED IN VIEW OF THE EXPANDED DEFINITION OF THE TERM TRANSFER AS C ONTAINED IN SECTION 2(47)(V) OF THE ACT. THUS, REGISTRATION OF THE PROPERTY WHIC H WAS ACQUIRED BY THE ASSESSEE IN THE F.Y. 1994-95 THOUGH EXECUTED IN THE YEAR 2005 BY WAY OF A REGISTERED DEED IS OF NO SIGNIFICANCE. UNDER SECTIO N 53A OF THE TRANSFER OF PROPERTY ACT, WHEN THE POSSESSION OF THE SAID IMMOV ABLE PROPERTY HAS BEEN TAKEN OVER BY THE ASSESSEE IN PART PERFORMANCE OF A CONTRACT, THE TRANSFER IS COMPLETE. THE ASSESSEE ULTIMATELY SOLD OUT THE PROP ERTY ON 04.10.2008. THE ASSESSEE IS THUS HOLDING THE PROPERTY FOR MORE THAN 36 MONTHS BEFORE SELLING OUT THE SAME TO THIRD PARTY IN THE YEAR 2008. THUS, WORKING OUT OF THE CAPITAL GAIN AS SHORT TERM CAPITAL GAIN CONSIDERING THE ACQ UISITIONOF THE PROPERTY IN THE PREVIOUS YEAR OF ITS REGISTRATION RATHER THAN T HE SAME IN THE PREVIOUS YEAR I.E. 1994-95 WHEN THE AGREEMENT WAS EXECUTED AND TH E APPELLANT PAID THE CONSIDERATION FOR SUCH ACQUIRING OF ALL RIGHT TITLE AND INTEREST OVER THE PROPERTY AS DONE BY THE LEARNED AO RIGHTLY FOUND NOT JUSTIFI ED BY THE LEARNED CIT(A). HE, THEREFORE, DIRECTED THE LEARNED AO TO TREAT THE CAPITAL GAIN SO WORKED OUT BY THE APPELLANT IN RETURN OF INCOME AS LONG TERM C APITAL GAIN IN THE ABSENCE OF ANY DISPUTE REGARDING THE SALE CONSIDERATION, CO ST OF ACQUISITION AND ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 7 - INDEXATION. IT ALSO APPEARS FROM THE RECORDS THAT A N APPLICATION FOR ADDITIONAL EVIDENCE WAS ALSO SUBMITTED BEFORE THE LEARNED CIT( A) FOR TAKING INTO CONSIDERATION THE COPY OF RECTIFICATION DEED REGIST ERED WITH THE OFFICE OF SUB REGISTRAR, AHMEDABAD WHICH COULD NOT BE FILED BY TH E ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING SINCE THE MISTAKE C OMMITTED BY THE ASSESSEE WAS DETECTED UPON GETTING THE ASSESSMENT ORDER WHER EIN AT PAGE 3 INSTEAD OF LAND WITH BUILDING THE WORD LAND IS MENTIONED I N THE SCHEDULE OF THE PROPERTY. ON THE BASIS OF THE SUBMISSION AND THE AF FIDAVIT FILED BY THE APPELLANT BEFORE THE LEARNED CIT(A) ON THE PLEA OF BONAFIDE M ISTAKE AND CORRECTION THEREOF A REMAND REPORT WAS CALLED FOR, FOR ADMISSI ON OF THOSE ADDITIONAL EVIDENCES AS PER RULE 46A. IN REPLY WHEREOF, THE LE ARNED AO INDICATED THE SAID LACUNA ON THE PART OF THE ASSESSEE BY NOT MENT IONING RESIDENTIAL HOUSE WITH LAND APPARENT THERETO. SINCE THE ASSESSEE TOO K A CONSIDERABLE TIME TO TAKE SUCH STAND UPON RECTIFICATION OF SUCH MISTAKE AND S UBMITTED THE SUPPORTING DOCUMENT BEING THE RECTIFIED REGISTERED DEED OF SAL E BEFORE THE LEARNED CIT(A) THE ENTIRE MODUS OPERANDI WAS TERMED AS AN AFTER T HOUGHT BY THE LEARNED AO TO AVOID TAX BY THE ASSESSEE. SUCH ADDITIONAL EVIDE NCE WAS THUS NOT ACCEPTABLE AS OPINED BY THE LEARNED AO IN HIS REMAND REPORT. I N REPLY TO THE SAID REMAND REPORT, THE ASSESSEE SUBMITTED BEFORE THE LEARNED C IT(A) THAT BECAUSE OF THE WRONG DESCRIPTION OF THE PROPERTY IN THE REGISTERED CONVEYANCE DEED AS DETECTED BY THE APPELLANT AFTER THE ASSESSMENT ORDE R WAS OBTAINED AND UPON CROSS CHECK OF THE DESCRIPTION OF THE PROPERTY WITH THAT OF THE REGISTERED SALE DEED, THE ASSESSEE HAD NO OTHER ALTERNATIVE BUT TO EXECUTE A CORRECTION DEED AND TO GET IT REGISTERED WITH THE OFFICE OF THE SUB REGISTRAR EVEN AT A SUBSTANTIAL ADDITIONAL COST TOWARDS STAMP DUTY AND OTHER CHARGE S. IT WAS FURTHER CLARIFIED THAT THE ACTUAL QUALIFYING AMOUNT FOR DEDUCTION UND ER THE SECTION WAS ONLY RS.23,58,310/- AS AGAINST THE CORRESPONDING DEDUCTI ON OF RS.1,23,65,260/- AS INADVERTENTLY CLAIMED IN THE RETURN OF INCOME BY TH E APPELLANT WHEN THE ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 8 - APPELLANT AS BECOME FAIR ENOUGH TO ADMIT SAID BONAF IDE MISTAKE HAVING SUBSTANTIAL TAX EFFECT. HAVING REGARD TO THIS PARTI CULAR FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON AS TO WHY LEGITIMATE CLAIM OF DEDUCTION SHOULD BE TREATED AS A COLORABLE DEVICE OR AFTERTHOUGHT ME RELY BECAUSE RECTIFICATION DEED WAS EXECUTED AND REGISTERED AFTER THE ASSESSME NT ORDER PASSED. THE SAID PLEA OF THE ASSESSEE WAS DULY TAKEN CARE OF BY THE LEARNED CIT(A) AS WE FOUND FROM THE ORDER PASSED BY HIM IN ITS PROPER PROSPECT IVE. RELEVANT PART WHEREOF IS AS FOLLOWS: IT IS THEREFORE, IN MY VIEW, THE APPELLANT IS JUST IFIED FOR HIS CLAIM U/S 54 FOR THE PURCHASE OF THIS PROPERTY OUT OF THE TOTAL LONG TERM CAPITAL GAIN AS PER THE PROVISIONS I.E. THE PROPORTIONATE DEDUCT ION OUT OF THE CAPITAL GAIN AS PRAYED BY APPELLANT AFTER ADMITTING HIS MIS TAKE FOR CLAIM U/S 54D INSTEAD OF 54 OF THE ACT. THE A.O. IS DIRECTED TOGRANT THE ELIGIBLE DEDUCTION U/S 54 OF THE ACT TOAPPELLANT ON THE TOTA L PURCHASE OF PROPERTY WITH CONSTRUCTION THERE ON OF RESIDENTIAL NATURE AS PER THE PROVISION OF SECTION 54 OF THE ACT. THE APPELLANT VIDE PARA 4.3 OF THE PAPER BOOK REQUESTED TO ALLOW THE DEDUCTION OF RS. 58,25,310/- AS QUALIFYING AMOUNT FOR PURCHASE OF THIS PROPERTY I.E. PURCHASE CONSIDERATION OF RS. 55,00,000/- AND STAMP DUTY & OTHERWISE EXPENSES FOR REGISTRATION OF RS.3,25,310/-. IT IS HIGHLIGHTED HERE THAT APPELLAN T'S EXPENDITURE IN RESPECT OF CORRECTION DEED IS NOT ENTITLED FOR SUCH DEDUCTION. THE A.O. IS THEREFORE DIRECTED TO ALLOW DEDUCTION OF RS.58,25,3 10/- OUT OF THE LONG TERM CAPITAL GAIN AS WORKED OUT AND SHOWN BY APPELL ANT IN HIS RETURN OF INCOME AT RS.1,30,35,454/- SINCE THE APPELLANT IN G ROUND OF APPEAL PRAYED FORLEGITIMATE DEDUCTION U/S 54 OF THE ACT AN D DURING ASSESSMENT PROCEEDINGS REQUESTED TO CORRECT HIS BONAFIDE MISTA KE OF CLAIM U/S 54D FOR AN AMOUNT OF RS.1,23,65,260/- WHICH WAS COMPLET ELY DISALLOWED BYA.O. BUT, IN APPEAL PROCEEDING PRAYER FOR ALL OWABILITY OF RS.58,25,310/- IS MADE, THEREFORE THIS GROUND IS TR EATED AS PARTLY ALLOWED BECAUSE THE CLAIM OF APPELLANT U/S 54D WAS OF RS. 1,23,65,260/- AND THE ALLOWABLE LEGITIMATE CLAIM U/S 54 OF THE AC T IS ONLY RS. 58,25,310/-. TAKING INTO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER, THE CASE MADE OUT BY THE ASSESSEE TOWARDS LONG TERM CAPITAL GAIN ON THE GROUND OF HOLDING THE PROPERTY FOR MORE THAN 36 MONTHS BEFORE THE SAL E OF THE SAME IN THE YEAR ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 9 - 2008 AND THE PLEA TAKEN BY THE ASSESSEE REGARDING W RONG CLAIM U/S 54D INSTEAD OF 54 AS WELL AS THE MISTAKE TOWARDS DESCRIPTION OF THE PROPERTY AND REGISTERING THE DEED OF RECTIFICATION WITH THE OFFICE OF THE SU B-REGISTRAR FROM LAND TO RESIDENTIAL HOUSE WITH LAND APPURTENANT THERETO A ND AFTER CAREFUL CONSIDERATION OF THE REMAND REPORT AND THE REPLY FI LED BY THE ASSESSEE THERETO PARTICULARLY THE DEED OF RECTIFICATION WHICH WAS TA KEN INTO CONSIDERATION BY LEARNED CIT(A) U/S 46A OF THE ACT WE FIND NO INFIRM ITY IN ALLOWING THE PRAYER OF THE APPELLANT BY THE LEARNED CIT(A) WHICH, ACCOR DING TO US CLEAR AND SPECIFIC AND WITHOUT ANY AMBIGUITY SO AS TO WARRANT INTERFERENCE.THUS THE SAME IS HEREBY UPHELD. CONSEQUENTLY, THE APPEAL FAILS AN D IS ACCORDINGLY DISMISSED. 7. NEXT GROUND OF APPEAL RELATES TO THE ORDER PASSE D BY THE LEARNED CIT(A) IN GRANTING THE LEARNED AO TO TREAT RS.3,00, 000/- ONLY AS BUSINESS INCOME AND BALANCE OF RS.14,23,000/- AS AGRICULTURA L INCOME OF THE ASSESSEE. 8. THE CASE OF THE ASSESSEE IS THIS THAT THE ASSESS EE HAS BEEN THE LEGAL AND FACTUAL OWNER OR THE USER BY OPERATION OF LAW OF HU GE AREA OF AGRICULTURAL LAND MEASURING ABOUT 500 BIGHAS SITUATED AT VILLAGE HIRA PUR AND RASULPURA. SUBSTANTIAL PORTION OF THE SAME WAS CONTROLLED BY T HE ASSESSEE AND ALSO LEGALLY OWNED BY HIM IN HIS NAME PART OF WHICH WAS ALSO INH ERITED BY THE ASSESSEE WHERE AGRICULTURAL OPERATION WAS CARRIED ON FOR LAS T SO MANY YEARS. CERTAIN AGRICULTURAL LANDS WHICH WAS INHERITED BY THE ASSES SEE AFTER THE DEMISES OF HIS PARENTS WAS ALSO SUBSTANTIATED BY DOCUMENTARY EVIDE NCE SUCH AS DEATH CERTIFICATES. CERTAIN AGRICULTURAL LAND WAS ALSO AC QUIRED BY VIRTUE OF THE ORDER OF A COMPETENT COURT. SINCE THE SUBSTANTIAL PART OF THE AGRICULTURAL LAND AS NARRATED ABOVE CAME INTO HIS POSSESSION DURING THE COURSE OF A.Y. 2009-10 OR A LITTLE EARLIER AS A RESULT WHEREOF THE AGRICULTUR AL INCOME OF THE ASSESSEE SUBSTANTIALLY INCREASED THE RETURNED AGRICULTURAL I NCOME OF RS.11,85,000/- AND ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 10 - RS.18,30,560/- WAS SHOWN IN A.Y. 2010-11 AND A.Y. 2 011-12 RESPECTIVELY. SUCH AGRICULTURAL INCOME IN THE ASSESSMENT YEAR WAS ALSO ACCEPTED BY THE DEPARTMENT. THE ASSESSEE BEFORE THE FIRST APPELLANT AUTHORITY BY WAY OF A LETTER DATED 22.08.2012 SUBMITTED THAT HE WAS IN POSSESSIO N OF 568.87 BIGHAS OF LAND COPIES OF THE SAID EXTRACT DETAILS WAS ALSO ANNEXED THERETO WHICH WAS SUBJECTED TO REMAND REPORT. TAKING INTO CONSIDERATION THE ENT IRE ASPECT OF THE MATTER, THE LEARNED CIT(A) HOLD AS FOLLOWS: I AM PARTLY INCLINED WITH THE CONTENTION OF APPELL ANT THAT IN OF 568 BIGHAS LAND HOLDING AND AGRICULTURAL INCOME SHOWN Y EARAFTER YEAR, IT CANNOT BE HELD THAT ENTIRE AGRICULTURAL INCOME IS A PPELLANT'S BUSINESS INCOME. THE APPELLANT'S BUSINESS OF CONTRACTOR IS A SMALL BUSINESS AND ENTITLED FOR THE BENEFIT OF SECTION 44AD OF THEACT. AS PER THE PROVISIONS, THE APPELLANT IS NOT REQUIRED TO MAINTAINBOOKS OF A CCOUNT AS PER SECTION 44AA OF THE ACT IF HE AVAILS THEBENEFIT U/S 44 AD O F THE ACT. IN THIS REFERENCE, HE CANNOT FURNISH THE COMPLETE DETAIL OF WORK CARRIED OUT EXCEPT HIS TOTAL RECEIPT FALLING UNDER THE SECTION. IN THE ABSENCE OF ANY SUCH DETAIL AND ANY FINDINGS IN THIS REGARD FROM A. O. THAT HE HAD CARRIED OUT WORK TO SUCH AN EXTENT THAT GENERATED I NCOME TO THE EXTENT OF RS.17,23,000/-, THE A.O.'S CONCLUSION IS BASED O N PRESUMPTION AND NOT JUSTIFIED. THE APPELLANT PRODUCEDEXTRACT OF LAN D HOLDING SHOWING AGRICULTURAL ACTIVITIES BEING CARRIED ON THOSE LAND , SALE BILLS OF CROP AND OTHER DETAILS. FOLLOWING THE PRINCIPLE OF CONSISTEN CY, ALL SUCH EVIDENCES ANDAGRICULTURAL INCOME CANNOT BE TERMED AS IN GENUI NE TRANSACTION OR SHAM TRANSACTIONS. FROM THE 7/12 EXTRACTS FOLLOWING EXAMPLE REFLECT THAT APPELLANT WAS CARRYING ON THE AGRICULTURAL ACT IVITIES. (I) SURVEY NO. 277/KA/PAIKI AT SANAND TALUKA VILLAGE HI RAPUR (EXTRACT NO. 0108030), APPELLANT IS ONE OF THE OWNE R AND FOR F.Y.2008-09 KHARIF CROP OF JWAR WAS CULTIVATED ON 1 6 HECTOR 26 ARE & 85 SQ. MT. AREA BY APPELLANT. (II) SURVEY NO. 269 AT VILLAGE HIRAPUR TAL. SANAD (EXTRA CT NO. G01 08034), APPELLANT IS ONE OF THE OWNER AND FOR F .Y. 08-09 KHARIF CROP OF WHEAT WAS CULTIVATED ON 6 HECTOR 95 ACRE 05 SQ. MT. AREA. (III) SURVEY NO. 262 AT VILLAGE HIRAPUR TAL. SANAD (EXTRA CT NO. G 0108032), THE APPELLANT IS ONE OF THE OWNER AND KHA RIF CROP OF WHEAT WAS CULTIVATED ON 11 HECTOR 11 ACRE 88 SQ. MT. AREA IN F.Y. 08-09. ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 11 - IT IS THEREFORE THE APPELLANT'S INCOME FROM AGRICUL TURAL ACTIVITIES IS NOT DOUBTED. THE ONLY ISSUE REMAIN IS THE REASONABILITY OF RS.17,23,000/-FROM TOTAL SALE CONS IDERATION OF CROP OF RS. 23,58,310/- IN THE ABSENCE OF COMPLETE EVIDENCE OF EXPENDITURE INCURRED BY APPELLANT. AS PER THE ACCOU NT, THE TOTAL EXPENDITURE OF RS. 6,35,310/- FOR TOTAL RECEIPT OF RS. 23,58,310/- ARE ONLY 26.93% WHICH IS NOT A CORRECT PICTURE. HON 'BLE GUJARAT HIGH COURT IN A RECENT DECISION IN THE CASE OF SPEC IAL LAND ACQUISITION OFFICER VS. KODASBHAI JEVABHAI NAMDAR(2 002) HELD THAT 'IN THE PROCESS OF LAND ACQUISITION WHILE TAKI NG LAND VALUE AS ON MARKET VALUE AND THE SAME IS INCREASED BY VAL UE OF CROP EXISTING ON LAND, IN THIS REGARD IN THE ABSENCE OF ANY DETAILS EVIDENCES AVAILABLE OF AGRICULTURAL EXPENDITURE, TH E SAME ISTAKEN AT 50% OF VALUE OF CROP AND THE SAME IS REASONABLE. ' IN THE CASE OFAPPELLANT SUCH DETAIL IS PARTLY AVAILABLE BUT PAR TLY NOT WITH EVIDENCES. IT ISTHEREFORE A REASONABLE PERCENTAGE O F 40% OF THE EXPENDITURE IF TAKEN, IT WILL RESULT IN TO AGRICULT URAL EXPENDITURE OF RS.9,43,324/- (40% OF RS.23,58,310/-). THIS W WI LL LEAD TO CONCLUSION THAT THE REASONABLE AND ALLOWABLE AGRICU LTURAL INCOME OF THE APPELLANT WILL BE OF RS.14,14,986/- ( 2358310 - 943324). AS AGAINST THE APPELLANT HAS SHOWN RS.17,2 3,000/- THEREFORE THE DIFFERENCE OF RS.3,08,014/- (17,23,00 0 14,14986/- ) SAY RS.3,00,000/- CAN REASONABLY BE TREATED AS IN COME OFAPPELLANT FROM UNDISCLOSED SOURCES OR NOT FROM AG RICULTURAL ACTIVITY. IT IS THEREFORE, THE A.O. IS DIRECTED TO TREAT ONLY RS.3,00,000/- AS TAXABLE INCOME AND ALLOW THE BENEF IT TO APPELLANT FOR BALANCE OF RS.14,23,000/- AS AGRICULT URAL INCOME. THIS GROUND OF APPELLANT IS PARTLY ALLOWED. IN THE ABSENCE OF THE DETAIL AND/OR EVIDENCES REGAR DING THE AGRICULTURAL EXPENDITURE THE REASONABLE EXPENDITURE OF 40% OF TH E VALUE OF CROP HAS BEEN ESTIMATED AND DETERMINED BY THE LEARNED CIT(A) RESU LTING TO AGRICULTURAL EXPENDITURE OF RS.9,43,324/- BEING 40% OF RS.23,58, 310/- SEEMS TO BE RATIONAL AND THUS ACCEPTABLE. THEREFORE THE DIFFERENCE OF RS .3,08,014/- (17,23,000 14,14,986) I.E. AROUND 3,00,000/- AS HAS BEEN TREAT ED AS INCOME OF THE APPELLANT ON UNDISCLOSED SOURCE AND NOT FROM AGRICULTURAL ACT IVITIES FOUND TO BE ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 12 - ACCEPTABLE AND WITHOUT ANY AMBIGUITY. HENCE WE DECL INE TO INTERFERE WITH THE ORDER IMPUGNED AND THE SAME IS HEREBY UPHELD. IN TH E RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.86/AHD/2016 FOR A.Y. 2009-10: 9. THE ASSESSMENT PROCEEDING IN RESPECT OF THE RETU RN FILED BY THE ASSESSEE ON 31.03.2010 WAS FINALIZED BY THE LEARNED AO U/S 1 43(3) OF THE ACT ON 05.12.2011 UPON COMPUTATION OF TOTAL INCOME AT RS.1 ,52,83,020/- AFTER MAKING ADDITION ON THE FOLLOWING: I. DISALLOWANCE OF RS.1,35,54,000/- OF DEDUCTION U/ S 54 ON LTCG AND TREATING THE INCOME FROM CAPITAL GAIN AS STCG II. AGRICULTURE INCOME OF RS.17,23,000/- TREATED AS UNACCOUNTED BUSINESS INCOME PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT WAS INI TIATED AGAINST THE ASSESSEE; NOTICE U/S. 274R.W.S. 271(1)(C) OF THE AC T DATED 05.12.2011 WAS ALSO ISSUED AND DULY SERVED UPON THE ASSESSEE. THE ASSES SEE IN RESPONSE TO THE ABOVE NOTICE SUBMITTED THE FOLLOWING BEFORE THE LEA RNED AO DURING THE COURSE OF PENALTY PROCEEDING. [4] IN RESPONSE TO THE ABOVE NOTICE, THE ASSESSEE HAD FILED HIS REPLY DTD.29/01/2015. IN THE SAID REPLY THE ASSESSEE INTE R ALIA NARRATED THE OPERATIVE PART OF THE ORDER IN QUANTUM APPEAL WHICH IS AS FOLLOWS: ..[4.3.3.C] IT IS, THEREFORE, THE APPELLANT'S INC OME FROM AGRICULTURAL ACTIVITIES IS NOT DOUBTED. THE ONLY IS SUE REMAIN IS THE REASONABILITY OF RS. 17,23,000/- FROM TOTAL SAL E CONSIDERATION OF CROP OF RS. 23,58,310/- IN THE ABSENCE OF COMPLE TE EVIDENCE OF EXPENDITURE INCURRED BY APPELLANT AS PER THE ACCOUN T, THE TOTAL EXPENDITURE OF RS. 6,35,310/- FOR TOTAL RECEIPT OF RS. 23,58,310/- ARE ONLY 26.93% WHICH IS NOT A CORRECT PICTURE. HON 'BLE GUJARAT ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 13 - HIGH COURT IN A RECENT DECISION IN THE CASE OF SPEC IAL LAND ACQUISITION OFFICER VS KODASBHAI JEVABHAI NAMDAR (2 002) HELD /THAT 'IN THE PROCESS OF LAND ACQUISITION WHILE TAK ING LAND VALUE AS ON MARKET VALUE .AND THE SAME IS INCREASED BY VA LUE OF CROP EXISTING ON LAND, IN THIS REGARD IN THE ABSENCE OF ANY DETAILS/EVIDENCES AVAILABLE OF AGRICULTURAL EXPENDI TURE, THE SAME IS TAKEN AT 50% OF VALUE OF CROP AND THE SAME IS RE ASONABLE/' IN THE CASE OF APPELLANT SUCH DETAILS IS PARTLY AVAILA BLE BUT PARTLY NOT WITH EVIDENCES. IT IS, THEREFORE, A REASONABLE PERCENTAGE OF 40% OF THEEXPENDITURE IF TAKEN, IT WILL RESULT INTO AGRICULTURE EXPENDITURE OFRS.9,43,324/- (40% OF RS. 23,58,310/- ). THIS WILL LEAD TO CONCLUSION THAT THE REASONABLE AND ALLOWABL E AGRICULTURAL INCOME OF THE APPELLANT WILL BE OF RS. 14,14,986/- (23,58,310 - 9,43,324). AS AGAINST THIS APPELLANT H AS SHOWN RS. 17,23,000/-THEREFORE THE DIFFERENCE OF RS. 3,08,014 /- (17,23,000 - 14,14,986) SAY RS. 3,00,000/- CAN REASONABLE BE TRE ATED AS INCOME OF APPELLANT FROM UNDISCLOSED SOURCES OR NOT FROM AGRICULTURAL ACTIVITY. IT IS, THEREFORE, THE AC IS DIRECTED TO TREAT ONLY RS. 3,00,000/- AS TAXABLE INCOME AND ALLOW THE BENEFIT TO APPELLANT FOR BALANCE OF RS. 14,23,000/- AS AGRICUL TURAL INCOME.' AFTER CONSIDERING THE ENTIRE ASPECT OF THE MATTER P ARTICULARLY THE EXPLANATION RENDERED BY THE ASSESSEE AND THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY WHEREBY AND WHEREUNDER THE LEARNED AO WAS DIRECTED TO TREAT ONLY 3,00,000/- AS TAXABLE INCOME AND TO RENDER THE BENE FIT TO THE APPELLANT FOR THE BALANCE AMOUNT OF RS.14,23,000/- AS AGRICULTURAL IN COME. THE ASSESSING OFFICER FINALITY WHILE IMPOSING PENALTY OF RS.16,86 ,851/- CONCLUDED AS FOLLOWS: [5] THE EXPLANATION OFFERED BY THE ASSESSEE IS CO NSIDERED CAREFULLY, HOWEVER, IT IS NOT ACCEPTABLE. AS PER DETAILS AVAIL ABLE ON RECORD THE ASSESSEE HAS PURCHASED PROPERTY ON 23.11.2005 AND S OLD THE SAME ON 04.10.2008 AND THEREFORE THE PERIOD OF HOLDING OF C APITAL ASSETS IS LESS THAN 36 MONTHS. SINCE, THE PERIOD OF HOLDING WAS LE SS THAN 36 MONTHS INCOME IS TAXED AS SHORT TERM CAPITAL GAIN AND EXEM PTION CLAIMED U/S. 54 D OF RS.1,35,54,000/- WAS DISALLOWED AS THE ASSE SSEE HAS WRONGLY CLAIMED EXEMPTION-U/S.54 D OF THE ACT. THE ASSESSEE HAS EVEN NOT FILED ANY EXPLANATIONS DURING THE COURSE OF ASSESSMENT PR OCEEDING WHEN ASKED THE DETAILS OF CLAIMED OF EXEMPTION U/S. 54 D OF THE ACT. IN APPEAL ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 14 - THE LEARNED CIT(A) HAS DIRECTED TO CONSIDER INCOME FROM CAPITAL GAIN AS LONG TERMCAPITAL GAIN OF RS.1,30,35,454/- AND ALLOW THE DEDUCTION OF RS.58,25,310/- U/S. 54 OF THE ACT. INSTEAD OF 54 D AS CLAIMED BY THE ASSESSEE AND CONFIRMED THE ADDITION OF RS. 72,10,14 4/-. REGARDING AGRICULTURE INCOME ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE TO SUBSTANTIATE HIS CLAIM OF CULTIVATE AGR ICULTURE PRODUCE ALSO NO EVIDENCE WAS PRODUCED TO PROVE THE OWNERSHIP OF LAND IN THE NAME OF THE ASSESSEE. THE ASSESSEE ALSO FAILED TO FILE ANY EXPLANATION OF SHOW CAUSE ISSUED REQUESTING AS WHY AGRICULTURE INCOME S HOULD NOT BE TREATED AS INCOME FROM UNDISCLOSED SOURCE. EVEN THE LEARNED CU (APPEAL) HAS DIRECTED TO TREAT RS.3,00,000/- AS TAX ABLE INCOME AS INCOME FROM UNDISCLOSED SOURCE. FURTHER, THE JUDGEMENT RELIED UPON BY THE ASSESSEE IN HIS SUBMISSION IS NOT SQUARELY APPLICABLE IN THIS CASE AS THEY ARE DIFFERENT AND FACT AND CIRCUMSTANCE OF THE CASE. [6] IN VIEW OF THE DISCUSSION MADE IN THE FOREGOIN G PARAGRAPHS, IT IS CLEAR THAT THE ASSESSEE HAD CONSCIOUSLY AND DELIBER ATELY FURNISHED INACCURATE PARTICULARS OF INCOME TO THE TUNE OF RS. 75,10,144/- AND HENCE IT IS LIABLE FOR PENALTY U/S. 271(1)(C) OF TH E ACT. 8. THEREFORE, I AM SATISFIED THAT THIS IS A FIT CA SE FOR LEVY OF PENALTY U/S 271(1)C) OF THE ACT. THE MAXIMUM PENALTY LEA VI ABLE @ 300% OF THE TAX SOUGHT TO EVADED WORKS OUT TO RS.50,60,533/- AN D MINIMUM PENALTY @ 100% COMES TO RS. 16,86,851/-. LOOKING TO THE FAC TS OF THE CASE, I LEVY MINIMUM PENALTY OF RS.16,86,851/- U/S. 271(1)(C) OF TIE I.T. ACT. IN APPEAL, THE PENALTY WAS IN TURN CONFIRMED BY TH E FIRST APPELLANT AUTHORITY. HENCE, THE INSTANT APPEAL BEFORE US. WHILE CONFIRMING THE SAME THE LEARNED CIT(A) OBSERV ED AS FOLLOWS: 10.3 I HAVE NOTICED THAT THE ARGUMENT OF THE ASSE SSEE IS TOO TECHNICAL AND THUS DIFFICULT TO DIGEST. FROM THE WORDINGS USE D BY MY PREDECESSOR IN THE APPELLATE ORDER IN QUANTUM, IT THOUGH APPEAR S THAT HE HAS MADE A SEPARATE ESTIMATION OF AGRICULTURAL EXPENSES AT RS. 3,00,000/- WHICH HAS GOT NOTHING TO DO WITH THE CORRESPONDING ADDITION F OR RS. 17,23,000/- MADE BY THE AO FOR WHICH PENALTY WAS INITIATED. HOW EVER, GOING BY THE ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 15 - LOGIC BEHIND THE ACTION OF CIT(A) AND READING BETWE EN THE LINES, IT IS VERY CLEAR THAT HE HAS SUSTAINED THE ADDITION TO TH E EXTENT OF RS.3,00,000/- FOR ALL PRACTICAL PURPOSES AND INTENT AND ONE IS ALWAYS REQUIRED TO GO INTO THE ROOT OF THE ISSUE RATHER TH AN MOVING AROUND THE WORDINGS OF THE ORDER. 10.4 IN VIEW OF WHAT HAS BEEN MENTIONED ABOVE, I H OLD THAT THE AO WAS RIGHT IN LEVYING PENALTY IN RESPECT OF THIS PAR T OF THE ADDITION OF RS.3,00,000/-. 10.5 IN THE RESULT, THIS GROUND OF APPEAL IS DIS MISSED. IT IS AN ADMITTED POSITION THAT THE FIRST APPELLATE AUTHORITY PASSED HIS ORDER ONLY ON ESTIMATION BASIS OF THE AGRICULTURAL EXPENDITURE AND THERE IS CLEARLY NO ELEMENT OF FURNISHING OF INACCURATE PART ICULARS OF INCOME OR CONCEALMENT OF INCOME SO AS TO JUSTIFY LEVY OF PENA LTY UNDER SECTION 271(1)(C) OF THE ACT IN THIS REGARD. IN VIEW OF THE SPECIFIC FACTS OF THE CASE AS SUMMAR IZED ABOVE, WE FIND NO REASON FOR IMPOSING PENALTY UNDER SECTION 271(1) (C) OF THE ACT. IN THIS RESPECT, AT THE TIME OF INSTANT APPEAL, THE ASSESSEE RELIED UPON THE JUDGMENT PASSED BY THE ORIGINAL JURISDICTIONAL HIGH COURT IN THE MATTER OF BOMBAYWALA READYMADE STORES. IN THAT PARTICULAR CASE, DURING SEARCH EXCESS STOCK WAS FOUND ON PHYSICAL VERIFICATION AS AGAINST BOOK STOCK WORKED OUT AS ON DATE OF SEARCH. THE ASSESSEE, HOWEVER, DID NOT FILE RETURN OF INCOME FO R RELEVANT YEAR IN WHICH SEARCH HAD BEEN CONDUCTED. THE ASSESSMENT WAS FINAL IZED ON THE BASIS OF MATERIALS AVAILABLE WITH THE ASSESSING OFFICER. PEN ALTY PROCEEDING WAS ALSO INITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME. SINCE THE INCOME WAS ASSESSED ON ESTIMATED BASIS BY THE REVENUE IN THE A BSENCE OF THE RETURN OF ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 16 - INCOME NOT FILED BY THE ASSESSEE, PENALTY HAS BEEN HELD NOT TO BE LEVIED U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME. TAKING INTO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER AND APPLYING THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL H IGH COURT, WE FIND NO MERIT IN IMPOSING PENALTY IN THE PRESENT FACTS AND CIRCUM STANCES OF THE CASE WHEN THE QUANTUM ORDER HAS BEEN PASSED RESTRICTING THE DISAL LOWANCE TO THE TUNE OF RS.3,00,000/- ONLY ON ESTIMATED BASIS. FURTHER THAT IN THE ABSENCE OF ANY CONCLUSIVE EVIDENCE TO ESTABLISH CONCEALMENT OF PAR TICULAR OF INCOME PENALTY ON ESTIMATED BASIS IS NOT PERMISSIBLE IN THE EYE OF LAW. IN THAT VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE FOR LEVY OF CONCEALMENT PENALTY. PENALTY ON SUCH ESTIMATED DISA LLOWANCE IS THIS, LIABLE TO BE QUASHED. WE, THEREFORE, DIRECT TO DELETE THE SAM E. ASSESSEES APPEAL IS, THUS, ALLOWED. 10. IN THE COMBINED RESULT, REVENUES APPEAL IS DIS MISSED AND ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 01/07/2019 SD/- SD /- ( O. P. MEENA) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 01/07/2019 PRITIYADAV, SR.PS ITA NO.1851/AHD/2013&ITA NO.86/AHD/2016 ASRAFKHAN K. PATHAN ASST.YEAR 2009-10 - 17 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-XV & 10, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 30.05.2019 (DICTATION PAGES18) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04.06.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S10.06.2019 + 24.06.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER