M/S GULMOHAR DEVELOPERS, JAIPUR V. INCOME TAX OFFICER, WARD-5-2, JAIPUR

ITA 867/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6516 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 14-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAUL
• Section: 143(3); 5(2)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH ,U-DS-LSUH] MIK/;{K ,O LAANHI XKSLKBZ] U;KF;D LNL; DS LE{K BEFORE: SHRI N.K. SAINI, V.P. & SHRI SANDEEP G OSAIN, JM VK;DJ VIHY LA-@ ITA NO. 867/JP/2019 U/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2015-16 M/S. GULMOHAR DEVELOPERS 395, NARNOLI MANSION SANGANERI GATE, JAIPUR CUKE VS. THE ITO WARD- 5(2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AALFG 9450 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPOND ENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR JKTLO DH VKSJ LS@ REVENUE BY: SMT. RUNI PAUL , ADDL. CIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/09/2020 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT: 16/09/2020 VKNS'K@ ORDER PER SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT (A)- 2, JAIPUR DATED 22.05.2019 FOR THE ASSESSMENT YEAR 2015- 16 PASSED UNDER 143(3) OF THE INCOME TAX ACT, 1961 ON THE GROUNDS MENTIONED HEREINBELOW. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 2,73,020/- OUT OF RS. 8,54,980/- MADE BY THE AO ON ACCOUNT OF ALLEGED ITA NO. 867/JP/2019 M/S. GULMOHAR DEVELOPERS. VS ITO, WARD- 5(2), ,JAI PUR 2 UNDISCLOSED INCOME INTRODUCED IN THE FORM OF AGRICU LTURAL INCOME. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E AO HAS ERRED IN REDUCING THE AGRICULTURAL INCOME BY RS . 2,73,020/- WITHOUT ANY BASIS OR WITHOUT CONSIDERING THE SUBMISSION AND CREDIBLE EVIDENCE SUBMITTED BY THE A SSESSEE DUE TO PREVAILING COVID-19 PANDEMIC CONDITION, THE HEARING OF THE APPEALS ARE CONCLUDED THROUGH VIDEO CONFERENCE. 2.1 APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, TH E ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN THE AGRICULTURAL ACTIVITY. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 31-08-2015 DECL ARING TOTAL INCOME OF RS. NIL. THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 23-12-2017 DETERMINING TOTAL INCOME AT RS. 8,54,984 /- INTER ALIA MAKING THE ADDITION OF RS. 8,54,984/- BY TREATING THE AGRI CULTURAL INCOME AS NON- AGRICULTURAL OF THE ASSESSEE. 2.2 IN FIRST APPEAL, THE LD. CIT(A) HAS SUSTAINED T HE ADDITION TO RS. 2,73,020/- BY DISALLOWING 15% OF THE AGRICULTUR E INCOME DECLARED BY THE ASSESSEE. THE RELEVANT OBSERVATION OF THE LD. C IT(A) AT PARA 2.3.3 OF HER ORDER IS AS UNDER:- 2.3.3 ON PERUSAL OF OVERALL FACTS, IT IS SEEN THA T THE BILLS SUBMITTED WITH REGARD TO SALES OF SUCH PRODUC E WAS NOT DOUBTED. THE ESTIMATION HAS BEEN MADE ONLY ON ASSUM PTION OF SELLING AT FIXED PRICE. THEREFORE, THE SALES PRI CE OF ITA NO. 867/JP/2019 M/S. GULMOHAR DEVELOPERS. VS ITO, WARD- 5(2), ,JAI PUR 3 AGRICULTURE PRODUCE AS DECLARED BY THE ASSESSEE AT RS. 26,28,300/- IS ACCEPTED. FURTHER ASSESSEE CLAIMED EXPENSES AGAINST AGRICULTU RE RECEIPT. LOOKING TO OVERALL FACTS AND FOLLOWING THE DECISION OF HON'BLE BENCH IN DURGA PRASAD YADAV CASE, SEEING THE BETTER LOCATION OF THE LAND ETC. IT IS REASONABLE T O RESTRICT THE EXPENSES TO 15% AGAINST 30% TAKEN BY THE AO. ACCORD INGLY, INCOME FROM AGRICULTURE PRODUCE IS WORKED OUT AT RS . 22,34,055/- (RS.26,28,300 X 85%). THUS TOTAL AGRICU LTURAL INCOME COMES TO RS. 26,30,758/- (22,34,055 + 3,96,7 03) AGAINST RS. 29,03,778/- DECLARED BY THE ASSESSEE. A DDITION OF RS. 2,73,020/- IS UPHELD. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 2.3 AT THE OUTSET OF THE HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT SIMILAR ISSUE HAS BEEN DECIDED BY THE ITAT JAIPUR B ENCH IN THE CASE OF M/S PINK CITY RESORTS LTD. VS ITO (ITA NO. 1128/JP/ 2019 DATE OF ORDER 25-11-2019). THE LD.AR OF THE ASSESSEE ALSO FILED T HE WRITTEN SUBMISSION WHICH HAS BEEN TAKEN INTO CONSIDERATION. 2.4 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF LOWER AUTHORITIES. 2.5 WE HAVE HEARD THE LD. COUNSELS FOR BOTH THE PAR TIES AND WE HAVE ALSO PERUSED THE MATERIALS PLACED ON RECORD, DELIBE RATED UPON JUDGEMENTS CITED BY THE PARTIES AS WELL AS THE ORDERS OF THE R EVENUE AUTHORITIES. IT IS NOT IMPERATIVE TO REPEAT THE FACTS OF THE CASE AS I N PRINCIPLE SIMILAR ISSUE WAS DECIDED BY ITAT JAIPUR BENCH IN THE CASE OF M/S . PINK CITY RESORTS ITA NO. 867/JP/2019 M/S. GULMOHAR DEVELOPERS. VS ITO, WARD- 5(2), ,JAI PUR 4 LTD VS ITO (SUPRA), THE SISTER CONCERN OF THE ASSES SEE COMPANY, BY OBSERVING AS UNDER:- 2.6 I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM THE RECORD THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESS EE HAS DISCLOSED NET AGRICULTURAL INCOME OF RS. 21,66,534/- FROM AGRICUL TURAL HOLDINGS AROUND 90 BIGHAS OF IRRIGATED AGRICULTURE LAND. COP Y OF KHASRA GIRDAWARI AND PATWAR HALKA REPORT IS AVAILABLE ON P APER BOOK PAGE NO. 6 TO 7. THIS INCLUDES INCOME BY AGRICULTURAL BY-PRODUCT OF RS.5,69,050/- AND SALE OF TREES OF RS. 3,73,500/- . THIS MEANS THAT PER BIGHA PER ANNUM AGRICULTURAL INCOME WAS SHOWN AT RS . 24,073/- WHICH IS VERY REASONABLE LOOKING TO THE COST OF AGRICULTU RAL PRODUCTS SUCH AS GWAR, MUSTARD ETC. HOWEVER THE AO HAS ACCEPTED NET AGRICULTURAL INCOME TO THE EXTENT OF RS. 13,42,344/- BY ESTIMATI NG THE AGRICULTURE INCOME AS PER AGRICULTURE DEPARTMENT/TEHSILDAR REPO RTS WHICH IS GENERAL IN NATURE AND BASED ON SURVEY OF WHOLE STAT E/DISTRICT WHEREAS THE AGRICULTURE YIELD DEPENDS UPON QUALITY OF LAND/ IRRIGATION FACILITIES, MANURE AND SEEDS QUALITY AND THE GENERAL REPORT/SUR VEY REPORT IS NOT APPLICABLE EVERYWHERE . FROM THE RECORD, I FOUND THAT THE ENTIRE AGRICULTURAL PRODUCE OBTAINED BY WAY OF CROPS IS FU LLY VOUCHED AND HAS BEEN SOLD THROUGH KRISHI UPAJ MANDI. THE SALE IS BE YOND DOUBT. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DISPRO VE THE SALE VOUCHERS AND NO ENQUIRY HAS BEEN CONDUCTED FROM THE PARTIES THROUGH WHOM THE AGRICULTURAL PRODUCE WAS SOLD. ANY ENQUIRY MADE FROM THESE PARTIES WOULD HAVE DISCLOSED THE TRUTH BUT TH IS WAS NOT DONE BY THE AO. HE HAS PREFERRED TO ACT ON ESTIMATE AND GUE SS WORK. AT FIRST THE AO ESTIMATED THE GROSS AGRICULTURAL PRODUCE O N THE BASIS OF A REPORT FROM THE TEHSILDAR BUT WHEN THE SAME WAS AGI TATED BY THE ASSESSEE CLAIMING THAT THE LAND OWNED BY THE ASESSE E WAS MORE FERTILE AND CAPABLE OF YIELDING MORE CROPS IN COMPARISON T O AN AVERAGE LAND AS REPORTED BY THE TEHSILDAR. HOWEVER, THE AO DID N OT ACCEPT THE CONTENTION OF THE ASSESSEE. THIS SHOWS THE VARIATIO N ON WORKING OF AGRICULTURAL INCOME ON ESTIMATE BASIS. FURTHER THE AO HAS ESTIMATED PRICE AS WELL YIELD WHEREAS HE IS NOT A SPECIALIST FOR THIS AND MADE AN ADDITION OF RS. 8,24,190/-. THUS I FOUND THAT MEREL Y ON ESTIMATE BASIS THE AO HAS REJECTED THE ASSESSEE'S CLAIM OF AGRICUL TURAL PRODUCE WHICH IS DULY SUPPORTED BY THE BILLS AND VOUCHERS. THE A O ACTED ON THE ITA NO. 867/JP/2019 M/S. GULMOHAR DEVELOPERS. VS ITO, WARD- 5(2), ,JAI PUR 5 BASIS OF SUSPICION AND DOUBT. IT IS SETTLED POSITIO N OF LAW THAT SUSPICION HOWEVER STRONG CANNOT TAKE THE PLACE OF EVIDENCE. I N THIS CASE THE VOUCHERS OF SALE CANNOT BE REJECTED ON THE BASIS OF SUSPICION AND DOUBT. FOR THIS PURPOSE, RELIANCE CAN BE PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS 1. UMA CHARAN SHAW & BROTHERS 37 ITR 271 (SC) 2. CIT VS. ANUPAM KAPOOR 299 ITR 179 (P&H) 3. CIT VS. DHIRAJ LAL GIRDHARI LAL 26 OTR 736 4. DHAKESHWARI COTTON MILLS 26 ITR 775 (SC) 5. STATE VS. GULZARI LAL TONDON 1979 AIR 1382 (SC) 6. J.A. NAIDU VS. STATE OF MAHARASTRA 1979 AIR 1537 (S C) FURTHER MORE, I ALSO OBSERVED THAT IN THE IMMEDIATE LY PRECEDING YEAR THE SCRUTINY ASSESSMENT WAS FRAMED AND AGRICULTURAL INCOME SO DISCLOSED BY THE ASSESSEE WAS ACCEPTED BY THE DEPAR TMENT AT RS. 31,27,010/- WHEREAS DURING THIS YEAR THE DEPARTMENT HAS ACCEPTED ONLY A SUM OF RS. 21,66,534/- AS AGAINST DISCLOSED AGRICULTURAL INCOME OF RS. 27,00,104/-. 2.6.1 IN VIEW OF THE ABOVE DISCUSSIONS, I DO NOT F IND ANY JUSTIFICATION FOR THE DISALLOWANCE OF AGRICULTURAL INCOME OF THE ASSESSEE SO MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). TAKING INTO CONSIDERATION THE SIMILAR FACTS, CIRCU MSTANCES OF THE CASE AS WELL AS THE DECISION OF ITAT JAIPUR BENCH IN THE CA SE OF PINK CITY RESORTS LTD VS ITO (SUPRA), WE DO NOT FIND ANY JUST IFICATION FOR THE DISALLOWANCE OF AGRICULTURAL INCOME OF THE ASSESSEE SO MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 867/JP/2019 M/S. GULMOHAR DEVELOPERS. VS ITO, WARD- 5(2), ,JAI PUR 6 3.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 /09/202 0. SD/- SD/- ,U-DS-LSUH LANHI XKSLKBZ (N.K. SAINI) (SANDEEP GOSAIN) MIK/;{K@ VICE PRESIDENT U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 /09/2020. *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - M/S. GULMOHAR DEVELOPERS, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-THE ITO, WARD- 5(2), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR . 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 867/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR