UMESH A MISHRA, MUMBAI V. ITO 8(2)(4), MUMBAI

ITA 870/MUM/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9801 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B S BISTDR
• Keywords: Depreciation; Salary income; Additional evidence; Fair market value
• Section: 14A; 68

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -FBENCH MUMBAI , , , BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND RAM LAL NEGI,JUDICIAL MEMBER ./I.T.A./870/MUM/2014, /ASSESSMENT YEAR: 2009-10 MR. UMESH A. MISHRA 512, BUILDING NO.2, DHEERAJ VALLEY COMPOUND, NEAR SAI BABA COMPLEX, GOREGAON (E),MUMBAI-400 063. PAN:AAGPM 0190 F VS. INCOME TAX OFFICER-8(2)(4) AAYAKAR BHAVAN, CHURCHGATE MUMBAI. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI B.S. BIST-DR ASSESSEE BY: NONE / DATE OF HEARING: 01.05.2017 / DATE OF PRONOUNCEMENT: 26.07.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS,DATED 06.11.2013,OF THE CIT( A)-17 MUMBAI THE ASSESSEE HAD FILED THE PRESENT APPEAL.ASSESSEE,AN INDIVIDUAL,IS A COMM ISSION AGENT WHO DERIVES INCOME FROM SALARY,HOUSE PROPERTY AND OTHER SOURCES.HE FILED HI S RETURN OF INCOME ON 13/11/2009, DECLARING TOTAL INCOME OF RS.8,62,822/-.THE ASSESSI NG OFFICER (AO)COMPLETED THE ASSESSMENT U/S.143(3)OF THE ACT,DETERMINING HIS INCOME AT RS.3 3,56,840/-. 2. IN THIS CASE THE ASSESSEE HAD SOUGHT ADJOURNMENTS ON MORE THAN SIX OCCASIONS EARLIER. TODAY,NONE APPEARED BEFORE US.THEREFORE, WE ARE DEC IDING THE APPEAL ON THE BASIS OF AVAILABLE MATERIAL. 2.1. FIRST GROUND OF APPEAL IS ABOUT CONFIRMING THE ADDI TION OF RS.2 LAKHS.DURING THE ASSESS - MENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAD DEBITED 8.31 LAKHS UNDER VARIOUS BUSINESS HEADS (BANK CHARGES RS.346/-;DEPRECIATION -RS.2 LAKHS;INTEREST-RS.1.54 LAKHS AND MOTOR CAR EXPENSES- RS.22,495/-).HE DIRECTED THE AS SESSEE TO FILE DETAILS IN THAT REGARD. BUT,SAME WERE NOT FURNISHED.THEREFORE, IN ABSENCE OF ANY EVIDENCE OF ACTUAL EXPENDITURE AND FAILURE OF THE ASSESSEE TO ESTABLISH THE NEXUS OF S UCH EXPENDITURE WITH HIS BUSINESS,HE REJECTED THE CLAIM MADE BY THE ASSESSEE. 2.2. AGGREIVED BY THE ORDER OF THE AO,HE PREFERRED AN AP PEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA)AND STATED THAT HE HAD RECEIVED COMMI SSION OF RS.3.78 LAKHS, THAT IT HAD INCURRED EXPENSES UNDER THE HEAD INTEREST ON CAR L OAN, DEPRECIATION ON CAR ETC., THE CAR WAS USED FOR BUSINESS PURPOSES,THAT OTHER EXPENSES WERE ALSO INCURRED FOR BUSINESS.AFTER CONSIDERING SUBMISSION OF THE ASSESSEE AND THE ASSE SSMENT ORDER THE FAA ANALYSED THE 870/M/14(09-10) UMESH A. MISHRA 2 PRINCIPLES OF ALLOWING DEDUCTION U/S.37 OF THE ACT. HE THAT THE ASSESSEE WAS NOT ABLE TO PROVIDE ANY INFORMATION OR EVIDENCE OF THE INCURRIN G OF THESE EXPENSES,THAT HE HAD NOT GIVEN ANY EVIDENCE EITHER BEFORE AO AND HE HAD ALSO NOT REQUESTED FOR ADMISSION OF ADDITIONAL EVIDENCES,THAT THE EXPENSES WERE NOT PROPERLY VOUCH ED.LOOKING TO THE PAST RECORD OF THE ASSESSEE, HE RESTRICTED THE DISALLOWANCES TO RS.2,0 0,000/- TO ME WILL MEET THE END OF JUSTICE. 2.3. NOTHING HAS BEEN BROUGHT ON RECORD TO PROVE THE BAS IC PRECONDITION I.E INCURRING OF EXPENDITURE FOR CARRYING OUT THE ALLEGED BUSINESS A CTIVITYS,SO,WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE FAA. 3. SECOND GROUND OF APPEAL IS ABOUT CONFIRMING THE AD DITION ON ACCOUNT OF AGRICULTURAL INCOME.DURING THE ASSESSMENT PROCEEDINGS THE AO FOU ND THAT THE ASSESSEE HAD CLAIMED EXEMPTION OF AGRICULTURAL INCOME OF RS.18.75 LAKHS. HE DIRECTED THE ASSESSEE TO FILE DETAILS IN THAT REGARD.AFTER CONSIDERING THE SUBMISSION OF TH E ASSESSEE ,HE HELD THAT DURING THE YEAR UNDER APPEAL LAND ADMEASURING 0.9 ACRES HAD RAISED RICE CROP, THAT THE REST OF THE ENTIRE LAND WAS NOT FERTILE, THAT THE ASSESSEE DID NOT FILE ANY EVIDENCE ABOUT HIS AGRICULTURAL LAND AT VILLAGE KUDAL.REFERRING TO THE EARLIER YEARS ASSESSMENT ORD ER, THE AO SAID THAT THERE WAS NO EVIDENCE OF AGRICULTURAL INCOME.HE FURTHER OBSERVED THAT THE ASSESSEE HAD PURCHASED AGRICULTURAL LAND FOR RS.31.30 LAKHS, THAT HE HAD SHOWN AGRICULTURAL INCOME OF MORE THAN RS.40 LAKHS WITHIN A PERIOD OF 2 YEARS WITHOUT FILING ANY DOCUMENTARY EV IDENCE, THAT HE HAD DEPOSITED CASH OF RS.18.75 LAKHS IN HIS BANK ACCOUNT. THE AO REJECTED THE CLAIM MADE BY THE ASSESSEE AND MADE ADDITION OF THE SAME AMOUNT, INVOKING THE PROV ISIONS OF SECTION 68 OF THE ACT. 3.1. DURING THE APPELLATE PROCEEDINGS THE ASSESSEE FILED CERTAIN ADDITIONAL EVIDENCE BEFORE THE FAA WHO CALLED FOR A REMAND REPORT FROM AO.AFTER CO NSIDERING THE AVAILABLE MATERIAL,HE HELD THAT THAT THE ASSESSEE HAD NOT BEEN ABLE TO PR OVE TO NATURE OF RECEIPTS DEPOSITED IN ITS BANK ACCOUNT,THAT HE OWNED AGRICULTURAL LANDS ADMEA SURING 19.78 ACRES AT NANDGAON, TALUKA KARJAT, DISTRICT RAIGHAD,THAT OUT OF THE TOTAL LAND ,0.9 ACRES ONLY HAD RAISED RICE CROP AND REST OF THE ENTIRE LAND WAS TERMED AS 'BARRAN',THAT OTHE R DETAILS OF SALE OF AGRICULTURAL PRODUCE AND THE EXPENDITURE INCURRED TO EARN THAT INCOME HAD N OT BEEN PRODUCED BY THE ASSESSEE DESPITE SEVERAL OPPORTUNITIES GIVEN BY THE AO, THAT THE HE HAD NOT GIVEN ANY DOCUMENT WHEREIN IT COULD BE CLAIMED THAT HE HAD INCURRED ANY EXPENDIT URE,THAT HE HAD PURCHASED THE AGRICULTURE LANDS AT KUDAL FOR MERE RS. 31,30,000/ - AND THE L AND WAS GIVING A HUGE REVENUE YIELD IN A SINGLE YEAR TO THE EXTENT OF 60% OF ITS CAPITAL VA LUE,THAT IN THE AY.2008-09,HE HAD CLAIMED AGRICULTURE INCOME TO THE EXTENT OF RS.21,28,556/ - ,THAT IN TWO YEARS HE RECOVERED MORE THAN THE ORIGINAL CAPITAL INVESTMENT,THAT HE HAD RETURN ED A SPECIFIC FIGURE OF AGRICULTURE INCOME OF 870/M/14(09-10) UMESH A. MISHRA 3 RS. 18,75,400/ -,BUT HE DID NOT FILE ANY DOCUMENTAR Y SUPPORT TO THE WORKING OF SUCH SPECIFIC FIGURE OF AGRICULTURE INCOME,THAT HE FILED HIS RETU RN OF INCOME WITHOUT MAINTAINING PROPER BOOKS, THAT HE HAD STATED THAT THE DAY TO DAY ACTIV ITIES AT THE FARM WAS MANAGED BY ASHUTOSH SHUKLA WHO AFTER DEDUCTING EXPENDITURE REMITTED THE AMOUNT TO THE BANK,THAT SUCH A STATEMENT WITHOUT ANY CORROBORATIVE FACTS ON RECORD COULD NO T BE ACCEPTED,THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THAT IT HAD RECEIVED THE AGRICUL TURE INCOME AND IT HAD PERFORMED THE AGRICULTURAL OPERATION,THAT THERE WAS NO INFIRMITY IN THE ORDER OF THE AO TREATING THE DEPOSITS MADE IN THE BANK ACCOUNT OF THE ASSESSEE AS INCOME FROM OTHER SOURCES U/S. 68 OF THE ACT. 3.2. MERE FACT THAT THAT ASSESSEE IS OWNER OF THE AGRIC ULTURE LAND DOES NOT PROVE THAT IT HAD EARNED THE AGRICULTURE INCOME.SINCE NO EVIDENCE HAD BEEN ADDUCED BY THE ASSESSEE ABOUT THE INCOME FROM AGRICULTURAL LAND,SO,IN HIS REMAND REPO RT,THE AO CLEARLY INDICATED THAT THE DOCUMENTS WHICH WERE REQUIRED WERE NOT PRODUCED.IN ABSENCE OF THE DOCUMENTARY EVIDENCES PROVING GENUINENESS OF THE CLAIM,WE DO NOT WANT TO DISTURB THE FINDING OF THE FAA. 4. THIRD GROUND OF APPEAL IS ABOUT CONFIRMING ADDITIO N OF RS.2.44 LAKHS UNDER THE HEAD INCOME FROM HOUSE PROPERTY.THE AO,DURING THE ASSESS MENT PROCEEDINGS NOTICED THAT IN THE BALANCE SHEET THE ASSESSEE HAD SHOWN THREE HOUSE P ROPERTY -BEING TWO FLATS AND ONE SHOP.HE HELD THAT EXCEPT THE FLAT AT RAHEJA,CLAIMED AS SOP, ALONGWITH THE INTEREST CLAIM OF RS.1.50 LAKHS THE ANNUAL INCOME IN RESPECT OF REMAINING THR EE PROPERTIES SHOULD HAVE BEEN OFFERED TO TAX.AS THE ASSESSEE DID NOT GIVE FAIR MARKET ANNUAL VALUES OF THOSE PROPERTIES,SO,THE AO TOOK THE CAPITAL INVESTMENT TO DETERMINE THE ALV. IN THE BALANCE SHEET THE ASSESSEE HAD SHOWN THE COST OF THE SAID TWO PROPERTIES AT RS.23.26 LAKHS A ND THE GROSS ANNUAL RATEABLE VALUE @15% OF THE INVESTMENT WAS RS.3.48 LAKHS.AFTER ALLOWING DED UCTION U/S.24(B) OF THE ACT @30% THE NET TAXABLE ANNUAL VALUE I.E. RS.2.44 LAKHS WAS ADD ED TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY RELYING ON THE DECI SION OF ALLAHABAD HIGH COURT IN THE CASE OF RADHADEVI DALMIA (125ITR134). 4.1. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE FAA.HE HELD THAT THE ASSESSEES OWNED A PROPERTY AT DHIRAJ VALLEY AND ROYAL SANDS,THAT THE FLAT IN QUESTION WAS VACANT AND THEREFORE,THE NET ANNUAL VA LUE OF THE PROPERTY WAS TO BE DETERMIN - ED AS PER THE PROVISIONS OF THE ACT,THAT THE AO IN VIEW OF NO INFORMATION SUBMITTED BY THE ASSESSEE COMPUTED THE FAIR MARKET VALUE OF THE PROP ERTY AT 7% OF THE INVESTMENT FOLLOWING THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RADHA DEVI DALMIYA,THAT THERE WAS A MISTAKE IN THE COMPUTATION ,THAT THE AO WHILE COMPUTING THE GROSS ANNUAL RATEABLE VALUE HE HAD TAKEN 15% OF THE INVESTMENT,THAT AFTE R TAKING A RATEABLE VALUE AT 7% FOLLOWING 870/M/14(09-10) UMESH A. MISHRA 4 THE DECISION OF ALLAHABAD HIGH COURT,HE SHOULD NOT HAVE MADE AT 15%. HE REFERRED TO THE FULL BENCH DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF MONI KUMAR SUBBA(240 CTR 97)AND DIRECTED THE AO TO COMPUTE THE ANNUAL LE TTING VALUE IN THE LIGHT OF THE ABOVE DECISION OF THE HON'BLE DELHI HIGH COURT. 4.2. WE FIND THAT THE FAA HAS ALREADY ALLOWED PARTIAL RE LIEF TO THE ASSESSEE.THERE IS NO NEED TO DISTURB HIS FINDINGS.WE DISMISS THIRD GROUND. 5. FOURTH GROUND OF APPEAL IS ABOUT DISALLOWING THE E XPENDITURE OF RS.1.70 LAKHS U/S.14A OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS THE AO F OUND THAT THE ASSESSEE HAD RECEIVED DIVIDEND INCOME ON SHARE INVESTMENT AND HAD CLAIME D EXEMPT OF SUCH INCOME U/S. 10(34) OF THE ACT.AS THE ASSESSEE HAD NOT SHOWN ANY EXPENDIT URE AGAINST INCOME, SO THE AO APPLYING PROVISIONS OF SECTION 14A R.W. RULE 8D OF THE INCOM E TAX RULES,1962(RULES)MADE A DISALLOWANCE OF RS.1.70 LAKHS.BEFORE THE FAA,THE AS SESSEE STATED THAT HE HAD RECEIVED DIVIDEND INCOME OF RS.1.03 LAKHS AND NOT OF RS.25 .99 LAKHS AS STATED BY AO. 5.1. AFTER CONSIDERING THE AVAILABLE MATERIAL THE FAA H ELD THAT AO HAD RIGHTLY INVOKED PROVISIONS OF SECTION 14A R.W. RULE 8D.FINALLY HE U PHELD THE ORDER OF THE AO. 5.2. NOTHING HAS BEEN BROUGHT ON RECORD TO PROVE THAT TH E ORDERS OF THE REVENUE AUTHORITIES WERE PERVERSE,SO,CONFIRMING THE ORDER OF THEIR ORDE RS,WE DECIDED GROUND NO.4 AGAINST THE AO. 6. LAST GROUND OF APPEAL IS ABOUT LEVY OF INTEREST U /S. 234 OF THE ACT.AS THE GROUND IS CONSEQUENTIAL IN NATURE,HENCE, IS NOT BEING ADJUDIC ATED. AS A RESULT,APPEAL FIL ED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY, 2017. , 2017 SD/- SD/- ( / RAM LAL NEGI ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 26.07.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR F BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.