Shri Sur yavanshi Rajendrasingh Sopanrao, Solapur V. Addl.CIT, Range-1, Solapur, Solapur

ITA 931/PUN/2007

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6745 (ITAT-PUNE)
• Duration Of Justice: 6 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 06-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 931/PN/2007 (ASSESSMENT YEAR : 2003-04) SHRI SURYAVANSHI RAJENDRASINH SOPANRAO (HUF), PROP. 21 ST CENTURY CONSTRUCTORS, A/P. ANAWALI, TAL.-PANDHARPUR, DISTT.-SOLAPUR PAN NO. AALHS4589M .. APPELLANT VS. ADDL. CIT, RANGE-1, SOLAPUR .. RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : SHRI S.P. WALIMBE DATE OF HEARING : 18-06-2014 DATE OF PRONOUNCEMENT : 23-06-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 28-03-2007 OF THE CIT(A)-III, PUNE RELATING TO ASSE SSMENT YEAR 2003-04. THIS APPEAL WAS EARLIER DECIDED BY THE TRIBUNAL VID E ORDER DATED 13-04- 2011. SINCE ONE OF THE GROUND WAS NOT DECIDED BY T HE TRIBUNAL, THEREFORE, THE TRIBUNAL VIDE MA NO. 09/PN/2014 ORDER DATED 15- 03-2014 RECALLED THE ORDER OF THE TRIBUNAL FOR THE LIMITED PURPOSE O F DECIDING GROUNDS OF APPEAL NO. 3. THEREFORE, THIS IS A RECALLED MATTER . 2. GROUNDS OF APPEAL NO. 3 BY THE ASSESSEE READS AS UNDER: 3. WITHOUT PREJUDICE TO GROUND NO. 2 ABOVE AND IF SAID RECEIPTS/OR PART THEREOF ARE CONFIRMED AS NON-AGRICULTURAL RECEI PTS. THE EXPENSES OF RS.2,80,000/- TAKEN AS FOR EARNING AGRICULTURAL INCOM E OF MAY ALSO BE ALLOCATED OVER AGRICULTURAL AND NON-AGRICULTURAL AN D DEDUCTION BE ALLOWED ACCORDINGLY. 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS.3,82,810/- AND HAS CREDIT ED AN AMOUNT OF RS.6,34,810/- ON ACCOUNT OF SALE OF CROPS IN ITS BO OKS OF ACCOUNT. ON SCRUTINY, HE FOUND THAT OUT OF THE AMOUNT OF RS.6,3 4,810/-, THE ASSESSEE HAS CREDITED AN AMOUNT OF RS.5,56,968/- ON ACCOUNT OF SALES THROUGH A) HARNAM DASS SUDARSHAN DASS AND B) NARAYANDAS & COMPANY, DELHI THE ASSESSEE SUBMITTED THE XEROX COPIES OF THE BILL S OF THE ABOVE TWO PARTIES. ON VERIFICATION WITH THESE PARTIES, BOTH THE PARTIES DENIED TO HAVE SOLD ANY GOODS ON BEHALF OF THE SAID ASSESSEE. THU S, THE AMOUNT OF RS.5,56,968/- CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE ON ACCOUNT OF SALES THROUGH HARNAM DASS SUDARSHAN DASS AND NAR AYANDAS & COMPANY, DELHI WAS FOUND TO BE UNEXPLAINED BY THE A SSESSING OFFICER WHO EVENTUALLY ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS INCOME FROM NON-AGRICULTURAL ACTIVITIES. 4. BEFORE THE CIT(A) THE ASSESSEE MADE ELABORATE SU BMISSIONS WHICH HAVE BEEN REPRODUCED BY THE LD.CIT(A) AT PARA 4.2 O F HIS ORDER WHICH READS AS UNDER: 4.2. DURING APPELLATE PROCEEDINGS, THROUGH WRITTEN SUBMISSION, THE APPELLANT HAS RAISED HIS CONTENTION AS FOLLOWS: IT WILL BE SEEN THAT, ADDL. CIT HAS ADDED GROSS AMOUNT OF RECEIPTS OF SALE OF DALIMB OF RS.5,56,968/- WHERE AS NET CREDIT OF AGRICULTURAL INCOME TAKEN BY THE ASSESSEE IS ONLY RS.3,82,810/-. MERELY BECAUSE DELHI PARTIES HAVE REFUSED TO PURCHASE D ALIMB FROM THE ASSESSEE, IT CANNOT BE CONCLUDED THAT ASSESSEE HAS NON- AGRICULTURAL INCOME. 3 IN FACT, IN THE ORDER, A.O. HAS ACCEPTED THAT ASSESSEE H AS DALIMB TREES ON HIS 7/12 EXTRACT OF HIS AGRICULTURAL LAND (PA RA 2 ON LAST BUT ONE PAGE). ADDL.CIT HAS NOT ALLOWED OR PRODUCED THE PARTIES FOR CROSS EXAMINATION BY ASSESSEE FOR THEIR DENIAL. ADDL.CIT HAS NOT PROVED NOR STATED THAT ASSESSEE HAS NO DALIMB CULTIVATION. 7/12 EXTR ACTS HAVE BEEN SUBMITTED AND NOT CONTRAVENED. THE COPIES OF SUBMISSIONS AND CIRCUMSTANCES SUBMITTED, ARE ENCLOSED. APPELLANT IS FROM SMALL VILLAGE, NOT HAVING EDUCATED / QUALIFIED STAFF. THERE MIGHT BE MISTAKE IN VERIFICATION OF BILL S RECEIVED AS TO DATE OF BILLS ETC. AS POINTED OUT BY ADDL. CIT. IF THE RECEIPTS AS SHOWN BY THE ASSESSEE WERE NOT ACCEPTAB LE TO ADDL.CIT, HE SHOULD HAVE ESTIMATED THE AGRICULTURAL I NCOME ON SOME BASIS, I.E. CONSIDERING AREA UNDER CULTIVATION, NO. OF TRE ES, YIELD, IN THAT AREA ETC. INSTEAD ADDING WHOLE OF THE GROSS RECEIPTS. WE ENCLOSE HEREWITH A CERTIFICATE FROM AGRICULTURAL OFFICER AS TO NUMBER OF FRUITS, PLANTS, ESTIMATED WEIGHT, ETC. AS PER THE SAME THE ESTIMATED SALES WILL BE AS UNDER: TOTAL HECTARES UNDER DALIMB CULTIVATION 1.40 TREES/PLANTS PER HECTRE 740 TOTAL TREES ON 1.40 HECTARE 1020 FRUITS PER PLANT (YIELD) 100-150 SAYS 100 TOTAL FRUITS 1,02,000 AVERAGE PRICE PER KARANDI OF SAY 10 FRUITS RS.80/- TOTAL KARANDI SAY 10,000/- PRICE RS.8,00,000 AGAINST THIS ASSESSEES GROSS RECEIPTS ARE RS.5,56,968/- IN VIEW OF THE FACTS AND TOTALITY OF CIRCUMSTANCES TH E NET AGRICULTURAL INCOME OF APPELLANT OF RS.3,82,810/- MA Y PLEASE BE ACCEPTED DELETING THE ADDITION MADE BY ADDL. CIT OF RS.5,56,9 68/- AS INCOME FROM OTHER SOURCES. UNDER THE INSTRUCTIONS FROM APPELLANT, TO AVOID PROFA ILED LITIGATION AND DISPUTES. APPELLANT AGREES FOR ESTIMATE OF NET AGR ICULTURAL INCOME OF RS.3 LAKHS ACCEPTING ADDITION OF RS.80,000/- TO INCOME FROM OTHER SOURCES WITHOUT ACCEPTING ALLEGATION OF CONCEALMENT. 5. BASED ON ARGUMENT ADVANCED BY THE ASSESSEE THE C IT(A) RESTRICTED THE ADDITION TO RS.2,78,484/- AS AGAINST RS.5,56,96 8/- DETERMINED BY THE ASSESSING OFFICER TREATING THE BALANCE AS AGRICULT URAL INCOME. THE RELEVANT OBSERVATION OF THE ORDER OF THE LD. CIT(A) READS AS UNDER: 4.3. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT IN THE LIGHT OF THE FACTS OF THE CASE. 4 THERE APPEALS SOME MERIT IN THE CONTENTION OF THE AP PELLANT. I FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE FACT OF HOLDING OF AGRICULTURAL LAND BY THE APPELLA NT. HE HAS ALSO NOT DISPUTED THE APPELLANTS CLAIM THAT CROPS LIKE DALIMB HAVE BEEN TAKEN BY THE APPELLANT DURING THE YEAR. UNDER THESE CIRCUMST ANCES, I FIND IT DIFFICULT TO APPRECIATE THE ACTION OF THE ASSESSING OFFICER IN T OTALLY REJECTING THE ASSESSEES CLAIM OF HAVING EARNED THE AGRICULTURAL INCOM E DURING THIS YEAR. THE ACTION OF THE ASSESSING OFFICER IS NOT HELD TO BE JU STIFIED IN MAKING ADDITION OF RS.5,56,968/-. ON THE OTHER HAND, I FIND THAT ALTHOUGH APPELLANT S CLAIM OF EARNING AGRICULTURAL INCOME DURING THE YEAR STANDS ESTABLISHED, THE APPELLANT HAS UTTERLY FAILED IN PROVING THE EXTENT OF AGRICULTURA L INCOME TO THE TUNE OF RS.5,56,968/- AS THE SALE BILLS FILED BY HIM AS EVIDENCE IN THIS REGARD HAVE BEEN FOUND TO BE BOGUS BY THE ASSESSING OFFICER AS A RESUL T OF ENQUIRIES MADE BY THE CONCERNED PARTIES. IN VIEW OF THE AFORESAID, ON THE FACTS OF THE CASE, I CONSIDER IT REASONABLE TO ACCEPT 50% OF THE AMOUNT OF RS.5,56,968 /- AS AGRICULTURAL INCOME OF THE APPELLANT AND TO TREAT THE BALANCE AM OUNT AS APPELLANTS INCOME FROM NON-AGRICULTURAL ACTIVITIES. ACCORDINGL Y, THE ADDITION OF RS.5,56,968/- IS REDUCED AND RESTRICTED TO RS.2,78,484/ - ONLY. 6. AS MENTIONED AT THE BAR BY BOTH THE SIDES THE RE VENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE CIT(A) CONSIDER ING 50% OF THE AMOUNT OF RS.5,56,968/- AS AGRICULTURAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS CREDITED AN AMOUNT OF RS.6,34,810/- ON ACCOUNT OF S ALE OF CROPS AND HAS SHOWN NET AGRICULTURAL INCOME OF RS.3,82,810/-. TH US, THE BALANCE AMOUNT OF RS.2,52,000/- I.E. (RS.6,34,810 RS.3,82 ,810/-) HAS BEEN CONSIDERED AS EXPENDITURE FOR EARNING SUCH AGRICULT URAL INCOME. HE SUBMITTED THAT ALTHOUGH THE LD. CIT(A) HAS CONSIDER ED AN AMOUNT OF RS.2,78,484/- AS AGRICULTURAL INCOME OUT OF RS.5,56 ,968/- AND RS.77,842/- (BEING THE BALANCE AMOUNT, I.E. RS.6,34,810 RS.5, 56,968/-), THEREFORE THE INCOME FROM OTHER SOURCES MAY BE RESTRICTED TO RS .26,484/-. ALTERNATIVELY, HE SUBMITTED THAT THE EXPENDITURE OF RS.2,52,000/- FOR EARNING THE AGRICULTURAL INCOME MAY BE REASONABLY A LLOCATED. THE LD. 5 DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUPPO RTED THE ORDER OF THE CIT(A). 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND AS A GAINST CREDIT OF RS.6,34,810/- ON ACCOUNT OF SALE OF CROPS IN ITS BO OKS OF ACCOUNT, THE ASSESSEE HAS SHOWN NET AGRICULTURAL INCOME OF RS.3, 82,810/- . WE FIND THE A.O. DISBELIEVED THE SALE OF CROPS TO TWO PARTIES A MOUNTING TO RS.5,56,968/- AND TREATED THE SAME AS INCOME FROM O THER SOURCES. IN OTHER WORDS OUT OF THE TOTAL AMOUNT OF RS.6,34,810/- CRED ITED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT THE A.O. DISALLOWED THE AMOUNT OF RS.5,56,968/- TREATING THE SAME AS INCOME FROM OTHER SOURCES, THU S ACCEPTING AN AMOUNT OF RS.77,842/- AS NET AGRICULTURAL INCOME. WE FIND IN APPEAL THE LD. CIT(A) ALLOWED FURTHER AMOUNT OF RS.2,64,484/- AS A GRICULTURAL INCOME WHICH HAS BEEN UPHELD BY THE TRIBUNAL. IN OTHER WO RDS OUT OF THE TOTAL AMOUNT CREDITED AT RS.6,34,810/- AN AMOUNT OF RS.3, 56,326/- HAS BEEN CONSIDERED AS AGRICULTURAL INCOME. NOW, IT IS THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE THAT NO CREDIT FOR THE EXPENDITURE INCURRED FOR EARNING THE AGRICULTURAL INCOME AT RS.2,52,000/- HAS BEEN GIVEN . WE FIND THE ASSESSEE AT NO POINT OF TIME HAS GIVEN THE BREAK-UP OF SUCH EXPENSES NOR CLAIMED THE SAME BEFORE THE LD. CIT(A) IN ITS GROUNDS OF AP PEAL. THEREFORE, WHEN IT WAS PROPOSED THAT THIS ISSUE SHOULD GO BACK TO T HE ASSESSING OFFICER FOR ADJUDICATION OF ALLOCATION OF EXPENSES FOR AGRICULT URAL INCOME BOTH THE SIDES AGREED. UNDER THESE CIRCUMSTANCES, WE RESTOR E THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE AFRE SH AND IN ACCORDANCE 6 WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THIS GROUND BY THE AS SESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 23-06-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUN TANT MEMBER PUNE DATED: 23 RD JUNE, 2014 RK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-III, PUNE 4. THE CIT-III, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE