A. Niranjan Reddy, Hyd, Hyderabad V. DCIT, Central Circle-8, Hyd (presently DCIT, Central Circle-3(1), HYd), Hyderabad

ITA 974/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6374 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 21-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Business income; Additional evidence
• Section: 153A; 132

Judgement Text

ITA NOS 969 TO 974 OF 2015 A NIRANJAN REDDY HYDERAB AD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI PARTHA SARATHI CHAUDHURI, JUDICIAL MEMBER ITA NOS.969 TO 974/HYD/2015 (A.YS.2006-07 TO 2011-12) SHRI A. NIRANJAN REDDY, HYDERABAD PAN: AFCPA 1410 K VS. DCIT CC - 8 HYDERABAD (PRESENTLY DCIT CC-3, HYDERABAD) (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHURAM FOR REVENUE : SHRI K.E. SUNIL BABU, DR DATE OF HEARING : 2 9 .06.2016 DATE OF PRONOUNCEMENT : 01.07 .2016 O R D E R PER BENCH: THESE BATCH OF APPEALS ARE PREFERRED BY THE ASSESS EE AGAINST THE COMMON ORDERS OF THE LEARNED CIT (A) XI HYDERAB AD, DATED 10.04.2015 FOR THE RELEVANT A.YS 2006-07 TO 2011-12 ON VARIOUS GROUNDS OF APPEAL ON DIFFERENT ISSUES. 2. BRIEF FACTS IN THIS CASE ARE THAT A SEARCH & SEI ZURE OPERATION U/S 132 OF THE IT ACT, 1961 WAS CONDUCTED IN THE CA SE OF THE ASSESSEE AND OTHERS ON 2.9.2010. SUBSEQUENTLY, NOTI CE U/S 153A OF THE IT ACT WAS ISSUED TO THE ASSESSEE TO FILE THE R ETURNS OF INCOME. IN RESPONSE, ASSESSEE FILED HIS RETURN OF INCOME FO R A.Y 2006-07 ON 6.2.2013 DECLARING AN INCOME OF RS.3,13,010 INCLUDI NG AGRICULTURAL INCOME OF RS.1,35,000. AO COMPLETED THE ASSESSMENT BY TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCE S. THE FACTS AND SITUATIONS FOR ALL THESE APPEALS ARE THE SAME, EXCEPT WITH THE DIFFERENCE IN THE RETURN OF INCOME FILED IN EACH YE AR AND ADDITIONS ITA NOS 969 TO 974 OF 2015 A NIRANJAN REDDY HYDERAB AD PAGE 2 OF 5 MADE. THAT ALL THESE APPEALS ARE DISPOSED OF BY THI S COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE FIRST ISSUE TO BE DECIDED BEFORE US IS WITH REGARD TO THE ACTUAL QUANTUM OF AGRICULTURAL LAND IN POSSESSION O F THE ASSESSEE AND OF THE AGRICULTURAL ACTIVITIES THAT ARE ACTUALL Y CARRIED OUT BY HIM. THIS IS THE GROUND OF APPEAL FOR A.YS 2006-07 TO 2009-10 AND 2011-12. AS REGARDS THIS ISSUE, BEFORE THE AO THE A SSESSEE WAS ASKED TO GIVE DETAILS OF THE CROPS GROWING AND SOLD AND NATURE OF FARMING METHOD, BILLS SUPPORTING SEEDS/FERTILIZERS ETC, SOURCE OF WATER, ELECTRICITY BILLS AND RECEIPT OF THE SAME OF AGRICULTURAL PRODUCE. AO ALSO ASKED THE ASSESSEE TO PRODUCE THE PATTATAR PASS BOOK CLEARLY SHOWING THE EXTENT OF LANDS THE ASSESS EE IS IN POSSESSION. AS THE ASSESSEE WAS NOT ABLE TO PRODUCE ANY OF THE ABOVE INFORMATION, THE AO TREATED THE ENTIRE INCOME FROM UNEXPLAINED SOURCES UNDER THE HEAD INCOME FROM OTHE R SOURCES AND ADDED TO THE RETURNED INCOME. TO THIS BEFORE TH E LEARNED CIT (A) DURING THE APPELATE PROCEEDINGS, THE ASSESSEE F URNISHED PATTADAR PASS BOOK AS ADDITIONAL EVIDENCE UNDER RUL E 46A OF THE IT RULES WHICH WAS ADMITTED AND SEND TO THE AO FOR VER IFICATION AND REPORT. AO SUBMITTED THAT THE ASSESSEE HAS SUBMITTE D PATTADAR PASS BOOK WHICH INDICATE THAT THE ASSESSEE IS THE O WNER OF THE TOTAL LAND OF 8.38 ACRES OF WHICH 8.36 ACRES ARE CULTIVAB LE. BEYOND THAT THE ASSESSEE HAS NOT SUBSTANTIATED THE CLAIM OF AGR ICULTURAL INCOME. THE LEARNED CIT (A) WHILE CONFIRMING THE AD DITION DONE BY THE AO IN THIS GROUND OBSERVED THAT THE ASSESSEE CO ULD NOT SUBSTANTIATE WITH RELEVANT DOCUMENTARY EVIDENCE, HI S CONTENTION THAT HE HAS RECEIVED AGRICULTURAL INCOME. HE WAS OF THE OPINION THAT POSSESSION OF AGRICULTURAL LAND IS ONE THING A ND DERIVING AGRICULTURAL INCOME FROM IS ANOTHER THING. IF THE C LAIM WAS CORRECT, IT SHOULD HAVE BEEN POSSIBLE FOR THE ASSESSEE TO FI LE DOCUMENTARY ITA NOS 969 TO 974 OF 2015 A NIRANJAN REDDY HYDERAB AD PAGE 3 OF 5 EVIDENCES RELATING TO EXPENDITURE ON CULTIVATION AN D SALE OF PROLDUCE. BUT THAT HAS NOT BEEN DONE. ACCORDINGLY THE CIT (A) UPHELD THE ADDITION DONE BY THE AO. 4. BEFORE US THE LEARNED AR PRODUCED A COPY OF THE PATTADAR PASS BOOK WHEREIN IT IS STATED THAT THE ASSESSEE IS THE OWNER OF 8.38 ACRES + 2.30 ACRES I.E. 10.68 ACRES. WE HAVE O BSERVED IN THAT SAID PASS BOOK WHICH WAS PRODUCED BEFORE US DURING THE COURSE OF HEARING THAT THERE IS A MENTION OF LAND TOTALLING T O 10.68 ACRES. WE ALSO FIND THAT AS PER THE REMAND REPORT SUBMITTED B Y THE AO, THE AO HAS THOUGH MENTIONED BY THE ASSESSEE THAT HE IS IN POSSESSION OF 8.38 ACRES ONLY 8.36 ACRES ARE CULTIVABLE, BEYON D WHICH THE ASSESSEE HAS NOT SUBSTANTIATED THE CLAIM FOR AGRICU LTURAL INCOME. THEREFORE, THIS ISSUE IS SEND BACK TO THE FILE OF T HE AO TO VERIFY THE EXACT QUANTUM OF AGRICULTURAL LAND OWNED BY THE ASS ESSEE WHICH IS USED FOR EARNING AGRICULTURAL INCOME THROUGH CULTIV ATION. AO IS ALSO DIRECTED TO VERIFY THE TOTAL LAND AREA AS PROVIDED IN THE PATTADAR PASS BOOK SUBMITED BEFORE US TOTALLING TO 10.68 ACR ES AND AT THE SAME TIME VERIFY THE EXTEND OF LAND AND AGRICULTURA L OPERATIONS CONDUCTED AND ACCORDINGLY ARRIVE AT A JUDICIOUS DEC ISION. 5. BEFORE US AT THE TIME OF HEARING THE LEARNED AR ALSO STATED THAT AS PER THE DECISION OF THE COORDINATE BENCH OF ITAT HYDERABAD BENCH A IN THE CASE OF A. PANDURANGA REDDY VS. DC IT CENTRAL CIRCLE 3(1) HYDERABAD (ITA NOS.797 TO 803/HYD/2015, DATED 20.01.2016) WHEREIN UNDER THE SAME FACTS AND CIRCUM STANCES, THE ITAT HAD HELD THAT THE INCOME @ RS.10,000 PER ACRE MAY BE JUSTIFIED AS A REASONABLE INCOME EARNED ON THE SAID LAND. THAT IN THE PRESENT CASE OF THE ASSESSEE, HE SUBMITTED BEFO RE US THAT THIS RATE OF THE INCOME PER ACRE AS DECIDED BY THE COORD INATE BENCH SHOULD BE APPLIED IN HIS CASE ALSO. WE ARRIVE AT OU R CONSIDERED VIEW ITA NOS 969 TO 974 OF 2015 A NIRANJAN REDDY HYDERAB AD PAGE 4 OF 5 IN THIS REGARD THAT THE SUBORNIDATE AUTHORITIES HAV E CATEGORICALLY STATED AFTER DETAILED ENQUIRY THAT THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE AGRICULTURAL ACTIVITIES THAT HE PE RFORMS ON THE SAID LAND AND THEREFORE, THIS ISSUE IS ALSO SENT BACK TO THE FILE OF THE AO TO VERIFY WHETHER THE ASSESSEE IS ALSO CONDUCTING S IMILAR ACTIVITIES AS IN THE CASE OF THE A. PANDURANGA REDDY VS. DCIT (SUPRA). IF THE AO FINDS THAT THE ASSESSEE IS CONDUCTING SIMILAR AC TIVITIES, THEN THE DECISION OF THE COORDINATE BENCH REFERRED ABOVE SHO ULD BE FOLLOWED. HENCE THE GROUND IS ALLOWED FOR STATISTICAL PURPOSE S. 6. THE NEXT GROUND OF APPEAL BEFORE IS WITH REGARD TO ADDITION OF RS.8000 AS MIDDLEMEN COMMISSION ON SALE OF BUFFALOE S. ASSESSEE WITH REGARD TO THE AMOUNT OF RS.8000 RECEIVED AS CO MMISSION HAS NOT GIVEN ANY BREAK UP OF HIS INCOME.THE ASSESSEE H AS TAKEN THE PLEA THAT THE SAID RECEIPTS WERE ALREADY COVERED WI THIN HIS BUSINESS INCOME, BUT WAS NEITHER ABLE TO SUBSTANTIATE BEFORE THE AO, NOR BEFORE THE FIRST APPELLATE AUTHORITY. THEREFORE, TH E ADDITION OF RS.8000 AS COMMISSION RECEIVED WAS SUSTAINED BY THE LEARNED CIT (A). IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF THE LEARNE D CIT (A), HENCE THIS GROUND OF APPEAL IS DISMISSED. 7. THE NEXT GROUND OF APPEAL BEFORE US RELATE TO TH E ASSESSEE OFFERING THE NET INCOME FROM PROPRIETY CONCERN BIKE ZONE AT RS.60,568. THIS GROUND PERTAINS TO THE A.Y 2009-10. DURING THE ASSESSMENT PROCEEDINGS AO FOUND THAT THE FORM NO.26 AS PROVIDED BY THE ASSESSEE, THE ASSESSEE IS IN RECEIPT OF CONT RACTUAL INCOME OF RS.1,21,000 FROM M/S CASTROL INDIA LTD TO WHICH THE ASSESSEE IS A FRANCHISE. IN THE RETURN OF INCOME FILED BY THE ASS ESSEE, HE HAS NOT MENTIONED IN THE EXPENDITURE INCURRED BY HIM TO ARR IVE AT RS.60,568. HENCE IN THE ABSENCE OF PROOF, THE INCOM E OF ITA NOS 969 TO 974 OF 2015 A NIRANJAN REDDY HYDERAB AD PAGE 5 OF 5 RS.1,21,000 WAS TREATED AS INCOME FROM BUSINESS AND ADDED TO THE RETURNED INCOME. DURING THE APPELLATE PROCEEDINGS A LSO THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE FOR CLAIM OF TH E EXPENDITURE SO AS TO ARRIVE AT A PROFIT OF RS.60,658. HAVING NOT D ONE SO, ASSESSEE FAILED TO DISCHARGE HIS INITIAL ONUS OF GIVING EVID ENCE IN SUPPORT OF HIS CLAIM. HENCE THE CIT (A) UPHELD THE ADDITION MA DE BY THE AO. WITH REGARD TO THIS ISSUE, WE ARRIVE AT OUR CONSIDE RED VIEW THAT IN THE INTEREST OF JUSTICE, IT WOULD BE DEEM AND APPRO PRIATE TO SEND THIS ISSUE TO FILE OF THE AO TO VERIFY THE BUSINESS ACTIVITIES, CORRESPONDING RECEIPTS AND EXPENDITURES SO AS TO AR RIVE AT THE PROFIT OF RS.60,568. THE NATURE OF AMOUNT OF RS.1,2 1,000 AS APPEARING IN FORM NO.26AS ALSO HAS TO BE VERIFIED B Y THE AO. ACCORDINGLY THIS ISSUE IS SET ASIDE TO THE FILE OF THE AO. THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEALS ARE PARTLY ALLOWED FOR ST ATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JULY 2016. S D/ - S D/ - (B. RAMAKOTAIAH) (PARTHA SARATHI CHAUDHURI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 1 ST JULYE, 2016. VNODAN/SPS COPY TO: 1. K.VASANTKUMAR, AV RAGHUGAM, P VINOD, ADVOCATGES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500001 2. DCIT CENTRAL CIRCLE 3 (1) HYDERABAD 3. CIT-XI HYDERABAD 4. PRINCIPAL CIT-(CENTRAL) HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER