Smt Merlyn Harold, Bhopal V. The ACIT, 1(1), Bhopal

ITSSA 221/IND/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8528 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 04-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SAKSHI VERMA
• Keywords: Residential status
• Section: 143(3); 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAEPH0196G I.T. (SS). A.NO. 221 /IND/201 2 . A.Y. : 2004 - 05 SMT.MERLYN HAROLD, ACIT, LIG - 410,SECTOR E/7, ARERA COLONY, BHOPAL VS 1(1), BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI ASHISH GOYAL AND MS.SAKSHI VERMA RESPONDENT BY : SHRI R. A. VERMA, SR. DR DATE OF HEARING : 09 . 10 .2012 DATE OF PRONOUNCEMENT : 31 . 10 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 29.3.2012 FOR THE ASSESSMENT YEAR 2001-02 TO 2007-08 IN THE MATTER OF ORDER PASSED BY THE ASSES SING -: 2: - 2 OFFICER U/S 153C READ WITH SECTION 153A OF THE INCO ME-TAX ACT, 1961. 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR THE ASSESSMENT FRAMED U/S 153C AS WELL AS MERIT OF THE ADDITION OF RS. 40,000/- MADE BY THE ASSESSING OFFICER IN RE SPECT OF AGRICULTURAL INCOME BY TREATING THE SAME AS INCOME FROM OTHER SOURCE AND RS. 2,05,219/- AS LONG TERM CAPITAL GAIN . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A N INDIVIDUAL DERIVING INCOME FROM OTHER SOURCES AND AGRICULTURAL ACTIVITIES. IN THIS CASE, A SEARCH & SEIZURE OPERATION U/S 132( 1) OF THE INCOME-TAX ACT, 1961, WAS CONDUCTED ON THE RESIDENT IAL PREMISES AT VAMALAYAM, HOSHANGABAD ROAD, BHOPAL OF SHRI C. E. FERNANDES AND FACTORY PREMISES OF GEI HAMON INDUSTRIES LIMITED, 26-A, INDUSTRIAL AREA, GOVINDPU RA, BHOPAL, ON 15.11.2006. THE ASSESSEE HAPPENS TO BE DAUGHTER OF SHRI C. E. FERNANDES. SUBSEQUENTLY, NOTICES U/S 153C WAS ISSUED TO THE ASSESSEE AND IN RESPONSE TO THAT THE ASSESSE E SUBMITTED THAT THE RETURN FILED U/S 139 MAY BE TREATED AS RET URN FILED IN RESPONSE TO NOTICE U/S 153C. THE DETAIL OF RETURNS OF INCOME -: 3: - 3 FILED ORIGINALLY AND SUBSEQUENTLY ASSESSED INCOME U /S 153C READ WITH SECTION 143(3) ARE AS UNDER :- A.Y. DATE ON WHICH ORIGINAL RETURN WAS FILED AMOUNT OF RETURNED INCOME DATE ON WHICH RETURN U/S 153C WAS FILED DATE OF ASSESSMENT ORDER AND ASSESSED INCOME 2001-02 11.10.2001 NIL, AGRICULTURAL INCOMERS. 40,000/- 21.07.2008 30.12.2008 RS. 40,000/- 2002-03 08.08.2002 NIL AGRICULTURAL INCOME RS. 40,000/ - 21.07.2008 30.12.2008 RS. 40,000/- 2003-04 01.03.2004 NIL AGRICULTURAL INCOME RS. 40,000/- 21.07.2008 30.12.2008 RS.2,45,290/- 2004-05 17.10.2004 NIL AGRICULTURAL INCOME RS. 40,000/- 21.07.2008 30.12.2008 RS. 2,45,290/- 2005-06 NIL AGRICULTURAL INCOME RS. 35,000/- 21.07.2008 30.12.2008 RS. 32,740/- 2006-07 RS. 238/- AGRICULTURAL INCOME RS. 37,500/- 21.07.2008 30.12.2008 RS. 32,740/- 2007-08 RS.380/- AGRICULTURAL INCOME RS. 33,720/ - 21.07.2008 30.12.2008 RS. 34,100/- 4. THE ADDITIONS WERE DISPUTED BEFORE THE CIT(A) ALONGWITH ASSESSMENT FRAMED U/S 153C ON THE PLEA TH AT NO INCRIMINATING MATERIAL WAS FOUND. BY THE IMPUGNED O RDER, THE CIT(A) CONFIRMED THE ASSESSMENT FRAMED U/S 153C REA D WITH SECTION 153A BY OBSERVING THAT PAPERS RELATING TO S MT.MERLYN HAROLD WERE ALSO FOUND DURING THE COURSE OF SEARCH, THEREFORE, ON THE BASIS OF ACTION U/S 132 OF INCOME-TAX ACT, 1 961, IN THE CASE OF SHRI C. E. FERNANDES, THE ASSESSING OFFICER HAS VALIDLY ISSUED THE NOTICE U/S 153C READ WITH SECTION 153A O F THE ACT. -: 4: - 4 THE LD. CIT(A) ALSO CONFIRMED THE PROTECTIVE ADDITI ON OF RS. 40,000/- ON ACCOUNT OF AGRICULTURAL INCOME SHOWN B Y THE ASSESSEE AND HELD THAT THIS INCOME IS TO BE ADDED SUBSTANTIVELY IN THE HANDS OF THE ASSESSEE. THE LD. CIT(A) ALSO CONFIRMED THE ADDITION OF LONG TERM CAPITAL GAINS M ADE BY THE ASSESSING OFFICER. THE ASSESSEE IS IN FURTHER APPEA L BEFORE US. 5. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATI VE THAT THE ASSESSEE HAS ALREADY FILED RETURN U/S 139 ON 17.10.2004, DECLARING HER INCOME. HE ALSO DREW OUR ATTENTION TO THE POWER OF ATTORNEY FOUND DURING THE COURSE OF SEARCH AT FATHERS PREMISES, WHICH WAS EXECUTED BY THE ASSESS EE IN FAVOUR OF HER FATHER SHRI C. P. FERNANDES, RESIDENT OF INDIA, WHO LOOKED AFTER HER FINANCIAL MATTERS AND AGRICULT URE OPERATION/INCOME. OUR ATTENTION WAS ALSO DRAWN TO PAGE 4 OF THE ASSESSMENT ORDER, WHEREIN THE ASSESSING OFFICER CONSIDERED ONE DOCUMENT LPS-2/PAGE 58-59 UNDER THE HEAD CAPITAL GAINS. IT IS AN AGREEMENT TO SALE A PLOT B Y M/S. TRIMURTI BUILDERS FOR RS. 2,56,200/-. THE PLOT IS N O. 95 GOOD SHEPHERD COLONY, BHOPAL. IT WAS PURCHASED BY THE BU ILDERS FROM ONE MOLY THOMAS THROUGH HER POWER OF ATTORNEY HOLDER -: 5: - 5 CE FERNANDES. THIS PAPER DOES NOT BELONG TO THE ASS ESSEE. P.B.6-6 IS AGREEMENT BETWEEN M/S. TRIMURTI BUILDERS TO ONE MS.ALKA TRIPATHI. THE PLOT NUMBER IS SAME AS IN PRE CEDING PARAGRAPH. THE CONSIDERATION IS ALSO SAME. HERE, TH E REFERENCE IS THAT THE PLOT WAS SOLD THROUGH P.O.A. HOLDER CE FERNANDES FOR THE ASSESSEE TO THE TRIMURTHI BUILDERS THIS AGR EEMENT IS NOT BETWEEN THE ASSESSEE AND ANY OTHER PERSON. IN T HE FIRST PARA OF THE AGREEMENT, PAGE P. B. 6, IT IS MENTIONE D THAT THE PURCHASER MRS. ALKA GAVE TO TRIMURTHI BUILDER A DD DATED 30.4.2004 FOR RS. 2,56,200/- AS A FULL CONSIDERATIO N FOR THE PLOT. THEREFORE, THIS ISSUE IS FOR CONSIDERATION IN THE SUBSEQUENT ASSESSMENT YEAR. 6. WITH REGARD TO THE ADDITION MADE IN RESPECT OF INCO ME ALREADY DECLARED AS AGRICULTURAL INCOME, IT WAS SUB MITTED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THE LAND WA S PURCHASED IN FINANCIAL YEAR 1992-93, 0.6 ACRES AT K AZAHA KUTTAM KERALA. EARNING AGRICULTURE INCOME SINCE THE N AND RETURNED INCOME PRIOR TO SEARCH. ASSESSMENT YEAR AGRICULTURAL INCOME PAPER BOOK 2000-01 35,000 10 2001-02 40,000 21 2002-03 40,000 23 -: 6: - 6 2003-04 40,000 25 2004-05 40,000 27 2005-06 35,000 29 2006-07 32,500 31 2007-08 33,720 33 GROWING COCONUT, COFFEE, COCO, RUBBER, CASHEW NUTS, BLACK PEPPER, THAT CLIMB ON COCONUT TREES AND REQUIRES NO EXTRA SPACE. 7. RELIANCE WAS PLACE ON THE DECISION OF THE HON'BLE SUPREME COURT BENCH IN THE CASE OF ANAND KUMAR JAIN , 20 ITJ 384, WHEREIN I.T.A.T. HAD ACCEPTED ASSESSEES S UBMISSION OF AGRICULTURAL INCOME OF RS. 20,000/- PER ACRE IN JABALPUR, SEHORE. THE LD. AUTHORIZED REPRESENTATIVE, THEREFOR E, SUBMITTED THAT IN KERALA, AGRICULTURAL INCOME OF RS . 40,000/- SHOWN BY THE ASSESSEE WAS QUITE REASONABLE AND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE SAME AS I NCOME FROM OTHER SOURCES. 8. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FROM THE RECORD, WE FOUND THAT THE ASSESSE E WAS HAVING AGRICULTURAL LAND AT KAZAHA KUTTAM, KERALA, SINCE 1982 AND SHE WAS REGULARLY EARNING AGRICULTURAL INCOME F OR THE LAST ABOUT 16 YEARS AND THE SAME WERE ALSO DECLARED IN T HE RETURN FILED WITH THE DEPARTMENT MUCH PRIOR TO THE YEAR OF SEARCH. ON -: 7: - 7 THE AGRICULTURAL LAND, CROP OF COCONUT, COFFEE, COC O, RUBBER, CASHEW NUT WERE PRODUCED. THE ASSESSING OFFICER TOT ALLY DENIED THE CLAIM ON THE PLEA THAT THE ASSESSEE COUL D NOT FURNISH DETAILS OF VARIOUS EXPENDITURE INCURRED ON ACCOUNT OF CULTIVATION AND INCOME EARNED THEREON. FROM THE REC ORD, WE FOUND THAT THE INCOME RETURNED DURING THE YEAR WAS VARYING FROM RS. 32,500/- TO RS. 40,000/-. SINCE THE ASSESS EE WAS NOT MAINTAINING PROPER RECORDS, THE INCOME EARNED BY TH E ASSESSEE CANNOT BE ACCEPTED AS IT IS. IN CASE OF AG RICULTURAL INCOME, THE TRIBUNAL IS ALLOWING AGRICULTURAL INCOM E BY ESTIMATING THE SAME KEEPING IN VIEW THE LAND HOLDIN GS AND THE CROPS BEING GROWN THEREON. KEEPING IN VIEW THE TOTA LITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND THE AREA OF LAND, WHICH WAS ONLY 0.6 ACRES AT KERALA, WE DIRECT THE ASSESSING O FFICER TO TAKE THE AGRICULTURAL INCOME AT RS. 20,000/- PER YEAR. W E DIRECT ACCORDINGLY. 9. THE ASSESSING OFFICER HAS ALSO MADE ADDITION IN RESPECT OF LONG TERM CAPITAL GAIN ALLEGED TO BE EAR NED BY THE ASSESSEE. WE FOUND THAT DURING THE COURSE OF SEARCH AN AGREEMENT TO SALE WAS FOUND INDICATING SALE OF PLOT WITH -: 8: - 8 BOUNDARY WALL AT RS. 2,56,000/-. THIS LAND WAS ACQU IRED BY THE ASSESSEE IN GOOD SAFER COLONY ON 25.4.1991 AT R S. 21,795/-. THE ASSESSEE CLAIMED TO HAVE FURTHER INCU RRED EXPENDITURE ON BOUNDARY WALL ETC. IN THE FINANCIAL YEAR 1992- 93 AMOUNTING TO RS. 1,11,600/-. HOWEVER, SINCE NO DOCUMENTARY EVIDENCE WITH REGARD TO THE QUANTUM OF EXPENDITURE INCURRED ON CONSTRUCTION OF BOUNDARY WA LL ETC., THE ASSESSING OFFICER ESTIMATED THE COST OF LAND AN D BOUNDARY WALL AT RS. 50,709/- AND COMPUTED CAPITAL GAIN ON S ALE OF PLOT AT RS. 2,05,291/- SINCE THE CONSTRUCTION OF BOUNDAR Y WALL ETC. WAS UNDERTAKEN PRIOR TO THE BLOCK PERIOD, THE ASSES SEE WAS NOT SUPPOSED TO KEEP RECORDS FOR THE EXPENDITURE SO INCURRED. KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE ASSESSING OFFICER TO TAKE COST OF BOU NDARY WALL ETC. AT RS. 50,000/- IN PLACE OF COST OF RS. 1,11,6 00/- SHOWN BY THE ASSESSEE. ACCORDINGLY, WE MODIFY THE ORDER O F BOTH THE LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE CAPITAL GAIN AFTER ALLOWING BENEFIT OF COST INDEXAT ION IN RESPECT OF PLOT ACQUIRED ON 25.4.1991 AT RS. 21,795/- AND B OUNDARY WALL CONSTRUCTION IN THE FINANCIAL YEAR 1992-93 AT RS. -: 9: - 9 50,000/-. THUS, AFTER COMPUTING INDEXED COST OF ACQ UISITION AND THE INDEXED COST IMPROVEMENT, WITH REFERENCE TO THE RESPECTIVE YEARS, THE ASSESSING OFFICER IS TO RECOM PUTE THE CAPITAL GAIN ARISEN THEREFROM. WE DIRECT ACCORDINGL Y. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST OCTOBER, 2012. CPU* 123110