SANTOKBEN SARMANBHAI JADEJA V. INCOME TAX OFFICER

TAXAP/1770/2005

AI Insights

The case involves Santokben Sarmanbhai Jadeja, represented by her legal heir Bhojabhai S. Jadeja, who appealed against the judgment and order of the Income Tax Appellate Tribunal, Rajkot Bench. The Tribunal had upheld the additions made by the AO to the agricultural income declared by the assessee for three consecutive assessment years. The primary legal question was whether these additions were justifiable. The High Court, referencing a Supreme Court decision and its own previous rulings, concluded that the additions were not justifiable, leading to the allowance of the appeals in favor of the assessee.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 764539 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 23-12-2014
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. Excel Industries Ltd. [2013] 358 ITR 295 (SC), Tax Appeal No. 347 of 2002
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PRANAV DESAI
• Assessee Lawyers: R K PATEL
• Keywords: Agricultural income; Assessment Order; Income Tax; Income tax appellate tribunal; Legal heir
• Section: 148

Judgement Text

"O/TAXAP/1768/2005 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1768 of 2005 With TAX APPEAL NO. 1769 of 2005 TO TAX APPEAL NO. 1770 of 2005 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ SANTOKBEN SARMANBHAI JADEJA since deceased Thro’ her legal heir BHOJABHAI S. JADEJA....Appellant(s) Versus INCOME TAX OFFICER....Opponent(s) ================================================================ Appearance: MR RK PATEL, ADVOCATE for the Appellant(s) No. 1 MR PRANAV G DESAI, ADVOCATE for the Opponent(s) No. 1 Page 1 of 7 O/TAXAP/1768/2005 JUDGMENT ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 23/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of these Tax Appeals,the original appellant (now deceased through her legal heir) has challenged the judgment and order dated 22.7.2005 passed by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot in ITA No. 663/Ahd/2003 for AY 1994-95, in ITA No. 664/Ahd/2003 for AY 1995-96 and ITA No. 665/Ahd/2003 for AY 1996-97. 2. While admitting these appeals on 23.8.2006, this Court has framed the following substantial question of law in all these appeals as under: Tax Appeal No. 1768 of 2005 “Whether the Tribunal’s conclusion in upholding the addition towards yield to the extent of Rs. 2,12,000/- in the returned figure of agricultural income is on justifiable basis ? Tax Appeal No. 1769 of 2005 Page 2 of 7 O/TAXAP/1768/2005 JUDGMENT “Whether the Tribunal’s conclusion in upholding the addition towards yield to the extent of Rs. 3,41,000/- in the returned figure of agricultural income is on justifiable basis ? Tax Appeal No. 1770 of 2005 “Whether the Tribunal’s conclusion in upholding the addition towards yield to the extent of Rs. 3,36,000/- in the returned figure of agricultural income is on justifiable basis ? 3. The facts of the present case are that the assessee has filed return of income on 17.6.1997 declaring total income of Rs. 9607/- and net agricultural income of Rs. 6,96,573/-. As there was escapement of the income, notice u/s. 148 of the Act was issued and served upon the assessee. In response to the notice issued, assessee vide letter dated 31st July, 2000 stated that the return of income filed may be treated as return of income filed in response to notice issued under sec. 148 of the IT Act and has furnished necessary details. After considering the material on record, the assessment orders came to be passed. Against the assessment orders, the assessee has preferred an appeal before the CIT(A) which came to be allowed. Against the said Page 3 of 7 O/TAXAP/1768/2005 JUDGMENT consolidated order of CIT(A), the Revenue has preferred appeal before the Tribunal, which was partly allowed. Being aggrieved by the consolidated order of Tribunal, the assessee has preferred appeal before this Court. 4. We have heard the learned advocates appearing for the parties and considered the submissions. Learned advocate for the appellant contended that for the earlier AY, has pointed out before the AO as well as before CIT(A), the income was considered as agricultural income but only these years, the same was not considered. He has further pointed out that in view of the decision of the Supreme court in the case of Commissioner of Income Tax v. Excel Industries ltd., reported in [2013] 358 ITR 295 (SC), wherein, the Supreme Court has observed in para-31, which reads as under: “31. It appears from the record that in several assessment years, the Revenue accepted the order of the Tribunal in favour of the assessee and did not pursue the matter any further but in respect of some assessment years the matter was taken up in appeal before the Bombay High Court but without any success. That being so, the Revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest Page 4 of 7 O/TAXAP/1768/2005 JUDGMENT rather than spend the taxpayers’ money in pursing litigation for the sake of it.” 5. It is further submitted that even otherwise, the identical issue came up for consideration, before this Court in Tax Appeal No. 347 of 2002, in which, this Court has held in para 7 and 8 as under: 7. Heard the learned advocates appearing for the parties and considered the submissions. Learned advocate Mr. Karia for the respondent- assessee has pointed out the observations made by the Tribunal in para 4.2, which reads as under: “4.2 On the basis of the entry in the Depreciation Table, the learned counsel contended that E Boats are required to be treated as machinery spare parts and not item of inventory (stock-in-trade) as contended by the AO. The learned counsel further stated that in AY 1996-97 a similar show cause notice was issued by the AO to the assessee company as to why an addition on account of closing stock of the E- boats should not be made as made in earlier asstt. Year viz. AYs 1992-93 to 1995-96. The respondent Company submitted a detailed reply dated 17.12.1998 a copy whereof has been placed at page 145 to 149 wherein it was explained that no addition is required to be made on account of closing stock of E Boats and on the Page 5 of 7 O/TAXAP/1768/2005 JUDGMENT contrary the respondent company would get deduction which would entitle them to have income tax refund. The AO after considering the detailed reply so submitted by the assessee dropped the proposal of making the addition on account of closing stock of E Boats for AY 1996-97. The learned counsel contended that no such addition made in AY 197-98 also.” 8. In that view of the matter, considering the finding recorded by the Tribunal, we concur with the view taken by the Tribunal and in view of fact that the earlier decision of the same assessee was accepted by the Department, and therefore, only on that ground, the present appeals are deserve to be dismissed. In the peculiar facts and circumstances of the case, it may not be treated as precedent. The question in all these Tax Appeals is answered against the Department and in favour of the assessee. All these Tax Appeals are dismissed. 6. In that view of the matter, the question is answered in favour of the assessee and against the department. It is held that the Tribunal has committed an error in reaching to the conclusion upholding the addition made by the AO to the extent of Rs. 2,12,000/-, Rs. 3,41,000/- and Rs. 3,36,000/- respectively in all these appeals, as an agricultural income. All these Tax Appeals are allowed. (K.S.JHAVERI, J.) Page 6 of 7 O/TAXAP/1768/2005 JUDGMENT (K.J.THAKER, J) mandora Page 7 of 7 "