Shri Imranbhai E.Lokhandwala, v. The Income tax Officer,Ward-4,, Anand

ITA 1076/AHD/2007 | 2003-2004
Pronouncement Date: 27-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 107620514 RSA 2007
Assessee PAN AAWPL2450P
Bench Ahmedabad
Appeal Number ITA 1076/AHD/2007
Duration Of Justice 4 year(s) 6 month(s) 15 day(s)
Appellant Shri Imranbhai E.Lokhandwala,
Respondent The Income tax Officer,Ward-4,, Anand
Appeal Type Income Tax Appeal
Pronouncement Date 27-09-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 05-07-2010
Date Of Final Hearing 26-09-2011
Next Hearing Date 26-09-2011
Assessment Year 2003-2004
Appeal Filed On 13-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. MOHAN ALAN KAMONY AM) ITA NO.1076/AHD/2007 A. Y.: 2003-04 IMRANBHAI E. LOKAHNDWALA C/O. MODHOS ASSOCIATES VORWAD AT UMRETH DIST. ANAND VS THE INCOME TAX OFFICER WARD-4 ANAND PA NO. AAWPL 2450 P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. G. PATEL AR RESPONDENT BY SHRI VINOD TANWANI SR. DR DATE OF HEARING: 26-09-2011 DATE OF PRONOUNCEMENT: 27-09-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-IV BARODA DATED 10 TH JANUARY 2007 FOR ASSESSMENT YEAR 2003-04 CHALLEN GING THE ADDITION OF RS.2 77 500/- MADE AS INCOME FROM OTHER SOURCES INSTEAD OF AGRICULTURAL INCOME. 2. EARLIER THIS APPEAL WAS DISMISSED FOR DEFAULT V IDE ORDER DATED 05-07-2010. THE ORDER WAS RECALLED WHILE ALLOWING T HE MISC. APPLICATION OF THE ASSESSEE VIDE ORDER DATED 28-01- 2011. THE APPEAL WAS THEREFORE AGAIN FIXED FOR HEARING ON MERIT. ITA NO.1076/AHD/2007 IMRANBHAI E. LOKHANDWALA VS ITO WARD-4 ANAND 2 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIL ED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4 40 502/- INCL UDING AGRICULTURAL INCOME OF RS.3 00 000/-. ON VERIFICATION OF THE DET AILS THE AO FOUND THAT THE ASSESSEE SHOWN INCOME FROM AGRICULTURE OF RS.8 25 000/- AGAINST WHICH HE HAS CLAIMED EXPENSES OF RS.2 65 00 0/-. GOING INTO FURTHER DETAILS THE ASSESSEE STATED THAT HE HAD EAR NED RS.6 65 757/- AS INCOME EARNED FROM SALE OF MAIZE. HE HAD ALSO OT HER INCOME FROM SALE OF PADDY AND SUGAR CANE OF RS.1 59 243/-. THE AO QUESTIONED THE FACT THAT WHY WOULD THE ASSESSEE DECLARE INCOME OF RS.3 00 000/- WHEN AS PER DETAILS FILED BY HIM THE NET INCOME EA RNED WORKED OUT TO RS.5 60 000/-. THE ASSESSEE WAS ASKED TO PRODUCE TH E DETAILS OF EXPENSES INCURRED IN EARNING THE AGRICULTURAL INCOM E AND ALSO THE SALES BILLS. ON VERIFICATION OF THE SALES BILLS IT WAS SEEN THAT ALL THE BILLS ARE IN THE NAME OF M/S. LOKAHNDWALA AGRO YEOWLA. T HE ASSESSEE EXPLAINED THAT ALL THE SALES HAVE BEEN MADE THROUGH HIS BROTHER-IN- LAW WHO WAS DIRECT SUPPLIER TO THE KISHAN SAHKARI S OCIETY LTD. DHULE OF WHICH THE ASSESSEE IS NOT A MEMBER. THEREFORE T HE BILLS HAVE BEEN RAISED IN THE NAME OF CONCERN OF HIS BROTHER-I N-LAW AND NOT IN THE NAME OF THE ASSESSEE. THE AO DID NOT GIVE CREDE NCE TO THE REPLY OF THE ASSESSEE. THE AO ALSO FOUND THAT CONFIRMATIO N LETTER FILED BY THE BROTHER-IN-LAW OF THE ASSESSEE DID NOT REFLECT HIS P.A. NUMBER AND KEEPING IN VIEW THAT ENTIRE PAYMENTS HAD BEEN MADE TO THE ASSESSEE IN CASH THE AO CONCLUDED THAT THE AGRICULTURAL INC OME OF RS.5 77 500/- DOES NOT CONSTITUTE INCOME FROM AGRIC ULTURE INCOME BUT IN FACT IT WAS INCOME FROM OTHER SOURCES. THE AO H OWEVER ALLOWED THE EXPENSES CLAIMED TO HAVE BEEN MADE TO EARN THIS AGRICULTURAL INCOME. THE AO MADE ADDITION OF RS.5 77 500/-. IT W AS SUBMITTED ITA NO.1076/AHD/2007 IMRANBHAI E. LOKHANDWALA VS ITO WARD-4 ANAND 3 BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE WAS OWN ER OF 39 BIGHAS OF AGRICULTURAL LAND AND FILED COPIES OF 7/12 AND 8 /A IN SUPPORT OF THE CLAIM. HE HAS ALSO FILED COPIES OF EXPENSES INCURRE D FOR EARNING AGRICULTURAL INCOME AND POINTED OUT THAT SAME HAS B EEN ACCEPTED AND ALLOWED BY THE AO. IT WAS FURTHER SUBMITTED THA T NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO TO SHOW THAT THIS INCOME HAS BEEN EARNED FROM THE SOURCE OTHER THAN AGRICULTURE. THE ASSESSEE ALSO FILED AFFIDAVIT OF HIS BROTHER-IN-LAW CONFIRMING TH E SALE OF MAIZE VALUED AT RS.6 65 757/-. THE LEARNED CIT(A) FOUND THAT EAR NING OF AGRICULTURAL INCOME IS ACCEPTED BY THE AO SINCE HE HAS ALLOWED T HE EXPENSES CLAIMED TO HAVE BEEN INCURRED TO EARN THE AGRICULTU RAL INCOME. THE LEARNED CIT(A) ALSO NOTED THAT IT CAN BE PRESUMED T HAT THE ASSESSEE HAS AGRICULTURAL INCOME BECAUSE HE HOLDS THE LAND A ND EXPENSES HAVE BEEN ALLOWED BY THE AO AND FURTHER AGRICULTURA L INCOME AS DECLARED IN THE EARLIER YEAR ALSO HAS BEEN ACCEPTED BY THE DEPARTMENT. THE LEARNED CIT(A) HOWEVER HELD THAT INCOME DECLARED TO THE EXTENT OF RS.3 00 000/- AS AGRICULTURAL INCO ME WAS ACCEPTED AND REMAINING RS.2 77 500/- WAS TREATED AS INCOME F ROM OTHER SOURCES. APPEAL WAS PARTLY ALLOWED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ADDITION IS EXCESSIVE. ON THE OTHER HAND THE L EARNED DR RELIED UPON THE ORDER OF THE AO. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE ARE OF THE VIEW ADDITION IS STILL ON EXCESSIVE SIDE. IT IS NOT IN D ISPUTE THAT THE ASSESSEE ITA NO.1076/AHD/2007 IMRANBHAI E. LOKHANDWALA VS ITO WARD-4 ANAND 4 HOLDS THE LAND AND HAS DECLARED AGRICULTURAL INCOME IN EARLIER ALSO. THE EXPENSES INCURRED BY THE ASSESSEE IN EARNING OF AGRICULTURAL INCOME ARE ACCEPTED BY THE AO. THE ASSESSEE EXPLAIN ED THAT THE AGRICULTURAL PRODUCES WERE SOLD THROUGH HIS BROTHER -IN-LAW FOR WHICH CONFIRMATION WAS ALSO FILED AND LATER ON HIS AFFIDA VIT WAS ALSO FILED. THE EXPLANATION OF THE ASSESSEE IS NOT UNNATURAL BE CAUSE WHEN HIS BROTHER-IN-LAW WAS CONNECTED WITH KISHAN SAHKARI SO CIETY LTD. THE AGRICULTURAL PRODUCTS COULD HAVE BEEN SOLD THROUGH HIM. THERE IS NOTHING UNNATURAL IN THE EXPLANATION OF THE ASSESSE E. FOR THE SAME REASONS THE EXPLANATION OF THE ASSESSEE AND CONFIRM ATION SHOULD NOT HAVE BEEN DISBELIEVED BY THE AO. IT APPEARS THAT TH E AO ON ESTIMATE BASIS ALLOWED THE EXPENDITURE INCURRED FOR EARNING OF THE AGRICULTURAL INCOME; THEREFORE CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES NOTED ABOVE IT WOULD BE REASONABLE A ND PROPER TO GRANT SOME MORE BENEFIT TO THE ASSESSEE FOR EARNING OF THE AGRICULTURAL INCOME. SINCE THE ASSESSEE HAS RENTAL INCOME INTEREST AND REMUNERATION INCOME THEREFORE THE AO SHOULD H AVE BROUGHT SOME EVIDENCES ON RECORD TO SHOW THAT FROM WHICH OT HER SOURCES THE ASSESSEE HAS EARNED THE INCOME. THE RENTAL INCOME AND INTEREST INCOME ARE SPECIFIC AND ASCERTAINED INCOME EARNED B Y THE ASSESSEE THEREFORE THE AO SHOULD HAVE CONSIDERED THE EXPLAN ATION OF THE ASSESSEE IN PROPER PERSPECTIVE TO MAKE THE ADDITION AT HIS HAND. ON CONSIDERATION OF THE ABOVE DISCUSSIONS WE ARE OF TH E VIEW ENDS OF JUSTICE WOULD MEET IF THE ADDITION IS RESTRICTED TO RS.77 500/- AS AGAINST RS.2 77 500/-. THE AO IS DIRECTED TO GIVE F URTHER BENEFIT TO THE ASSESSEE IN A SUM OF RS.2 00 000/-. ADDITION IS RES TRICTED TO RS.77 500/-. ITA NO.1076/AHD/2007 IMRANBHAI E. LOKHANDWALA VS ITO WARD-4 ANAND 5 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD