P.Srinivas Reddy, Hyderabad v. ACIT,

ITA 1426/HYD/2008 | 2003-2004
Pronouncement Date: 05-02-2010 | Result: Dismissed

Appeal Details

RSA Number 142622514 RSA 2008
Assessee PAN ECCPP6016M
Bench Hyderabad
Appeal Number ITA 1426/HYD/2008
Duration Of Justice 1 year(s) 4 month(s) 26 day(s)
Appellant P.Srinivas Reddy, Hyderabad
Respondent ACIT,
Appeal Type Income Tax Appeal
Pronouncement Date 05-02-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 05-02-2010
Date Of Final Hearing 28-01-2010
Next Hearing Date 28-01-2010
Assessment Year 2003-2004
Appeal Filed On 09-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMEBR ITA NO.1426/HYD/08 : ASST T. YEAR 2003-04 ITA NO.1427/HYD/08 : ASST T. YEAR 2004-05 ITA NO.1428/HYD/08 : ASST T. YEAR 2005-06 SHRI P.SRINIVASA REDDY HYDERABAD ( PAN AECCPP 6016 M ) V/S. ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 6 HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.VASANT KUMAR RESPONDENT BY : SMT. VASUNDHARA SINHA CIT-DR O R D E R PER G.C.GUPTA VICE PRESIDENT: THESE THREE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06 ARE DIRECTED AGAINST A COMMON ORDER OF THE CIT(A). SINCE IDENTICAL ISSUE IS INVOLVED IN ALL THESE APPEALS THESE ARE BEING DISPOSED OFF WITH THIS CONSOLIDATED ORDER. 2. IDENTICAL GROUNDS OF APPEAL OF THE ASSESSEE IN ALL TH E THREE APPEALS ARE AS UNDER- '1. THE LEARNED CIT APPEALS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF THE ASSESSING OFFICER WHO TREATED A GRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. 2. THE LEARNED CIT APPEALS FAILED TO APPRECIATE THAT T HE AGRICULTURAL INCOM E SHOWN IN THE RETURN OF INCOM E ONLY FOR RATE ITA NO.1426-28/HYD/08 SHRI P.SRINIVASA REDDY HYDERABAD 2 PURPOSES WAS NOT TAKEN INTO THE CASH FLOW STATEMENT FOR THE YEAR AND WAS NOT APPLIED FOR ANY PURPOSE AFFECTING THE CASH FLOW OR THE BALANCE SHEET OF THE APPELLANT DURING T HE RELEVANT YEAR. 3. THE LEARNED CIT APPEALS FAILED TO APPRECIATE THAT W ITHOUT APPLICATION OF THE AGRICULTURAL INCOM E FOR EXPLAINING THE SOURCES OF OUTGOINGS AGRICULTURAL INCOME CANNOT BE TREATED AS INCOME FROM OTHER SOURCES. 4. THE LEARNED CIT APPEALS OBSERVED THAT AGRICULTURAL INCOM E WAS AVAILABLE FOR USE. PER SE THIS OBSERVATION CAN NOT BE A BASIS OF ADDITION SINCE THE AGRICULTURAL INCOME CAN BE UT ILIZED FOR CONSUMPTION.' 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE O NLY ISSUE INVOLVED IN THESE APPEALS IS WITH REGARD TO THE A CTION OF THE ASSESSING OFFICER IN TREATING PART OF THE AGRICULTURAL I NCOME AS 'INCOME FROM OTHER SOURCES'. THE LEARNED COUNSEL FOR THE ASSESSE E RAISED A PRELIMINARY ISSUE THAT SINCE THE AGRICULTURAL INCOME TREA TED AS 'INCOME FROM OTHER SOURCES' BY THE DEPARTMENT WAS NOT TAKEN I NTO THE CASH FLOW STATEMENT FOR THE RELEVANT PERIOD AND AS SUCH WAS N OT UTILISED FOR ANY PURPOSE AFFECTING THE CASH FLOW OR THE BALANCE SHEE T OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS THE AGRICULTURAL INCOME COULD NOT BE TREATED AS INCOME FROM OTHER SOURCES. HE SUB MITTED THAT THE INCOME FROM AGRICULTURAL WAS SHOWN BY WAY OF ESTIMA TE ONLY AND THERE WAS A HUMAN ERROR IN ESTIMATING THE SAME WHICH S HOULD NOT BE MADE THE BASIS FOR ADDITION IN THE HANDS OF THE ASSESSEE. HE RELIED ON THE DECISION OF THE JODHPUR BENCH OF THE TRIBUNAL IN T HE CASE OF ACIT V/S. DEVI LAL SONI (2001) 70 TTJ(JODHPUR) 24 WHEREI N IT WAS HELD THAT IN THE ABSENCE OF AVAILABILITY OF ANY ASSET REPRESENTI NG THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE OR ANY ADDITION UNDER S.69C SUCH INCOME COULD NOT BE TREATED AS 'INCOME FROM OTHER SOURCE S' MORE SO WHEN THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AS WELL AS INCOME FROM THE VERY SAME LAND HAS BEEN ACCEPTED IN SUBSE QUENT ITA NO.1426-28/HYD/08 SHRI P.SRINIVASA REDDY HYDERABAD 3 YEARS. THE LEARNED COUNSEL FOR THE ASSESSEE ON MERITS SU BMITTED THAT THE ASSESSEE OWNED 25.21 ACRES AND THEREFORE THE E STIMATION OF AGRICULTURAL INCOME AT RS.2.5 LAKHS FOR THE WHOLE YEAR WAS MOST REASONABLE. 4. THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND OPPOSED THE SUBMISSIONS OF THE LEARNED COUN SEL FOR THE ASSESSEE. SHE SUBMITTED THAT IN THE IMMEDIATELY PRECEDIN G ASSESSMENT YEAR THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME FROM THE SAME LAND HOLDING AT RS.90 000 ONLY. SHE SUBMITTED THAT THERE IS NO INCREASE IN THE LAND HOLDING OF THE ASSESSEE AND THE ASSESSEE COULD NOT SHOW ANY VALID REASON FOR DECLARING MUCH HIGHER AGR ICULTURAL INCOME FOR THE ASSESSMENT YEARS UNDER CONSIDERATION SHE SUB MITTED THAT THE CIT(A) WAS GENEROUS ENOUGH IN ALLOWING RELIE FS TO THE ASSESSEE BY ESTIMATING THE AGRICULTURAL INCOME FOR THE ASSESSM ENT YEAR 2003-04 AT RS.1.2 LAKHS AND FOR THE ASSESSMENT YEAR S 2004-05 AND 2005-06 AT RS.1.50 LAKHS FROM THE VERY SAME LAND H OLDING OF THE ASSESSEE. IN THE CIRCUMSTANCES SHE SUBMITTED THAT THERE IS NO JUSTIFICATION FOR ANY FURTHER RELIEF TO THE ASSESSEE ON THIS ISSUE. SHE RELIED ON THE BOMBAY BENCH DECISION OF THE TRIBUNAL IN THE CASE OF IAC V/S. INDIAN ART EMPORIUM (1994) 209 ITR (AT)1 IN SU PPORT OF HER ARGUMENTS. SHE SUBMITTED THAT THE PRELIMINARY OBJECT ION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS UNSUSTAINABLE AS THE EXCESS AMOUNT SHOWN AS AGRICULTURAL INCOME MUST HAVE BEEN SPE NT BY THE ASSESSEE AS THERE IS NO CORRESPONDING INVESTMENT SHOWN BY TH E ASSESSEE IN THE BALANCE SHEET. SHE RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). ITA NO.1426-28/HYD/08 SHRI P.SRINIVASA REDDY HYDERABAD 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. AS FOR THE PRELIMINARY ISSUE RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE WE FIND THAT THE SAME IS NOT SUSTAINABLE IN LAW AS IN THE CASE OF INFLATION IN THE AGRICULTURAL INCOME DECLARED THE SAME WAS RIGHTLY TAXED UNDER THE HEAD 'INCOME FROM OTHER SOURCES' BY T HE DEPARTMENT. THE DECISION OF THE JODHPUR BENCH OF THE TRIBUNAL RELI ED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE IS DISTINGUISHABLE ON FACTS IN AS MUCH AS IN THE CASE BEFORE THE JODHPUR BENCH THE AGRICULTURA L INCOME SHOWN BY THE ASSESSEE AS WELL AS HIS BROTHER FROM THE VER Y SAME LAND HOLDING HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE SUB SEQUENT ASSESSMENT YEAR. IN THE CASE BEFORE US ASSESSEE HIMSELF HAS ACCEPTED THAT IT HAS EARNED AROUND RS.2.5 LAKHS IN THE A SSESSMENT YEAR 2003-04; RS.3.25 LAKHS IN THE ASSESSMENT YEAR 2004-0 5AND RS.1.92 LAKHS IN THE ASSESSMENT YEAR 2005-06 AS AGRICULTURA L INCOME. THE PLEA OF THE ASSESSEE THAT THE ESTIMATION OF AGRICUL TURAL INCOME MADE BY THE ASSESSEE WAS A HUMAN ERROR IS NOT SUSTAINABLE FOR THE REASON THAT THE ASSESSEE NEVER RAISED THIS ISSUE BEFORE T HE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. IN REPLY TO A SPECIFIC QUERY FROM THE BENCH THE LEARNED COUNSEL FOR THE ASSE SSEE CLEARLY SUBMITTED THAT ASSESSEE NEVER RAISED THIS PLEA OF HUMAN ERROR IN DECLARING AGRICULTURAL INCOME DURING THE ASSESSMENT PROCEED INGS. WE FIND FORCE IN THE ARGUMENT OF THE LEARNED CIT-DR T HAT AMOUNT OF INFLATED INCOME SHOWN UNDER THE HEAD 'AGRICULTURAL INCO ME' MUST HAVE BEEN SPENT BY THE ASSESSEE SINCE ASSESSEE HAS NOT SHOWN CORRESPONDING INVESTMENT IN ITS BALANCE SHEETS OF THE RE LEVANT ASSESSMENT YEARS. 6. AS FOR THE MERITS OF THE CASE WE FIND THAT FROM T HE VERY SAME LAND HOLDING ASSESSEE HAS DECLARED AGRICULTURAL INCOME OF ITA NO.1426-28/HYD/08 SHRI P.SRINIVASA REDDY HYDERABAD 5 RS.90 000 ONLY IN THE IMMEDIATELY PRECEDING ASSESSMENT Y EAR VIZ. 2002-03. IN REPLY TO A SPECIFIC QUERY FROM THE BENCH THE LEARNED COUNSEL FOR THE ASSESSEE COULD NOT GIVE ANY SPECIFIC REASON F OR THE SUDDEN INCREASE IN THE AGRICULTURAL INCOME DECLARED DURIN G THE RELEVANT YEARS. HE ALSO EXPRESSED HIS INABILITY TO PRODUCE ANY DOC UMENT FROM REVENUE RECORDS TO SHOW THE FERTILITY OF THE LAND NU MBER OF CROPS GROWN TYPE OF CROPS AND AVAILABILITY OF IRRIGATION F ACILITY TO THE LAND ETC. DURING THE RELEVANT PERIODS. WE FIND THAT THE A SSESSEE HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO JUSTIFY THE INCREASE IN HIS AGRICULTURAL INCOME DURING THE RELEVANT PERIODS AS COMP ARED TO THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2002-03 BEF ORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) OR EVEN IN APPEA L BEFORE US. WE FIND THAT THE CIT(A) HAS ALREADY GIVEN SOME RELIEF TO THE ASSESSEE BY ENHANCING THE AGRICULTURAL INCOME FOR THE RELEVANT YEARS ON THE BASIS OF THE ESTIMATION ONLY. IN THESE FACTS OF THE CASE WE HOLD THAT THERE IS NO JUSTIFICATION FOR ANY FURTHER RELIEF TO T HE ASSESSEE IN THE MATTER OF ESTIMATION OF AGRICULTURAL INCOME FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. IN THIS VIEW OF THE MATTER WE HO LD THAT THERE IS NO MERIT IN THE GROUNDS OF APPEAL OF THE ASSESSEE AND A CCORDINGLY GROUNDS RAISED BY THE ASSESSEE IN ALL THE THREE APPEALS AR E REJECTED. 7. IN THE RESULT ALL THE THREE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 5.2.2010 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 05TH FEBRUARY 2010 ITA NO.1426-28/HYD/08 SHRI P.SRINIVASA REDDY HYDERABAD 6 COPY FORWARDED TO: 1. SHRI P.SRINIVASA REDDY ( HYDERABAD) C/O.M/S. B.NARSI NG RAO & CO. CHARTERED ACCOUNTANTS NO.610 6TH FLOOR BABUKH AN ESTATE BASHEERBAGH HYDERABAD 2. ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-6 HYDERABAD. 3. COMMISSIONER OF INCOME-TAX I HYDERABAD. 4. COMMISSIONER OF INCOME-TAX CENTRAL HYDERABAD . THE DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S.