A.G.Thomas, CHENNAI v. ACIT, CHENNAI

ITA 1600/CHNY/2013 | 2008-2009
Pronouncement Date: 25-04-2014 | Result: Allowed

Appeal Details

RSA Number 160021714 RSA 2013
Assessee PAN AABPT1830G
Bench Chennai
Appeal Number ITA 1600/CHNY/2013
Duration Of Justice 9 month(s)
Appellant A.G.Thomas, CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 25-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Date Of Final Hearing 07-04-2014
Next Hearing Date 07-04-2014
Assessment Year 2008-2009
Appeal Filed On 25-07-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B B ENCH CHENNAI . !' # $ % BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD JUDICIAL MEMBER ./I.T.A.NO. 1600/MDS/2013 ( / ASSESSMENT YEAR: 2008-09) MR. A.G.THOMAS 5/14 2 ND STREET SENDHIL NAGAR CHOOLAIMEDU CHENNAI-600 094. VS ASSISTANT COMMISSIONER OF INCOME TAX BUSINESS CIRCLE-V CHENNAI. PAN:AABPT1830G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. K.BALASUBRAMANIAN ADVOCATE /RESPONDENT BY : MR. GURU BHASHYAM JCIT / DATE OF HEARING : 7 TH APRIL 2014 ! /DATE OF PRONOUNCEMENT : 25 TH APRIL 2014 & / O R D E R PER CHALLA NAGENDRA PRASAD JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII C HENNAI DATED 12.02.2013 FOR THE ASSESSMENT YEAR 2008-09. 2. THE FIRST ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING DISALLOWANCE OF ` 3 23 279/- MADE UNDER SECTION ITA NO.1600/MDS/2013 2 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TDS ON TH E COMMISSION PAYMENTS. THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT DISALLOWED ` 3 23 279/- STATING THAT ON EXAMINATION OF THE BALANCE SHEET IT SHOWS THAT A SUM OF ` 36 401/- BEING TDS ON COMMISSION PAID WAS SHOWN UND ER CURRENT LIABILITIES AS PAYABLE AND THEREFORE THE S UM WAS NOT PAID BY THE ASSESSEE. THEREFORE COMMISSION IS ADDE D BACK TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT OBSERVATIO N OF THE LOWER AUTHORITIES IS NOT CORRECT AS THE ASSESSE E DEDUCTED TDS ON THE COMMISSION OF ` 3 23 279/- AND THE TDS WAS REMITTED ON 2.6.2008 AND THE ASSESSEE HAS FILED ALL THESE DETAILS BEFORE THE COMMISSIONER OF INCOME TAX (APPE ALS) INCLUDING COPY OF CHALLAN PAID BY THE ASSESSEE AND THEREFORE COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFI ED IN SUSTAINING DISALLOWANCE. BEFORE US HE FILED DETAIL S OF TDS ITA NO.1600/MDS/2013 3 DEDUCTED AND PAID AND QUARTERLY STATEMENT OF TDS FI LED BEFORE THE LOWER AUTHORITIES. 4. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSE E HAS NOT PRODUCED ANY DETAILS BEFORE THE ASSESSING O FFICER AND IT WAS FURNISHED BEFORE THE COMMISSIONER OF INC OME TAX (APPEALS) SO THE MATTER MAY BE SENT BACK TO THE AS SESSING OFFICER FOR EXAMINATION. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DETAILS OF TDS REMITTED AND THE COPY OF QUA RTERLY STATEMENT OF TDS FILED BY THE ASSESSEE. AS THESE DE TAILS WERE NOT FILED BEFORE THE ASSESSING OFFICER WE REMIT TH IS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER. WE DIRECT THE ASSESSING OFFICER TO EXAMINE THESE DETAILS AND GRANT APPROPRI ATE RELIEF IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. 6. GROUND OF APPEAL NOS.3 & 4 OF THE ASSESSEE ARE A GAINST ACTION OF THE ASSESSING OFFICER IN ASSESSING SALE P ROCEEDS OF ITA NO.1600/MDS/2013 4 RUBBER TREES UNDER THE HEAD LONG TERM CAPITAL GAIN AND RUBBER LATEX UNDER THE HEAD INCOME FROM OTHER SOUR CES. ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT T REATED THE SALE PROCEEDS OF RUBBER TREES AND RUBBER LATEX UNDER THE HEAD LONG TERM CAPITAL GAIN & OTHER SOURCES RE SPECTIVELY ON THE GROUND THAT ASSESSEE HAS NOT CULTURED RUBBER PLANTATIONS AND NO AGRICULTURAL ACTIVITY WAS CARRIE D ON BY THE ASSESSEE AND RUBBER PLANTATIONS ARE ONLY SPONTANEOU S GROWTH OF TREES AND INCOME FROM SALE OF RUBBER TRE ES AND RUBBER LATEX ARE NOT AGRICULTURAL INCOME AND THERE FORE IT WAS TREATED AS INCOME FROM LONG TERM CAPITAL GAINS. COM MISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ACTION OF THE ASSESSING OFFICER IN ASSESSING SALE PROCEEDS OF RUB BER PLANTATIONS UNDER THE HEAD LONG TERM CAPITAL GAIN S AND THE RUBBER LATEX AS INCOME FROM OTHER SOURCES. 7. COUNSEL FOR THE ASSESSEE SUBMITTED PAPER BOOK CONTAINING VARIOUS DOCUMENTS FROM PAGES 7 TO 79 AN D REFERRING TO THESE DOCUMENTS SUBMITS THAT ASSESSEE PURCHASED AGRICULTURAL LAND ALONG WITH STANDING RUB BER TREES ITA NO.1600/MDS/2013 5 AND THIS LAND WAS SHOWN AS FIXED ASSET IN THE SCHED ULE UNDER THE HEAD AGRICULTURAL LAND PURCHASED ON 15.1.2003 VIDE DOCUMENT NO.717/03 REGISTERED WITH SRO/ PATHANAPURA M KERALA. COUNSEL SUBMITS THAT ASSESSEE WAS SHOWING SALE OF RUBBER MILK IN ALL THESE YEARS AS AGRICULTURAL INCO ME AND WAS ALLOWED BY THE REVENUE. REFERRING TO PAGE 65 OF TH E PAPER BOOK WHICH IS A CERTIFICATE ISSUED BY TAHSILDAR PATHANAPURAM CERTIFYING THAT MR. A.G.THOMAS AND HI S WIFE MINI THOMAS HAD POSSESSED LAND OF 16 ACRES COMPRISE D IN VARIOUS SURVEY NUMBERS IN PATHANPURAM TALUK AND THE Y HAVE PAID PLANTATION TAX TO THE GOVERNMENT ACCOUNT. FUR THER REFERRING TO PAGE 67 OF THE PAPER BOOK CONTAINING C ERTIFICATE ISSUED BY TAHSILDAR PATHANAPURAM CERTIFYING THAT LANDS BELONGING TO MR. A.G.THOMAS ARE SITUATED 15 KMS AW AY FROM NEAREST MUNICIPAL HEADQUARTERS. COUNSEL FOR THE ASS ESSEE FURTHER REFERRING TO PAGES 71 AND 73 OF THE PAPER B OOK WHICH ARE LEDGER ACCOUNTS OF AGRICULTURAL INCOME SUBMITS THAT ASSESSEE HAS SHOWN INCOME FROM SALE OF RUBBER LATEX AND RUBBER TREES AS AGRICULTURAL INCOME AND ALL THESE E VIDENCES SHOW THAT ASSESSEE WAS CULTURING RUBBER TREES AND THE BASIC ITA NO.1600/MDS/2013 6 OPERATIONS WERE CARRIED ON BY THE ASSESSEE AND THE INCOME FROM SALE OF RUBBER TREES IS EXEMPT FROM TAX. COU NSEL PLACES RELIANCE ON THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF KANTHIMATHI PLANTATIONS LTD. VS. STATE OF TAMIL NADU (254 ITR 785) AND CIT VS. MALANKARA RUBBER AND PRODUCT ( 203 ITR [ST.] 2). 8. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE LOWER AUTHORITIES IN TREATING THE SALE PROCEEDS OF RUBBER TREES AND RUBBER LATEX AS NON-AGRICULTURAL I NCOME AND ASSESSING INCOME UNDER THE HEAD LONG TERM CAPITAL G AINS & OTHER SOURCES. 9. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES PAPER BOOKS FILED BEFORE US AND THE DECISIONS RELIE D ON. THE ASSESSING OFFICER TREATED SALE PROCEEDS OF RUBBER T REES UNDER THE HEAD LONG TERM CAPITAL GAINS AND INCOME FROM RUBBER LATEX UNDER THE HEAD OTHER SOURCES ON THE GROUND THAT ASSESSEE HAS NOT PROVED THAT HE HAS CARRIED ON AGRI CULTURAL OPERATIONS AND THEREFORE IT IS NOT AGRICULTURAL IN COME AND IN ITA NO.1600/MDS/2013 7 ANY CASE THE RECEIPT IS TO BE TAXED UNDER THE HEAD INCOME FROM LONG TERM CAPITAL GAINS. THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER RELYING ON THE DECISION OF HONBLE KARNATAKA HIGH C OURT SAID TO HAVE BEEN REPORTED IN 88 TAXMANN 335. BEFORE US COUNSEL FOR THE ASSESSEE SUBMITS VARIOUS DOCUMENTS IN PAPER BOOK CONTAINING PAGES 7 TO 79 ARE AS UNDER:- S. NO PARTICULARS PAGE NO. 1. DETAILS OF COMMISSION PAID AND TDS MADE THEREON 1 2. QUARTER L Y STATEMENT OF TDS FILED U/S 200(3) 3 3. WORKING SHEET FOR LTCG ON SALE OF AQL.LANDS 5 4. ENGL I S H TRANSLATION OF SALE DEED FOR RS . 36 15 000DT.16/2/2008 EXECUTED BY A . G . THOMAS FOR SALE OF HIS AGL . LANDS AT PATTAZHI VADAK K EKARA VILLAQE 7-19 5. ENGL I SH TRANSLATION OF SALE DEED FOR RS.12 75 000DT.16/2 /2008 EXECUTED BY MRS.MINI THOMAS W/O A.G.THOMAS FOR SALE OF HIS AGL . LA N DS AT PATTAZHI VADAKKEKARA VILLAGE 29 6. COST S H EET OF AGL . LANDS PURCHASED AND SOLD BY MR . A.G.THOMAS 31 7. PURCH A SE DEED DT.15-1-2003 IN FAVOUR OF MR. A.G.THOMAS FO R PURCH A SE OF ABOVE AQL.LANDS 33-41 8. COST S H EET OF AGL . LANDS PURCHASED AND SOLD BY MRS M I NI THOMAS 43 9. PURCHASE DEED DT.15-11-2002 IN FAVOUR OF MRS . MINI THOMAS FOR PURCHASE OF ABOVE AQL.LANDS. 45-55 10 CREDIT I NG OF ABOVE 2 SALE CONSIDERATIONS THROUGH CHEQUES I N RESPECT I VE BANK ACCOUNTS 61-63 11 PATHANAPURAM TAHSILDAR CERTIFICATE DT.9-5-2011 65 12 PATHANAPURAM TAHSILDAR CERTIFICATE DT.19-5-2011 67 13 LAND TAX PAID REEIPT DT.5.12.2003 69 14 LEDGE R COPY OF AGL . LAND AND AGR I CULTURAL INCOME RECEIVED ON SALE OF TREES AND RUBBER LATEX 71-73 15 SLOTTER AGREEMENT DT. 29.12.2007 75 16 DETA I L S OF AGL . INCOME ADM I TTED BY APPELLANT 77 17 SCHEDULE OF FIXED ASSETS 79 ITA NO.1600/MDS/2013 8 10. THESE DOCUMENTS HAVE NEVER BEEN CONSIDERED BY L OWER AUTHORITIES WHILE COMING TO THE CONCLUSION THAT SAL E PROCEEDS OF RUBBER TREES AND RUBBER LATEX HAVE TO BE ASSESSE D UNDER THE HEAD LONG TERM CAPITAL GAINS AND NOT EXEMPT A S AGRICULTURAL INCOME. SIMILARLY DECISIONS OF HONBLE SUPREME COURT IN THE CASES OF KANTHIMATHI PLANTATIONS LTD. (SUPRA) MALANKARA RUBBER & PRODUCTS (SUPRA) AND KALPETTA ES TATES LTD. VS. CIT (221 ITR 601) WERE ALSO NOT CONSIDERE D BY THE LOWER AUTHORITIES WHILE ARRIVING AT THE CONCLUSION S. IN THE CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT T HE ASSESSING OFFICER SHOULD RECONSIDER THE WHOLE ISSUE IN THE LIGHT OF THE EVIDENCES AND THE CASE LAWS REFERRED T O ABOVE. THEREFORE WE SET ASIDE THE ORDER IMPUGNED ON THIS ISSUE AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO D ECIDE THE ISSUE AFRESH. 11. THE ASSESSEE HAS RAISED ONE MORE GROUND IN ITS APPEAL STATING THAT COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN SUSTAINING ADDITION MADE BY THE ASSESSING OFFICER U NDER THE HEAD OTHER SOURCES IN RESPECT OF SALE PROCEEDS OF LAND SOLD ITA NO.1600/MDS/2013 9 BY THE ASSESSEE ON WHICH THE RUBBER TREES WERE GROW N. SINCE WE ARE OF THE VIEW THAT ASSESSING OFFICER SHOULD CO NSIDER THE WHOLE ISSUE AFRESH AND IN ACCORDANCE WITH LAW WE S ET ASIDE THE ASSESSMENT IN RESPECT OF INCOME ASSESSED UNDER THE HEAD LONG TERM CAPITAL GAINS AND OTHER SOURCES AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICE R FOR DE NOVO CONSIDERATION IN ACCORDANCE WITH LAW AND IN THE LI GHT OF THE DECISIONS OF THE HONBLE SUPREME COURT REFERRED TO ABOVE AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 25 TH DAY OF APRIL 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGEN DRA PRASAD ) ' . #!$ # ( %& '() * ) ACCOUNTANT MEMBER / *+ JUDICIAL MEMBER/ ( *+ %( /CHENNAI * /DATED 25 TH APRIL 2014 SOMU ITA NO.1600/MDS/2013 10 *- ./0/ /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 123 /CIT(A) 4. 1 /CIT 5. /4' 5 /DR 6. '67 /GF .