Shri Babulal L Malu, Kolhapur v. DCIT Cent. Cir., Kolhapur

ITA 241/PUN/2009 | 2001-2002
Pronouncement Date: 23-09-2011 | Result: Allowed

Appeal Details

RSA Number 24124514 RSA 2009
Assessee PAN ABNPM0069M
Bench Pune
Appeal Number ITA 241/PUN/2009
Duration Of Justice 2 year(s) 7 month(s) 6 day(s)
Appellant Shri Babulal L Malu, Kolhapur
Respondent DCIT Cent. Cir., Kolhapur
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 23-09-2011
Assessment Year 2001-2002
Appeal Filed On 17-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C.SUDHIR JM AND SHRI D KARUNAKARA RAO AM 1) ITA NO. 241/PN/2009 - AY: 2001-02 2) ITA NO. 242/PN/2009 - AY: 2002-03 3) ITA NO. 243/PN/2009 - AY: 2006-07 SHRI BABULAL LAXMINARAYAN MALU CHANDAN 8 TH LANE AZAD ROAD SHIROL DIST. KOLHAPUR. PAN ABNPM0069M .. APPELLANT VS. DY . CIT CEN. CIRCLE KOLHAPUR . RESPONDENT 4) ITA NO. 318/PN/2009 - AY: 2006-07 DY . CIT CEN. CIRCLE KOLHAPUR APPELLANT VS. SHRI BABULAL LAXMINARAYAN MALU RESPONDENT CHANDAN 8 TH LANE AZAD ROAD SHIROL DIST. KOLHAPUR. PAN ABNPM0069M 5) ITA NO. 752/PN/2009 - AY: 2002-03 ACIT CEN. CIRCLE KOLHAPUR APPELLANT VS. SMT. AYODHYA BABULAL MALU CHANDAN 8 TH LANE AZAD ROAD SHIROL DIST. KOLHAPUR. PAN ABNPM6755F .. RESPONDE NT 6) ITA NO. 244/PN/2009 - AY: 2000-01 7) ITA NO. 245/PN/2009 - AY: 2001-02 8) ITA NO. 246/PN/2009 - AY: 2002-03 9) ITA NO. 247/PN/2009 - AY: 2003-04 10) ITA NO. 248/PN/2009 - AY: 2004-05 11) ITA NO. 249/PN/2009 - AY: 2005-06 12) ITA NO. 250/PN/2009 - AY: 2006-07 SH RI RAJENDRA BABULAL MALU .. APPELLANT ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 2 CHANDAN 8 TH LANE AZAD ROAD SHIROL DIST. KOLHAPUR. PAN ABNPM0068L VS. DY . CIT CEN. CIRCLE KOLHAPUR . RESPONDENT 13) ITA NO. 316/PN/2009 - AY: 2005-06 14) ITA NO. 317/PN/2009 - AY: 2006-07 DY . CIT CE N. CIRCLE KOLHAPUR .. APPELLANT VS. SHRI RAJENDRA BABULAL MALU CHANDAN 8 TH LANE AZAD ROAD SHIROL DIST. KOLHAPUR. PAN ABNPM0068L . RESPONDENT 15) ITA NO. 381/PN/2009 - AY: 2000-01 16) ITA NO. 382/PN/2009 - AY: 2001-02 17) ITA NO. 383/PN/2009 - AY: 2003-04 18) ITA NO. 384/PN/2009 - AY: 2005-06 SMT. ARCHANA RAJENDRA MALU CHANDAN 8 TH LANE AZAD ROAD SHIROL DIST. KOLHAPUR. PAN ABEPM4622K .. APPELLANT VS. DY . CIT CEN. CIRCLE KOLHAPUR . RESPONDENT 19) ITA NO. 385/PN/2009 - AY: 2006-07 SHRI. VENKATESHWARA PAN MASALA INDUSTRIES (P) LTD. 355 SANGLI KOLHAPUR BY PASS RD DHARANGUTTI DIST. KOLHAPUR. PAN AACCS5553P .. APPELLANT VS. DY . CIT CEN. CIRCLE KOLHAPUR . RESPONDENT 20) ITA NO. 386/PN/2009 - AY: 2002-03 21) ITA NO. 387/PN/2009 - AY: 2003-04 22) ITA NO. 388/PN/2009 - AY: 2004-05 23) ITA NO. 389/PN/2009 - AY: 2005-06 24) ITA NO. 390/PN/2009 - AY: 2006-07 SHRI. VENKATESHWARA AGRICULTURAL FARM 218 AZAD ROAD A/P. JAYSINGPUR DIST. KOLHAPUR. PAN AAEFV5838L .. APPELLANT VS. DY. CIT CEN. CIRCLE KOLHAPUR . RESPONDENT 25) ITA NO. 753/PN/2009 - AY: 2000-01 ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 3 26) ITA NO. 754/PN/2009 - AY: 2001-02 27) ITA NO. 755/PN/2009 - AY: 2002-03 28) ITA NO. 756/PN/2009 - AY: 2003-04 29) ITA NO. 757/PN/2009 - AY: 2004-05 30) ITA NO. 758/PN/2009 - AY: 2005-06 31) ITA NO. 759/PN/2009 - AY: 2006-07 ACIT CEN. CIRCLE KOLHAPUR .. APPELLANT VS. SHRI. VENKATESHWARA AGRICULTURAL FARM 218 AZAD ROAD A/P. JAYSINGPUR DIST. KOLHAPUR. PAN AAEFV5838L .. RESPONDENT ASSESSEE BY : SHRI. M.K. KULKARNI DEPARTMENT : SHRI HARESHWAR SHARMA DATE OF HEARING : 26.8 .2011 DATE OF PRONOUNCEMENT : ORDER PER BENCH ITA NOS. 241 TO 243/PN/2009 IN THE APPEALS FOR A.Y. 2001 AND 2002-03 THE REVE NUE HAS QUESTIONED FIRST APPELLATE ORDER FIRSTLY ON THE GROUND THAT THE LD C IT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE APPEAL OF THE ASSESSEE SAYING THERE I S NO PROVISION TO APPEAL AGAINST THE PROTECTIVE ASSESSMENT AND SUSTAINED ADDITION OF RS. 20 50 000/- IN A.Y. 2001- 02 AND RS. 30 00 000/- IN A.Y. 2002-03 ON ACCOUN T OF LOAN RECEIVED FROM SHRI K.H. MANIYAR ( GROUND NO.1 ) AND SECONDLY THE LD CIT(A) WAS NOT JUSTIFIED IN CHARGING INTEREST U/S. 234B AND 234C OF THE ACT ( GROUND NO. 2 ). GROUND NO. 1 2. THE RELEVANT FACTS ARE THAT DURING THE A.YS. 200 1-02 AND 2002-03 THE ASSESSEE CLAIMED TO HAVE TAKEN UNSECURED LOANS OF RS.2 50 000/- AND RS. 30 00 000/- RESPECTIVELY FROM HIS BROTHER-IN-LAW SH RI J.H. MANIYAR OF NAGPUR. THE ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 4 A.O DOUBTED CREDITWORTHINESS OF SHRI MANIYAR AND MADE THE ADDITION U/S. 68 OF THE ACT ON THIS ACCOUNT AT RS. 20 50 000/- IN A.Y. 2001 -02 AND RS. 30 00 000/- IN A.Y. 2002-03. THE LD CIT(A) DID NOT ADJUDICATED UPON TH E ISSUE ON THE BASIS THAT FIRST APPEAL IS NOT MAINTAINABLE AGAINST THE ADDITION MAD E ON PROTECTIVE BASIS SINCE A DECISION ON AN ADDITION OF SUBSTANTIVE BASIS WOULD ALSO BE TAKEN ON THE FINDINGS IN THE CASE OF SHRI MANIYAR. 3. BEFORE US THE LD. A.R. POINTED OUT THAT ASSESSM ENT IN THE CASE OF SHRI J.H. MANIYAR WAS RE-OPENED AND IT HAS NOW BEEN ULTIMAT ELY DECIDED BY THE NAGPUR BENCH OF THE TRIBUNAL. THE LD. A.R. SUBMITTED THAT THE INCOME OF SHRI MANIYAR HAS BEEN ASSESSED FOR ALL THE YEARS UNDER APPEAL AT RS. 23.71 CRORES AS AGAINST AMOUNT ADVANVCED TO MALU FAMILY OF RS. 13.72 CRORES. HE S UBMITTED THAT SHRI MANIYAR REMAINED FINANCIALLY CAPABLE OF ADVANCING OF LOAN I N QUESTION TO THE ASSESSEE GROUP. THERE WAS NO DISPUTE ABOUT THE IDENTITY OF SHRI MANIYAR. THE MONEY ADVANCED BY HIM WAS THROUGH NORMAL BANKING CHANNEL S AND HE HAS AFFIRMED THE CLAIMED ADVANCES MADE BY HIM. THE LD. A.R. ALSO CI TED DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF LATA CHANDI VS. CIT (2003 ) 260 ITR 385 HOLDING THAT APPEAL LIES AGAINST THE PROTECTIVE ASSESSMENT. 4. THE LD. D.R. ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. HE POINTED OUT THAT EXAMINATION OF THE DOCU MENTS RELATING TO THE BUSINESS CONDUCTED BY SHRI MANIYAR SHOWED NUMBER OF DISCREPA NCY ACCORDING TO THE A.O DUE TO WHICH HIS CREDIT WORTHINESS WAS DOUBTED BY HIM TO DENY THE CLAIMED LOAN BY THE ASSESSEE FROM HIM. 5. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT THE A.O HAD DENIED THE CLAIMED UNSECURED LOANS IN QUESTION TO THE ASSESSEE BY SHRI J.H. MANIYAR ON THE BASIS THAT IT WAS BEYOND HIS CAPACITY TO ADVANCE TH E LOAN IN QUESTION. THE A.O WAS OF THE VIEW THAT SHRI MANIYAR HAD SHOWN BOGUS INCOM E FROM EXPORT OF SOFTWARE. HE ALSO NOTED THAT IT WAS STRANGE THAT LOANS OF SUCH H EAVY AMOUNTS WERE ADVANCED ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 5 WITHOUT CHARGING INTEREST. THE CONTENTION OF THE A SSESSEE REMAINED THAT THE LENDER HAD CONFIRMED THE LOANS; LOANS WERE RECEIVED BY DEM AND DRAFTS AND CHEQUES AND THE CREDIT WORTHINESS OF THE LENDER WAS VERY HIGH. IT WAS ALSO SUBMITTED THAT SHRI MANIYAR BELONGED TO A WELL KNOWN FAMILY OF NAGPUR W HICH HAS AN INDUSTRIAL BACKGROUND. IN SUPPORT OF HIS CREDIT WORTHINESS C OPY OF HIS INCOME-TAX RETURN HIS BALANCE-SHEET ETC. WERE FILED BY SHRI MANIYAR. IT WAS SUBMITTED THAT SHRI MANIYAR IS ALSO MANAGING DIRECTOR OF HARGOVIND INDUSTRY WHICH HAD A PAID UP CAPITAL OF RS. 5 CRORES. HE HAD EXPORTED SOFTWARE AND RECEIVED PRO CEEDS THROUGH REGULAR BANKING CHANNELS. THE SOFTWARE DEVELOPED AND EXPORTED BY HI M WAS SURVEYED BY THE SOFTWARE TECHNOLOGY PARK OF INDIA (STPL) ESTABLISHE D BY THE GOVERNMENT OF INDIA. REITERATING THE SUBMISSIONS MADE BEFORE THE AUTHORI TIES BELOW THE LD. A.R. ALSO POINTED OUT THAT ORDER OF THE NAGPUR BENCH OF THE T RIBUNAL IN THE CASE OF SHRI J.H. MANIYAR HAS BEEN PASSED IN THE MEANWHILE ASSESSIN G HIS INCOME FOR ALL THE YEARS UNDER APPEAL AT MORE THAN RS. 23.71 CRORES. HE SUB MITTED THAT THE ORDER OF THE NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF SHRI MA NIYAR WAS NOT AVAILABLE BEFORE THE AUTHORITIES BELOW. SINCE LD. A.R. HAS NOT MAD E AVAILABLE THE ORDER OF THE NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF SHRI J. H. MANIYAR BEFORE THE TRIBUNAL WE SET ASIDE THE MATTER TO THE FILE OF THE LD CIT(A ) TO DECIDE THE ISSUE AFRESH IN THE CASE OF THE ASSESSEE IN VIEW OF THE DECISION OF NAG PUR BENCH OF THE TRIBUNAL IN THE CASE OF CREDITOR SHRI J.H. MANIYAR AFTER GIVING OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE TO ESTABLISH CREDITWORTHINESS OF THE CREDI TOR AND THAT THE FUNDS WERE AVAILABLE WITH HIM WHEN IT WAS ADVANCED TO THE ASSE SSEE AND TO THE AO TO REBUT THE SAME.. 6. IN VIEW OF THE ABOVE DEVELOPMENTS THE CONTENTIO N OF THE ASSESSEE THAT FIRST APPEAL LIES ALSO AGAINST PROTECTIVE ASSESSMENT HAS TURNED ACADEMIC ONLY. HENCE IT DOES NOT NEED ADJUDICATION. THE GROUND NO. 1 IS T HUS ALLOWED FOR STATISTICAL PURPOSES. GROUND NO. 2 ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 6 7. THE CHARGING OF INTEREST U/S. 234B AND 234C OF T HE I.T. ACT IS CONSEQUENTIAL IN NATURE HENCE DOES NOT NEED A SEPARATE ADJUDICAT ION. THIS GROUND IS ACCORDINGLY DISPOSED OFF. 8. IN RESULT APPEALS ARE ALLOWED FOR STATISTICAL P URPOSES. ITA NO. 318/PN/2009 9. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1 085091/- MADE ON ACCOUNT OF EXCESS JEWELLERY FOUND AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. 10. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW WE FIND THE RELEVANT FACTS THAT DURING THE YEAR AN ADDITION O F RS. 1085091/- WAS MADE ON ACCOUNT OF UNEXPLAINED JEWELLERY FOUND DURING THE C OURSE OF SEARCH. THE A.O. DID NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE THAT IN HIS STATEMENTS RECORDED U/S. 132(4) THE ASSESSEE HAD MENTIONED THAT JEWELLERY F OUND INCLUDES THAT OF SANJAY MALU FAMILY. THE A.O DISBELIEVED THE EXPLANATION O N THE BASIS THAT SANJAY MALU DOES NOT STAY IN THE SAME HOUSEHOLD. THE ASSESSEE ON THE OTHER HAND SUBMITTED COPY OF THE PANCHNAMA AND INVENTORY OF CASH AND JE WELLERY FOUND DURING THE COURSE OF SEARCH. IT WAS POINTED OUT THAT THE VALU ATION REPORT OF THE JEWELLERY MENTIONS THE NAMES OF THE APPELLANT RAJENDRA MALU SANJAY MALU AYODHYA MALU ARCHANA MALU ETC. . SANJAY MALU WAS ALSO COVERED IN THE SEARCH ON THE RESIDENTIAL PREMISES OF THE ASSESSEE. ACCEPTING THESE EXPLANAT ION OF THE ASSESSEE THE LD CIT(A) HAS DELETED THE ADDITION MADE ON ACCOUNT OF THE EXCESS JEWELLERY. 11. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW WE FIND THAT THE LD CIT(A) HAS DELETED THE ADDITION IN THE CONCLUDING P ARA NOS. 18 AND 19 OF THE FIRST APPELLATE ORDER. THE SAME ARE BEING REPRODUCED HER EUNDER : ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 7 18. I HAVE CONSIDERED THE SUBMISSIONS. ALONG WITH THE INVENTORY OF JEWELLERY THE INVENTORY OF CASH FOUND ALSO INCLUDE S CASH FOUND IN THE BED ROOM OF SAU. ANUSAYA S. MALU. IT IS CLEAR FROM THE CASH INVENTORY THAT SANJAY MALUS FAMILY WAS INCLUDED IN THE APPELLANTS FAMIL Y. THE INVENTORY OF JEWELLERY FURTHER MAKES IT CLEAR THAT THE JEWELLE RY FOUND IN INCLUDED JEWELLERY OF THE SANJAY MALU FAMILY. ACCORDING TO THE WEALTH TAX STATEMENT OF THE FAMILY MEMBERS SANJAY MALUS FAMILY INCLUDING ANU SAYA MALU SANJAY MALU AND SANJAY MALU (HUF) OWNS JEWELLERY AS UNDER; 1) GOLD JEWELLERY 1540.37 GMS. 2) SILVER 4 500 KG. 3) DIAMONDS 8 CARROT 19. THE GOLD IS VALUED AT A RATE OF ROUGHLY AT RS.6 000/- AND SILVER AT RS.10500/- PER KG. AT THIS RATE 1540 GMS OF GOLD JEWELLERY ITSELF AMOUNTS TO RS.9 24 000/-. THERE IS THEREFORE NO REASON FOR A NY ADDITION ON ACCOUNT OF THE EXCESS JEWELLERY. IN ABSENCE OF REBUTTAL OF ABOVE STATED MATERIAL FIN DINGS OF THE LD CIT(A) BY THE LD. D.R. WE ARE NOT INCLINED TO INTERFERE WITH THE FI RST APPELLATE ORDER IN THIS REGARD AS THE SAME IS REASONED ONE. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 12. IN RESULT APPEAL IS DISMISSED. ITA NO. 752/PN/2009 13. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDE R MAINLY ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 12 00 000/- MADE ON ACCOUNT OF CASH DONATION GIVING TO TIRUPATI DEVASTHAN. 14. THE RELEVANT FACTS ARE THAT DURING THE COURSE O F SEARCH A BUNDLE CONTAINING DONOR PASS BOOKS OF TIRUPATI DEVASTHAN WAS FOUND S HOWING THAT THE ASSESSEE HAD GIVEN DONATION IN HIS NAME AND IN THE NAME OF OTHER MEMBERS OF HIS FAMILY. IT WAS EXPLAINED THAT THE DONATIONS WERE GIVEN OUT OF AGR ICULTURAL INCOME. THE A.O DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE B ASIS THAT THE DONATION WAS NOT REFLECTED IN THE CAPITAL ACCOUNT OF THE ASSESSEE IN THE BOOKS OF VENKATESHWARA ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 8 AGRICULTURAL FARM WHICH WAS THE SOURCE OF AGRICULT URAL INCOME. IT WAS FURTHER OBSERVED THAT VENKATESHWARA AGRICULTURAL FARM DID N OT EARN SUFFICIENT INCOME TO ENABLE THE CASH DONATION OF THE AMOUNT IN QUESTION. THE LD CIT(A) HAS DELETED THE ADDITION FOLLOWING THE FIRST APPELLATE ORDER IN THE CASE OF RAJENDRA MALU FOR THE A.YS. 2001-02 TO 2006-07. 15. THE CONTENTION OF THE LD. D.R. REMAINED THAT TH E CAPITAL ACCOUNT OF THE ASSESSEE WAS NOT DEBITED IN THE BOOKS OF M/S. VENK ATESHWARA AGRICULTURAL FARM. THE ASSESSEE HAD GIVEN DONATION TO TIRUPATI DEVASTH AN IN THE MONTH OF JULY 2011. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ENTIRE CASH RECEIPTS ON ACCOUNT OF AGRICULTURAL GOODS SHOULD NOT HAVE BEEN RECEIVED P RIOR TO JULY 2011. HE SUBMITTED FURTHER THAT THE LD CIT(A) HAS ALSO FAILED TO APPRE CIATE THAT THE ADDITION OF RS.12 00 000/- MADE IN THE CASE OF THE FIRM M/S. VE NKATESHWARA AGRICULTURAL FARM ON ACCOUNT OF CASH DONATION GIVEN TO TIRUPATI DEVAS THAN WAS ON PROTECTIVE BASIS AND THE ADDITION IN THE CASE WAS OF SUBSTANTIVE BAS IS. 16. THE LD. A.R. ON THE OTHER HAND TRIED TO JUSTI FY THE RELIEF GIVEN BY THE LD CIT(A). 17. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW WE FIND THAT THE LD CIT(A) HAS DELETED THE ADDITION IN QUESTION MAINLY ON THE BASIS THAT THE ENTIRE INCOME HAS TO BE TAKEN FOR THE PURPOSE OF CASH FLO W WHETHER INCOME IS ASSESSED AS AGRICULTURAL INCOME OR IT IS ASSESSED AS INCOME FROM OTHER SOURCES. THE LD CIT(A) HAS FOLLOWED THE FIRST APPELLATE ORDER ON AN IDENTICAL ISSUE IN THE CASE OF ANOTHER FAMILY MEMBER SHRI RAJENDRA MALU FOR THE A. YS. 2001-02 TO 2006-07. THE FACTS ARE IDENTICAL IN THAT CASE IT WAS NOTED THAT INSTEAD OF AGRICULTURAL INCOME DECLARED AT RS.1854641/- THE AGRICULTURAL INCOME H AS BEEN ASSESSED AT RS.3 42 843/- AND THE REMAINING AMOUNT HAS BEEN TRE ATED AS INCOME FROM OTHER SOURCES. THUS WITHOUT GOING INTO THE NATURE OF TH E INCOME ON THE MERIT OF THE ADDITION IN THE CASE OF VENKATESWARA AGRICULTURAL F ARM IT WAS HELD THAT AMOUNT OF ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 9 INCOME WAS AVAILABLE FOR APPLICATION FOR THE PURPOS E OF DONATION. IT WAS NOTED FROM THE CASH FLOW STATEMENT FOR THE A.Y. 2002-03 THAT T HERE WAS SUFFICIENT CASH IN THE BOOKS TO FUND THE DONATION. THE DONATION IS REFLEC TED IN THE BOOKS. UNDER THESE CIRCUMSTANCES THE LD CIT(A) HAS NOTED THAT DURING THE YEAR RS. 7 00 000/- WAS AVAILABLE WITH THE ASSESSEE WHICH COVERS THE AMOUNT OF RS. 12 00 000/- IN QUESTION SHOWN TO HAVE BEEN GIVEN IN DONATION TO TIRUPATI DE VASTHAN. THIS MATERIAL FACT HAS NOT BEEN REBUTTED BY THE REVENUE BEFORE US. WE THU S DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER ON THE ISS UE. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 18. IN RESULT APPEAL IS DISMISSED. ITA NOS. 244 245 246 247 248 249 & 250/PN/2009 19. IN THESE APPEALS THE ASSESSEE HAS QUESTIONED F IRST APPELLATE ORDER ON DIFFERENT GROUNDS.. 20. IN THE A.YS. 2000-01 2002-03 2004-05 2005-06 AND 2006-07 THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LD CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.4 05 019 /- ON ACCOUNT OF DIFFERENCE IN VALUATION OF MAHABLESHWAR PROPERTY ( A.Y. 2000-01) RS. 3 25 158/- ON ACCOUNT OF DIFFERENCE IN THE VALUATION OF PANHALA PROPERTY (A. Y. 2002-03) IN NOT ACCEPTING THE VALUATION OF THE PROPERTY KNOWN AS HOTEL SHAMBHAVE E IN A.YS. 2004-05 2005-06 AND 2006-07. 21. THE RELEVANT FACTS ARE THAT THE A.O MADE ADDITI ON U/S. 69B OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE/CONST RUCTION OF VARIOUS PROPERTIES. THESE ARE AS UNDER : ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 10 A.Y. FARM HOUSE LAND & BLDG. HOTEL FACTORY BLDG. MAHABALESHWAR PANHALA SAMBHAVI ---- --------------- --------------- ----------- ------------------ 99-00 629412 -- -- -- 00-01 -- -- -- 52655 02-03 -- 622430 -- -- 03-04 -- -- -- -- 04-05 -- -- 96868 - - 05-06 -- -- 1004576 -- 06-07 -- -- 1542938 THE A.O HAS MADE ADDITION OF AMOUNT IN DIFFERENCE B ETWEEN THE VALUE SHOWN BY ASSESSEE AND THAT ESTIMATED BY THE DVO. THE LD CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS GIVEN PART RELIEF. THUS THE PARTIES ARE IN APPEAL BEFORE THE TRIBUNAL. THE LD CIT(A) HAS DEALT WITH THE ISSUE IN DETAIL AND HAS GIVEN FOLLOWING FINDINGS : 18. I HAVE CONSIDERED THE SUBMISSIONS. IT HAS BEE N HELD THAT IN THE CASE OF HARIPREET HOTELS P. LTD. (ITA 1156/PN/00) BY THE PUNE BENCH OF THE ITAT THAT THE VALUATION MADE BY THE DEPARTMENTAL VALUATI ON OFFICER ARE BASED ON RATES PUBLISHED BY THE CPWD GOVT. OF INDIA WHICH ARE IN TURN BASED ON THE RATES OF MATERIAL AND LABOUR PREVAILING IN DELHI (D ELHI PLINTH AREA BASIS). THE RATES IN SMALLER TOWNS ARE BOUND TO BE LOWER. A DI FFERENCE UPTO 15% BETWEEN THE ESTIMATE OF HE DEPARTMENTAL VALUATION OFFICER AND THE VALUE DECLARED BY THE APPELLANT SHOULD BE ACCEPTED AS REA SONABLE DUE TO THIS FACTOR. IN THE CASE OF THE FACTORY BUILDING AT MID C SHIROLI THE TOTAL DIFFERENCE IF ONLY RS. 58 626/- WHICH IS LESS THAN 10%. THIS DIFFERENCE WOULD CERTAINLY BE ATTRIBUTED TO THE DIFFERENCE IN RATES ADOPTED BY THE DVO AND VARIOUS OTHER FACTORS. AFTER ALL THE ESTIMATE DON E BY THE DVO REMAINS ONLY ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 11 AN ESTIMATE AND CANNOT BE THE ABSOLUTE VALUE OF A P ARTICULAR PROPERTY. THE SMALL DIFFERENCE IN VALUATION CAN BE DUE TO GOOD BA RGAINING POWER OF THE ASSESSEE TIME DIFFERENCE IN THE VALUATION FLUCTUA TING MATERIAL PRICE ETC. THE ADDITION OF RS. 58 626/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FACTORY BUILDING AT D-21 MIDC SHIROLI IN A.Y. 2000-01 IS THEREFORE DELETED. 19. AS REGARDS THE VALUE OF HOTEL SAMBHAVEE THE TO TAL VALUE FIXED BY THE DEPARTMENTAL VALUATION OFFICER WAS RS. 82 35 000/- WHEREAS THE TOTAL EXPENSES OR COST OF CONSTRUCTION OVER THE PERIOD IN THE BOOKS OF THE APPELLANT WAS RS.82 93 564/- INCLUDING FURNITURE AND ELECTRIC AL INSTALLATIONS. THE COMPARISON IS AS UNDER C) HOTEL SAMBHAVEE C.S.NO. 1137 AT JAYSINGPUR. S.N. F.Y VALUATION AS PER INCOME TAX EXPENSES AS PER BOOKS TOTAL CONSTRUCTION ELECTRIC FURNITURE 1 03 - 04 354100.00 257232.00 -- -- 257232 2 04 - 05 3648048.00 2643472.00 -- -- 2643472 3 05 - 06 2676333.00 1938686.00 677728 501767 3118181.00 4 06 - 07 1556391.00 1167896.00 392380 714403 2274679.00 TOTAL 8234872.00 6007286.00 1070108 1216170 8293564 R.OFF 8235000.00 6007286.00 1070108 1216170 8293564 20. IT IS MENTIONED IN THE ASSESSMENT ORDER THAT VA LUATION OF THE DEPARTMENTAL VALUATION OFFICER DID NOT INCLUDE COST OF LAND COST OF MOVABLE FURNITURE COST OF ELECTRONIC GAZETTES ELECTRONIC INSTALLATION TRANSFORMERS ETC. THE NET DIFFERENCE HAS BEEN WORKED OUT TO RS.26 64 851/- OVER A PERIOD OF YEARS. IT IS SEEN FROM THE VALUATION REPORT THAT T HE SAVINGS FOR SELF SUPERVISION HAS BEEN WORKED OUT AT 7.5% OF RS. 86 6 8 286/-. IT HAS BEEN DECIDED IN THE CASE OF HARIPREET HOTELS PVT. LTD. AURANGABAD BY THE PUNE BENCH OF THE ITAT ITA NO. 1156 TO 1160/PN/00 AND A CCEPTED IN NUMBER OF OTHER CASES THAT THE DEDUCTION ON ACCOUNT OF SELF S UPERVISION SHOULD BE 10% INSTEAD OF 7.5%. THE DEDUCTION ON THIS ACCOUNT SHO ULD THEREFORE BE ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 12 RS.8 66 828/- INSTEAD OF RS.6 50 121/-. THE DIFFER ENCE IN VALUE WORKS OUT TORS.2 16 707/-.IN THE ABOVE DECISION OF THE PUNE TRIBUNAL IT HAS ALSO BEEN HELD THAT THE CBDT CIRCULAR FOLLOWED BY THE DEPART MENTAL VALUATION OFFICERS REFERS TO THE DELHI PLINTH AREA RATES AS THE BASE. THESE RATES HAVE TO BE SUITABLY ADJUSTED FOR SMALLER TOWNS. IN THIS CASE THE TRIBUNAL HELD THAT AN ADJUSTMENT OF @ 15% IN THE CASE OF AURANGABAD WAS FAIR AND REASONABLE. THIS DECISION OF THE PUNE TRIBUNAL HAS BEEN FOLLOWE D BY CIT(A) KOLHAPUR IN THE CASE OF RAMCHAND K. KUCKREJA A.Y. 2005-06 APP EAL NO. KOP/181/07-08 ON THE GROUND THAT THE KOLHAPUR IS EQUAL TO AURANGA BAD IN TERMS OF SIZE IF NOT SMALLER. BY APPLYING THIS RATE OF 15% TO THE G ROSS VALUE OBTAINED BY THE DEPARTMENTAL VALUATION OFFICER THE VALUE OF THE BU ILDING WOULD BE REDUCED BY RS.13 00 242/-. 21. IT MAY BE STATED THAT VALUATION MADE BY TWO TEC HNICAL PERSONS CAN DIFFER ON A HOST OF FACTORS AS STATED ABOVE INCLU DING FLUCTUATING OF RAW MATERIAL RATES TIME DIFFERENCE BARGAINING POWER O F THE BUYERS USE OF OLD MATERIAL ETC. A DIFFERENCE OF 10 15% BETWEEN TWO ESTIMATES CAN EASILY BE ATTRIBUTED TO SUCH FACTORS. THE HONBLE PUNE BENCH PERHAPS HAD THIS ASPECT ALSO IN A MIND WHILE HOLDING THAT LOCAL ADJUSTMENT OF 15% WOULD SERVE INTEREST OF JUSTICE AND MAKE THE VALUATION REALISTI C. THE APPELLANT GETS A RELIEF OF (RS.13 00 242/- + 2 16 707 = ) RS. 15 16 949 OU T OF TOTAL ADDITION MADE OF RS.22 64 851/- ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN HOTEL SAMBHAVEE. THE RELIEF WOULD BE DISTRIBUTED OVER THE PERIOD FRO M 04-05 TO 06-07 IN PROPORTION TO THE ADDITION MADE IN THE RESPECTIVE Y EARS. 22. AS REGARDS PANHALA AND MAHABALESHWAR PROPERTIES THESE ARE PROPERTIES WHICH HAVE BEEN PURCHASED NOT CONSTRUCT ED BY THE APPELLANT. THE MAHABALESHWAR PROPERTY HAD BEEN PURCHASED FROM SHRI AJIT MUTHA WHO HAD PURCHASED IT FROM VITTHAL SHINDE. THE ORIGINAL OW NER OF THE PROPERTY WAS BHAVANI DEVI TRUST. WHILE PURCHASING THE PROPERTY SH MUTHA HAD NOT TAKEN PERMISSION OF THE TRUST AND CHARITY COMMISSIONER. T HEREFORE THE PURCHASE PRICE FOR THE PROPERTY GIVEN TO MUTHA WAS LOWER THA N MARKET VALUE OF THE PROPERTY. THE APPELLANT SUBMITTED THAT EVEN TILL D ATE HIS NAME HAS NOT BEEN ENTERED AS OWNER IN 7/12 EXTRACT. IN OTHER WORDS INFIRMITY IN THE LEGAL TITLE WHICH WOULD RESULT IN A DISCOUNTED VALUE OF PROPERT Y HAS NOT BEEN CONSIDERED BY THE DEPARTMENTAL VALUATION OFFICER. THE CONTENT ION OF THE APPELLANT HAS FORCE. NEEDLESS TO SAY THAT IMPERFECTION OF TITLE WOULD RESULT IN SERIOUS DISCOUNT TO THE VALUE OF THE PROPERTY. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 13 23. THE APPELLANT HOWEVER HAS NOT POINTED OUT ANY S ERIOUS DEFECTS IN THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICE R. HOWEVER DUE TO THE ABOVE IMPERFECTION IN THE TITLE DEDUCTION OF 10% T HE VALUE OF LAND IS CONSIDERED SUFFICIENT. 24. AS REGARDS PANHALA LAND AND BUILDING THE DIFFE RENCE IN VALUATION WORKS OUT TO 17%. THE PROPERTY IS ALSO SUBJECT TO CERTAI N DISPUTES WITH GOVT. ACCORDING TO THE GOVT. CERTAIN TERMS AND CONDITION S HAD NOT BEEN FOLLOWED BY THE PROPERTY OWNERS AND THEREFORE NOTICES HAD B EEN ISSUED TO THE PLOT OWNERS FOR THE DEPOSITS OF CERTAIN SUMS OF MONEY. THE DISPUTE WAS PENDING WHEN THE PROPERTY WAS PURCHASED. SINCE THERE WERE LIABILITIES ON THE PROPERTY THERE WOULD BE SOME AMOUNT OF DISCOUNT ON THE MARKET VALUE. THE CONTENTION OF THE APPELLANT HAS FORCE. HOWEVER T HE APPELLANT HAS NOT GIVEN ANY DETAILS OF THE DISPUTE WHICH IS PENDING AND TH E SUM OF MONEY WHICH IS LIABLE TO BE PAID TO THE GOVT. THE CONTENTION THE REFORE CANNOT BE ACCEPTED. IT HAS BEEN HELD IN THE CASE OF VALUATION OF OTHER PROPERTIES ABOVE THAT A DEDUCTION OF 15% ON THE DELHI PLINTH AREA RATES ADO PTED BY THE DEPARTMENTAL VALUER IS TO BE MADE TO COMPENSATE FOR DIFFERENCE OF RATES BETWEEN METROS AND SMALLER TOWNS. IN KEEPING WITH THIS DECISION THE VALUE OF THE MAHABALESHWAR AND PANHALA PROPERTIES WOULD BE REDU CED AS UNDER: PANHALA VALUATION OF BUILDING 9 52 815/- 15% REDUCTION 2 42 922/- MAHABELESHAR VALUATION OF BUILDING 15 25 959/- 15% REDUCTION 2 28 893/ - 25. THE VALUATION OF THE PROPERTIES AT MAHABALESHWA R AND PANHALA REDUCED AS UNDER. PANHALA BUILDING 1 42 922/- PANHALA LAND (10%) 1 52 350/- MAHABALESHWAR BUILDING 2 28 893/- THE AO IS DIRECTED ACCORDINGLY. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 14 22. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADV ANCED BY THE PARTIES ON THE ISSUE RAISED IN THE GROUND. THE LD. A.R. HAS G IVEN MORE STRESS ON HIS PLEADING THAT DIFFERENCE BETWEEN THE VALUE SHOWN BY THE ASSE SSEE AND THAT ESTIMATED BY THE DVO OF THE PROPERTIES IN QUESTION WAS RANGING BETWE EN 10 TO 15 % HENCE LD CIT(A) SHOULD HAVE ACCEPTED THE VALUE OF THE PROPER TIES SHOWN BY THE ASSESSEE. HE SUBMITTED THAT THOUGH THE LD CIT(A) HAS APPRECIATED THE SUBMISSIONS OF THE ASSESSEE MADE IN THIS REGARD THAT THERE IS ALWAYS P OSSIBILITY OF SUCH DIFFERENCE BETWEEN THE ESTIMATION OF TWO EXPERTS BUT HE HAS NO T GIVEN FULL RELIEF. REGARDING THE PROPERTIES AT MAHABLESHWAR PANHALA BUNGLOW AND HOTEL SHAMBHAVEE THE LD. A.R. SUBMITTED THAT A.O. SHOULD HAVE REJECTED THE BOOKS OF ACCOUNT BEFORE REFERRING THE MATTER TO THE DVO HENCE REFERENCE IS INVALID IN VIEW OF THE DECISION IN THE CASE OF SARGAM CINEMA VS. CIT 328 ITR 513 (SC). THE LD . D.R. ON THE OTHER HAND TRIED TO JUSTIFY THE ASSESSMENT ORDER. 23. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT THE LD CIT(A) HAS ALREADY GIVEN THE REASONABLE REDUCTION FROM THE VALUE OF TH E PROPERTIES IN QUESTION ADOPTED BY THE A.O. CONSIDERING THE CONTENTIONS OF THE ASS ESSEE LIKE LOCAL PWD RATE VALUE OF FURNITURES AND FIXTURES ETC. IT IS VERY MUCH APPARENT FROM THE FIRST APPELLATE ORDER RELEVANT EXTRACT WHEREOF HAS BEEN REPRODUCED HEREINABOVE. AFTER TAKING INTO ACCOUNT THOSE CONTENTIONS THE LD CIT(A) HAS ALREAD Y REDUCED 15% OF THE VALUATION IN THE VALUATION OF CONSTRUCTION AND 10% REDUCTION IN THE VALUE OF LAND IN THE CASE OF PANHALA BUNGALOW AGAINST THE VALUATION ESTIMATE D BY THE DVO. SINCE THE LD CIT(A) IN OUR VIEW HAS GIVEN SUFFICIENT RELIEF TA KING INTO ACCOUNT THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE NOT INC LINED TO INTERFERE THEREWITH. SO FAR AS DECISION OF HONBLE SUPREME COURT IN THE CA SE OF SARGAM CINEMA VS. CIT 328 ITR 513 (SUPRA) CITED BY THE LD. A.R. IS CONCER NED HAVING GONE THROUGH THE ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 15 SAME WE FIND THAT IN THAT CASE THERE WAS SPECIFIC FINDING OF THE TRIBUNAL THAT THE BOOKS OF ACCOUNT WERE NEVER REJECTED. UNDER THESE C IRCUMSTANCES THE DECISION OF THE TRIBUNAL WAS APPROVED WHEREBY IT WAS HELD THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO THE DVO WHEN THE B OOKS OF ACCOUNT WERE NOT REJECTED. IT IS AN ESTABLISHED PROPOSITION OF LAW THAT THERE IS NO NEED FOR THE A.O TO WRITE IN SPECIFIC WORDING THAT BOOKS OF ACCOUNT AR E REJECTED IN CASE IT IS NOT RELIABLE TO DEDUCE THE CORRECT INCOME OF THE ASSESSEE AND EV EN IF THE A.O MENTIONS ABOUT THE NON-RELIABILITY OF THE BOOKS OF ACCOUNT IT IS SUFFICIENT TO DRAW AN INFERENCE THAT BOOKS OF ACCOUNT HAVE BEEN REJECTED. IN THE PRESEN T CASE BEFORE US BOOKS OF ACCOUNT OF THE ASSESSEE HAVE NOT BEEN FOUND RELIABL E BY THE A.O TO DEDUCE CORRECT INCOME OF THE ASSESSEE HENCE THE ONLY INFERENCE IS THAT BOOKS OF ACCOUNT HAVE BEEN REJECTED BY HIM. THE GROUND IS ACCORDINGLY RE JECTED. 24. IN A.YS. 2001-002 2002-03 2003-04 2004-05 2 005-06 AND 2006-07 THE ASSESSEE HAS QUESTIONED THE FIRST APPELLATE ORDER F IRSTLY ON THE GROUND THAT THE LD CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE APPEA L OF THE ASSESSEE ON THE BASIS THAT THERE IS NO PROVISION TO APPEAL AGAINST THE PR OTECTIVE ASSESSMENT AND SECONDLY THERE CANNOT BE ANY ADDITION ON PROTECTIVE BASIS U/ S. 153A(B) OF THE ACT AND THE LD CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 7 38 00 000/- IN A.Y. 2001-02 RS.1 88 40 000/- IN A.Y. 2002-03 RS. 1 40 30 000/- IN A.Y. 2003-04 RS. 5 50 00 000/- IN A.Y. 2004-05 RS. 25 00 000/- IN A .Y. 2005-06 AND RS.2 60 00 000/- IN A.Y. 2006-07 ON ACCOUNT OF LOAN RECEIVED FROM SH RI J.H. MANIYAR. 25. THE FACTS IN BRIEF ARE THAT THE ASSESSEE DURING THE A.YS. UNDER CONSIDERATION HAD BORROWED UNSECURED LOANS FROM HIS BROTHER-IN-LA W SHRI J.H. MANIYAR FROM NAGPUR WHICH HAVE BEEN TREATED BY THE A.O AS UNEXPL AINED CASH CREDIT ON THE BASIS THAT CREDIT WORTHINESS OF SHRI MANIYAR WAS DOUBTF UL. THE LD CIT(A) HAS NOT GIVEN ANY RELIEF TO THE ASSESSEE ON THE BASIS THAT THE IN COME IN THE HANDS OF THE ASSESSEE IN THIS REGARD HAS BEEN ASSESSED PROTECTIVELY AND A DECISION ON AN ADDITION ON ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 16 SUBSTANTIVE BASIS WOULD ALSO DEPEND ON THE FINDINGS IN THE CASE OF THE CREDITOR SHRI J.H. MANIYAR. WE HAVE ALREADY DECIDED AN IDENTICAL ISSUE UNDER S IMILAR FACTS HEREINABOVE IN GROUND NO. 1 IN ITA NOS. 241 TO 243/PN/2009. FOLLO WING THE DECISION TAKEN THEREIN WE SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT( A) TO DECIDE THE ISSUE AFRESH IN THE CASE OF THE ASSESSEE IN VIEW OF THE DECISION OF NAG PUR BENCH OF THE TRIBUNAL IN THE CASE OF THE CREDITOR SHRI J.H. MANIYAR AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE PARTIES. 26. IN THE A.Y. 2006-07 THE ASSESSEE HAS QUESTIONE D FIRST APPELLATE ORDER ON ONE GROUND THAT THE LD CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 27 000/- MADE BY A.O ON ACCOUNT OF EDUCATION EXPENS ES. 27. AFTER HAVING GONE THROUGH THE ORDERS OF THE AUT HORITIES BELOW WE FIND THAT DISALLOWANCE OF THE CLAIMED EDUCATION EXPENSES AT R S. 27 000/- HAS BEEN MADE BY THE AUTHORITIES BELOW ON THE BASIS THAT PERSONAL CA PITAL ACCOUNT FOR THE PERIOD DOES NOT SHOW ANY DEBIT ON ACCOUNT OF EDUCATIONAL EXPENS ES OR PERSONAL WITHDRAWALS WHICH COULD HAVE FUNDED THE EDUCATIONAL EXPENSES AL THOUGH THERE ARE DEBITS WITH REGARD TO LIC PREMIUM MUNICIPAL TAX PPF DEPOSITS TDS PAYMENTS AND SALARY ETC. IN ABSENCE OF ANY EVIDENCE IN SUPPORT OR CONVINCING EXPLANATION BEFORE US IN THIS REGARD WE DO NOT FIND REASON TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW ON THIS GROUND. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 28. THE LAST GROUND IS COMMON IN ALL THE A.YS. UNDE R CONSIDERATION WHEREBY THE ASSESSEE HAS QUESTIONED ITS LIABILITY TO PAY INTER EST U/S. 234B AND 234C OF THE ACT. 29. THE ISSUE RAISED IN THE GROUND IS CONSEQUENTIAL IN NATURE HENCE DOES NOT NEED ADJUDICATION. IT IS ACCORDINGLY DISPOSED OF. 30. IN RESULT ITA NO. 244/PN/2009 IS DISMISSED AN D REMAINING APPEALS ARE PARTLY ALLOWED. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 17 ITA NO. 316 & 317/PN/2009 31. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDE R FIRSTLY ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 8 28 611/- IN A.Y. 2005-06 AND RS. 6 08 438/- IN A.Y. 2006-07 MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY (GROUND NO. 1); AND SECONDLY ON THE GROUN D THAT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 15 934/- AND RS. 50 00/- IN A.Y. 2006-07 MADE ON ACCOUNT OF WRONG CLAIM OF DEDUCTION U/S. 57 UNDER T HE HEAD INCOME FROM OTHER SOURCES (GROUND NO. 2). GROUND NO.1 32. WE HAVE ALREADY DEALT WITH THE ISSUE HEREINABOV E IN THE CASE OF APPEALS PREFERRED BY THE ASSESSEE I.E. ITA NOS. 244 TO 250 /PN/2009 WHICH INCLUDES APPEALS FOR A.YS. UNDER CONSIDERATION AS WELL. FOLLOWING T HE DECISION TAKEN THEREIN WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGARD AS THE SAME IS COMPREHENSIVE AND REASONED ONE. THE RELIEF GIVEN B Y THE LD CIT(A) OF RS.8 28 611/- IN A.Y. 2005-06 AND OF RS. 6 08 438 I N A.Y. 2006-07 TOWARDS THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY ON THE BASIS OF POSSIBLE DIFFERENCE DUE TO LOCAL RATE AND OPINIONS OF TWO EXPERTS ETC. IS THUS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. GROUND NO.2 33. THE RELEVANT FACTS ARE THAT IN THE A.Y. 2005-06 AND 2006-07 ADDITION OF RS. 15 934/- AND RS.5000/- RESPECTIVELY WERE MADE TREAT ING THE SAME AS WRONG CLAIM U/S. 57 OF THE ACT. THE A.O. HAS MENTIONED IN THE ASSESSMENT ORDER THAT ABOVE STATED EXPENDITURE WAS CLAIMED AS DEDUCTION ON ACCO UNT OF CONSULTATION FEES PROFESSIONAL TAX AND SERVICE TAX U/S. 57 OF THE ACT . THE A.O DID NOT ALLOW THE SAME ON THE BASIS THAT THE EXPENSES WERE NOT LAID DOWN F OR THE PURPOSES OF EARNING ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 18 INCOME FROM OTHER SOURCES VIS. INTEREST COMMISSION ETC. THE ASSESSEE ADMITTED THAT THE CLAIM WAS MADE UNDER THE WRONG HEAD AND I T SHOULD HAVE BEEN CLAIMED UNDER THE HEAD OF INCOME FROM BUSINESS OR PROFESSIO N. THE LD CIT(A) HAS UPHELD THE ADDITION ON THE BASIS THAT THE A.O HAS NOT DISP UTED THE GENUINENESS OF THE EXPENDITURE OR THE FACT THAT IT IS RELATED TO BUSIN ESS OF THE ASSESSEE AND THAT THE EXPENDITURE SHOULD ALLOWED EITHER AGAINST INCOME FR OM OTHER SOURCES OR INCOME FROM BUSINESS. THE LD CIT(A) HAS NOTED THAT ASSESS EE HAS SUBSTANTIAL INCOME FROM ROYALTY COMMISSION INTEREST AGRICULTURE ETC. OT HER THAN THE BUSINESS INCOME. HE HAS FURTHER NOTED THAT THE EXPENSES ON INCOME TAX C ONSULTATION ETC. ARE OF GENERAL NATURE WHICH IS ATTRIBUTABLE TO ALL SOURCES OF INCO ME AND IF THE SAME EXPENDITURE IS ALLOWABLE U/S. 57 IT WILL BE ALLOWABLE UNDER INCOM E FROM BUSINESS OR ATLEAST PROPORTIONATELY TO DIFFERENT SOURCE OF INCOME. CER TAINLY IT IS NOT EXPENDITURE WHICH IS OF CAPITAL OR PERSONAL NATURE HENCE WE ARE OF T HE VIEW THAT THE LD CIT(A) HAS RIGHTLY DELETED THE ADDITIONS IN QUESTION. THE SAM E IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 34. IN RESULT APPEALS ARE DISMISSED. ITA NOS. 381 TO 384/PN/2009 35. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORD ER ON SEVERAL GROUNDS. 36. IN THE A.YS. 2000-01 2001-02 & 2005-06 ONE O F THE COMMON GROUNDS IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMIN G THE DISALLOWANCE OF THE CLAIM MADE U/S. 57 OF THE ACT (OF RS. 1 07 379 IN A.Y. 20 00-01 RS. 50 931/- IN A.Y. 2001- 02 AND RS. 2700/- IN A.Y. 2005-06). 37. AT THE OUTSET OF HEARING OF THE APPEAL THE LD. A.R. POINTED OUT THAT THE ASSESSEE DOES NOT WANT TO PRESS THIS GROUND AS SHE WISHES TO MOVE APPLICATION U/S. 154 OF THE ACT IN THIS REGARD BEFORE THE A.O. THE GROUND IS THEREFORE REJECTED AS NOT PRESSED. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 19 38. THE OTHER COMMON GROUND RAISED IN THE A.Y. 2000 -01 & 2001-02 IS THAT LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 80 740/- IN A.Y. 2000-01 AND RS. 12000/- IN A.Y. 2001-02 RECEIVED ON ACCOUNT OF AGRICULTURAL SUBSIDY. 39. IN SUPPORT OF THIS GROUND THE LD. A.R. FURNISH ED CERTIFICATES ISSUED BY DIVISIONAL AGRICULTURAL OFFICER JAISINGPUR DIST. KOLHAPUR ISSUED ON 20 TH JULY 2010. THE LD. D.R. ON THE OTHER HAND RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 40. DURING THE A.YS. UNDER CONSIDERATION I.E. A.Y. 2000-01 AND 2001-02 THE ASSESSEE CLAIMED AGRICULTURAL SUBSIDY AS CAPITAL RE CEIPT TO WHICH A.O DID NOT AGREE WITH AND TREATED THE SAME AS REVENUE RECEIPT. THE A.O NOTED THAT THE SUBSIDY HAS BEEN TREATED AS A REVENUE RECEIPT IN ONE OF THE GRO UP CASES . THE A.O ALSO NOTED THAT AGRICULTURAL SUBSIDY WAS GIVEN TO OFFSET THE E XPENDITURE INCURRED BY THE ASSESSEE IN THE AGRICULTURE PRODUCTION. SINCE THE ASSESSEE COULD NOT IMPROVE ITS CASE BEFORE THE LD CIT(A) HE HAS UPHELD THE DISALL OWANCE. IN THE ABOVE GIVEN CERTIFICATE BEFORE US ISSUED BY DIVISIONAL AGRICUL TURAL OFFICER JAISINGPUR IT HAS BEEN MENTIONED AS TO UNDER WHICH SCHEME AGRICULTURAL SU BSIDY WAS GIVEN TO THE ASSESSEE. THESE CERTIFICATES WERE NOT AVAILABLE BE FORE THE AUTHORITIES BELOW AS THESE HAVE BEEN ISSUED LATER ON. WE THUS ADMITTING THE CERTIFICATES ISSUED BY STATE GOVERNMENT OFFICIAL AS ADDITIONAL EVIDENCE SET ASI DE THE MATTER TO THE FILE OF LD CIT(A) TO DECIDE THE ISSUE AFRESH CONSIDERING THE S AID ADDITIONAL EVIDENCE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE GROUND IS THUS SET ASIDE FOR STATISTICAL PURPOSES. 41. IN A.YS. 2003-04 AND 2005-06 THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE COMMON GROUND THAT THE LD CIT(A) WAS N OT JUSTIFIED IN HOLDING THAT THE APPEAL OF THE ASSESSEE IS NOT MAINTAINABLE AGAINST PROTECTIVE ASSESSMENT IN WHICH ADDITIONS OF RS. 30 00 000/- IN AUGUST 2003-04 AND RS. 5 00 000/- IN A.Y. 2005-06 ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 20 HAVE BEEN MADE AS LOANS FROM SHRI J.H. MANIYAR AND SECONDLY IN HOLDING THAT THE ASSESSEE HAS CIRCULATED ITS OWN UNEXPLAINED FUNDS W HILE CONFIRMING THE ADDITIONS. 42. PARTIES HAVE ADOPTED THEIR RESPECTIVE ARGUMENTS ADVANCED BY THEM ON THE IDENTICAL ISSUE HEREINABOVE IN THE CASE OF SHRI BA BULAL LAXMINARAYAN MALU IT ITA NOS. 241 TO 243 AND 318 & 752/PN/2009. 43. FOLLOWING THE DECISION TAKEN ON IDENTICAL ISSUE IN ABOVE CITED APPEALS IN THE CASE OF SHRI BABULAL LAXMINARAYAN MALU UNDER SIMIL AR FACTS AND CIRCUMSTANCES WE SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ISSUE AFRESH IN VIEW OF DECISION OF THE NAGPUR BENCH OF THE TRIBUNAL IN TH E CASE OF THE CREDITOR SHRI J.H. MANIYAR AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO ESTABLISH THE CREDIT WORTHINESS OF THE CREDITOR SHRI J.H. MANIYAR AND TO THE A.O TO REBUT THE SAME.. THE GROUND IS THUS ALLOWED FOR STATISTICAL PURPOSES. SO FAR AS CONTENTION OF THE ASSESSEE THAT FIRST APPEAL LIES ALSO AGAINST PR OTECTIVE ASSESSMENT IS CONCERNED IT HAS BECOME ACADEMIC ONLY HENCE IT DOES NOT NEED SEP ARATE ADJUDICATION. 44. THE LAST COMMON GROUND IN ALL THESE APPEALS IS CHARGING OF INTEREST U/S. 234A 234B AND 234C OF THE ACT AGAINST THE ASSESSEE . THE SAME BEING IN CONSEQUENTIAL NATURE WE ARE OF THE VIEW THAT IT DO ES NOT NEED INDEPENDENT ADJUDICATION. 45. IN RESULT ITA NO. 381 382 AND 384/PN/2009 ARE PARTLY ALLOWED AND 383/PN/2009 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 385/PN/2009 46. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORD ER FIRSTLY ON THE GROUND THAT LD CIT(A) WAS NOT JUSTIFIED IN HOLDING THE APPEAL NOT MAINTAINABLE AGAINST ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 21 PROTECTIVE ASSESSMENT WHEREBY ADDITION OF RS. 13.50 LACS MADE ON ACCOUNT OF LOAN TAKEN FROM SHRI J.H. MANIYAR BY THE A.O HAS BEEN UP HELD. IN THE SECOND GROUND THE LEVY OF INTEREST U/S. 234A 234B AND 234C HAS B EEN QUESTIONED. 47. SO FAR AS ISSUE RAISED IN GROUND NO. 1 QUESTIO NING THE SUSTENANCE OF ADDITION OF RS. 13.50 LAKHS DOUBTING THE CREDIT WORTHINESS O F THE CREDITOR SHRI J.H. MANIYAR IS CONCERNED AN IDENTICAL ISSUE UNDER THE SIMILAR FAC TS OF THE CASE HAS BEEN DECIDED BY US HEREINABOVE IN THE CASE OF SHRI BABULAL LAXMINAR AYAN MALU (SUPRA). FOLLOWING THE DECISION TAKEN THEREIN THE MATTER IS SET ASIDE TO THE FILE OF THE LD CIT(A) TO DECIDE THE ISSUE AFRESH IN THE CASE OF THE ASSESSEE IN VIEW OF THE DECISION OF NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF CREDITOR SHRI J.H. MANIYAR AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO ESTAB LISH THE CREDIT WORTHINESS OF SHRI J.H. MANIYAR AND AVAILABILITY OF FUND DURING THE PE RIOD WHEN THE LOAN IN QUESTION WAS GIVEN TO THE ASSESSEE BY HIM AND TO THE A.O TO REBUT THE SAME. 48. SO FAR AS THE CONTENTION OF THE LD. A.R. THAT T HE FIRST APPEAL LIES ALSO AGAINST PROTECTIVE ASSESSMENT IS CONCERNED THE SAME HAS BE COME ACADEMIC ONLY IN VIEW OF THE ABOVE DECISION OF THE SETTING ASIDE OF THE ISSU E. HENCE IT DOES NOT NEED ADJUDICATION. THE GROUND IS ACCORDINGLY ALLOWED FO R STATISTICAL PURPOSES. 49. THE CHARGING OF INTEREST U/S. 234A 234B AND 23 4C QUESTIONED IN GROUND NO. 2 IS CONSEQUENTIAL IN NATURE HENCE IT DOES NOT NEE D INDEPENDENT ADJUDICATION. 50. IN RESULT APPEAL IS ALLOWED FOR STATISTICAL PU RPOSES. ITA NOS. 386 TO 390/PN/2009 ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 22 51. IN ALL THESE APPEALS TWO GROUNDS ARE COMMON. FIRSTLY THE LD CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION UNDER THE HEAD INCOME FROM DAIRY BUSINESS AND SECONDLY SUSTAINING THE CHARGING OF THE INTEREST U/ S. 234A 234B AND 234C. 52. SO FAR AS SUSTAINING OF ADDITION UNDER THE HEAD INCOME FROM DAIRY BUSINESS IS CONCERNED THE RELEVANT FACTS ARE THAT DURING ASSES SMENT PROCEEDINGS THE A.O NOTED THAT THE ASSESSEE HAD NOT OFFERED THE DAIRY I NCOME FOR TAXATION. THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF DAIRY ACTI VITY ALONG WITH YIELD AND EXPENDITURE. THE WORKING GIVEN BY ASSESSEE SHOWED L OSS IN MOST OF THE YEARS. THE A.O NOTED THAT THE LOSS WAS MOSTLY ON ACCOUNT OF HYPOTHETICAL FIGURE OF SALE OF FODDER WHICH AS PER A.O WAS NOT ACTUAL EXPENDITURE . THE A.O. OBSERVED FURTHER THAT PRODUCTION OF MILK WAS ALSO SHOWN AT AN AVERAG E OF 7 TO 8 LITERS PER DAY PER CATTLE WHEREAS AS PER HER THE HIGHBREED CATTLE AS OWNED BY THE ASSESSEE GIVES NORMAL 50 LITERS OF MILK PER DAY PER COW. THE A.O. COMPUTED THE PRODUCTION OF MILK AT 17.72 LITRE PER CATTLE IN CASE OF BUFFALO AND 10 .21 LITRE PER CATTLE IN CASE OF COW AND WORKED OUT DAIRY INCOME ACCORDINGLY WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR EACH YEAR. THE A.O. REJECTED THE CLAIM FOR SALARY AND WAGES EXPENSES IN ABSENCE OF SUPPORTING DOCUMENTS. CONSI DERING THE SUBMISSIONS OF THE ASSESSEE THE LD CIT(A) HAS HOWEVER GIVEN PART RE LIEF. THE ASSESSEE HAS QUESTIONED SUSTENANCE OF ADDITION IN THIS REGARD BY THE LD CIT(A) BEFORE US. 53. IN SUPPORT OF THE GROUND THE LD. A.R. HAS BAS ICALLY REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE SUBMITTED THAT THERE WAS NO SYSTEMATIC ACTIVITY OF DAIRY FARMING. MOST OF THE MILK PRODUCED WAS CONSUMED BY THE FAMILY MEMBERS AND SOLD WHEN IT WAS IN EXCESS. HE SUBMITTED THAT DAIRY FARMING WAS INCIDENTAL TO THE MAIN AGRICULTURAL ACT IVITY. THE LD. A.R. SUBMITTED THAT CATTLES WERE MAINTAINED FOR THE PURPOSE OF ACTIVIT Y OF ORGANIC FARMING OF VARIOUS CROPS FOR WHICH NATURAL FERTILIZER WAS REQUIRED. THE EXCESS MILK SUPPLIED TO THE DAIRY AND PAYMENTS RECEIVED FROM WERE DULY ACCOUNTE D IN THE BOOKS . EVEN THE MILK SUPPLIED TO FAMILY MEMBERS WAS BILLED AND ACCOUNTED FOR. HE SUBMITTED THAT THE ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 23 A.O DID NOT FIND ANY SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT AND SHE HAS ESTIMATED THE BILL WITHOUT ANY BASIS. THE LD. A.R. SUBMITTED FURTHER THAT THE FODDER OF THE CATTLES WAS A BY-PRODUCT OF THE AGRICULTURAL ACTIVI TIES CARRIED OUT IN THE AGRICULTURAL FARM. IT WAS BILLED SEPARATELY SINCE THE ASSESSEE HAD ADMITTED TO SEPARATE DAIRY FARMING ACTIVITY AS A PROFIT CENTRE. LD. A.R. SUB MITTED THAT THE COWS ARE PURCHASED FROM THE LOCAL MARKET AND THEREFORE THEY ARE HYBRE ED AND NOT PURE BREED OF JERSEY OR MURAH COWS. HE SUBMITTED THAT THE ASSESSEE HAD ALSO SOLD CATTLES AND AFTER ESTIMATING THE RECEIPT FROM THE SALE OF MILK BASED ON THE NUMBER OF COWS OF A PARTICULAR BREED AN ARBITRARY FIGURE HAS BEEN ARRI VED AT BY THE A.O TO COMPUTE THE NET TAXABLE INCOME FROM THE DAIRY BUSINESS. GIVING AN EXAMPLE OF ASSESSMENT YEAR OF 2006-07 THE LD. A.R. POINTED OUT THAT IN THE A. Y THE A.O HAS WORKED OUT TOTAL RECEIPT OF RS. 5 57 340/- FROM THE SALE OF MILK OF COWS AND RS. 8 93 088/- FROM THE SALE OF MILK OF BUFFALO. THE TOTAL RECEIPT HAS BE EN WORKED OUT AT RS. 14 44 428/- AND THE NET INCOME HAS BEEN COMPUTED AT RS. 10 68 0 41/- ALLOWING AN AMOUNT OF RS. 376378/- AS EXPENSES. THE A.O HAS NOT GIVEN TH E DETAILS AS TO HOW THE EXPENDITURE OF DAIRY BUSINESS HAS BEEN COMPUTED. O N THE CONTRARY THE ASSESSEE HAD FURNISHED FROM HIS BOOKS THE DETAILS OF EXPEN DITURE AT RS. 8 45 649/-. 54. THE LD. D.R. ON THE OTHER HAND PLACED RELIANC E ON THE ASSESSMENT ORDER. 55. CONSIDERING THE ABOVE SUBMISSIONS WE FIND SUB STANCE IN THE CONTENTION OF THE LD. A.R. TO THIS EXTENT THAT THERE SHOULD HAVE BEEN SOME BASIS WITH THE A.O FOR WORKING OUT THE EXPENDITURE BY HER ON DAIRY BUSINES S. WE ALSO AGREE WITH THE CONTENTION OF LD. A.R. THAT CATTLE FODDER AN AGRIC ULTURAL BI-PRODUCT HAS SALEABLE VALUE. GENERAL EXPENSES SUCH AS SALARY AND LABOUR W OULD ALSO HAVE TO BE ATTRIBUTED TO THE DAIRY BUSINESS IN ORDER TO BRING OUT THE AC TUAL PROFITS FROM SUCH BUSINESS. CONSIDERING ALL THESE MATERIAL ASPECTS WE ARE OF THE VIEW THAT THE LD CIT(A) HAS RIGHTLY DECIDED THE ISSUE. THE RELEVANT PARA NO. 2 2 OF THE ORDER IS BEING REPRODUCED HEREUNDER FOR A READY REFERENCE : ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 24 22. I DO NOT AGREE WITH THE AO WITH REGARD TO THE DISALLOWANCES OF EXPENDITURE. IN THE APPELLANTS BOOKS THE EXPEND ITURE ON DAIRY FARM AS WELL AS AGRICULTURE OPERATIONS ARE INTERMINGLED. THE AP PELLANT HAS CULLED OUT EXPENDITURE FROM THE BOOKS WHICH RELATES TO THE DA IRY ACTIVITY SUCH AS MEDICINES ETC. GENERALLY EXPENSES SUCH AS SALARY AND LABOUR WOULD ALSO HAVE TO BE ATTRIBUTED TO THE DAIRY BUSINESS IN ORDE R TO BRING OUT THE ACTUAL PROFITS FROM SUCH BUSINESS. THE ENTIRE EXPENDITURE CANNOT BE ALLOWED ONLY UNDER THE HEAD OF AGRICULTURAL INCOME. THE FODDER IS AN AGRICULTURAL BY- PRODUCT WHICH HAS SALEABLE VALUE. INSTEAD OF SELL ING IT IN THE MARKET THE APPELLANT HAS USED IT FOR ITS OWN CATTLE. THE EXPE NDITURE THEREFORE SHOULD BE DEBITED TO HAVE AN ACCURATE IDEA OF THE PROFITS OF THE DAIRY BUSINESS. THE APPELLANT HAD GIVEN A DETAILED CHART SHOWING AVER AGE FODDER CONSUMPTION ON THE BASIS OF WHICH THE AMOUNT FOR SELL FODDER H AS BEEN CALCULATED. IN THE SAME MANNER AS SELF FODDER IS DEBITED TO THE ACCOU NT THE APPELLANT HAS CREDITED THE DAIRY ACCOUNT WITH COMPOST SALE SINCE THIS RECEIPT IS RELATABLE TO THE DAIRY BUSINESS. IN MY OPINION THEREFORE THE EXPENDITURE WHICH IS CLAIMED BY THE APPELLANT SHOULD BE ALLOWED. THE IN COME FROM DAIRY BUSINESS SHOULD THEREFORE BE COMPUTED AS UNDER; A.Y. RECEIPTS EXPENDIT URE INCOME 2002-03 454086 267020 187066 2003-04 689760 472397 217363 2004-05 765936 576040 189896 2005-06 1093356 751592 341764 2006-07 1444428 845649 598779 THE AO IS DIRECTED ACCORDINGLY. AS DISCUSSED ABOVE WE FIND THAT THE LD CIT(A) CONS IDERING THE TOTALITY OF THE FATS ON THE ISSUE HAS GIVEN A REASONABLE FINDING TAKING INT O ACCOUNT THE NEEDED EXPENDITURE AS POINTED OUT BY THE ASSESSEE. THE FIRST APPELLA TE ORDER IN OUR VIEW IS REASONED ONE HENCE WE ARE NOT INCLINED TO INTERFERE THEREWI TH. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 25 56. SO FAR AS CHARGING OF INTEREST U/S. 234A 234B AND 234C IS CONCERNED IT IS CONSEQUENTIAL IN NATURE HENCE IT DOES NOT NEED IND EPENDENT ADJUDICATION. 57. IN A.YS. 2002-03 AND 2003-04 THE ASSESSEE HAS QUESTIONED THE SUSTENANCE OF ADDITION OF RS. 20 LAKHS IN A.Y. 2002-003 AND RS . 15 LAKHS IN A.Y. 2003-04 ON ACCOUNT OF LOAN TAKEN FROM SHRI J.H. MANIYAR AND TH AT THE LD CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE APPEAL IS NOT MAINTAINABLE AGAI NST PROTECTIVE ASSESSMENT IN WHICH THESE ADDITIONS HAVE BEEN MADE BY THE A.O. 58. PARTIES HAVE ADOPTED THERE RESPECTIVE ARGUMENTS ADVANCED BY THEM ON THE IDENTICAL ISSUE HEREINABOVE IN THE CASE OF SHRI BA BULAL LAXMINARAYAN MALU IT ITA NOS. 241 TO 243 AND 318 & 752/PN/2009. 59. FOLLOWING THE DECISION TAKEN ON IDENTICAL ISSUE IN ABOVE CITED APPEALS IN THE CASE OF SHRI BABULAL LAXMINARAYAN MALU UNDER SIMIL AR FACTS AND CIRCUMSTANCES SET ASIDE THE MATTER TO THE FILE OF THE A.O TO DECIDE T HE ISSUE AFRESH IN VIEW OF DECISION OF THE TRIBUNAL IN THE CASE OF THE CREDITOR SHRI J. H. MANIYAR AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO ESTAB LISH THE CREDIT WORTHINESS OF THE CREDITOR SHRI J.H. MANIYAR AVAILABILITY OF FUNDS W ITH HIM WHEN LOAN WAS GIVEN AND TO THE A.O. TO REBUT THE SAME. THE GROUND IS THUS ALL OWED FOR STATISTICAL PURPOSES. SO FAR AS CONTENTION OF THE ASSESSEE THAT FIRST APPEAL LIES ALSO AGAINST PROTECTIVE ASSESSMENT IS CONCERNED IT HAS BECOME ACADEMIC ONL Y HENCE IT DOES NOT NEED SEPARATE ADJUDICATION. 60. IN A.Y . 2002-03 THE ASSESSEE HAS QUESTIONED THE SUSTENANCE OF ADDITION OF RS. 17 LAKHS ON ACCOUNT OF DONATIONS MADE TO TIR UPATI DEVASTHAN OUT OF UNEXPLAINED SOURCES AND FURTHER THAT THE LD CIT(A) WAS NOT JUSTIFIED IN HOLDING THE APPEAL AS NOT MAINTAINABLE AGAINST PROTECTIVE ASSES SMENT. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 26 61. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW WE FIND THAT THE LD CIT(A) HAS NOT DECIDED THE ISSUE ON ITS MERITS ON T HE BASIS THAT THE APPEAL ON THE ISSUE IS NOT MAINTAINABLE SINCE ADDITION IN QUESTIO N IN THE HANDS OF THE ASSESSEE AGRICULTURE FARM HAS BEEN MADE ON PROTECTIVE BASIS. HE HAS HOWEVER NOTED THAT SUBSTANTIVE ADDITIONS MADE ON ACCOUNT OF UNEXPLAINE D DONATION BY DIFFERENT INDIVIDUAL ASSESSEES OF MALU FAMILY TO TIRUPATI DEV ASTAN ARE SUBJECT MATTERS OF APPEAL IN THE RESPECTIVE CASES. WE HAVE NOTED HERE INABOVE IN INDIVIDUAL CASES OF MEMBERS OF MALU FAMILY ON THE ISSUE THAT THE LD CIT (A) HAS DELETED THE ADDITIONS MADE IN THE HANDS OF RESPECTIVE MEMBERS OF MALU FAM ILY ON THE BASIS OF DECISION TAKEN BY THE FIRST APPELLATE AUTHORITY IN THE CASE OF RAJENDRA MALU FOR THE A.Y. 2002- 03. THE ASSESSEE THEREIN TRIED TO EXPLAIN THE SOURC E OF DONATION AS INCOME RECEIVED FROM VENKATESHWARA AGRICULTURE FARM. THE ADDITION THEREIN HAS BEEN DELETED ON THE GROUND THAT WITHOUT GOING INTO THE NATURE OF TH E INCOME ON THE MERIT OF THE ADDITION IN THE CASE OF VENKATESWARA AGRICULTURE FA RM THE AMOUNT OF INCOME WAS AVAILABLE FOR APPLICATION FOR THE PURPOSE OF THE DO NATION. IT WAS POINTED OUT THAT THE A.O HAD NOT ACCEPTED ENTIRE INCOME SHOWN FROM THE A GRICULTURE WHICH THE ASSESSEE TRIED TO EXPLAIN THE SOURCE FOR THE DONATION. A PO RTION OF THE INCOME DECLARED FROM AGRICULTURE WAS TREATED AS INCOME FROM OTHER SOURCE S. THUS IT WAS HELD THAT WHATEVER MAY BE THE NATURE OF INCOME OR THE SOURCE OF INCOME THE FACT IS THAT THE AMOUNT WAS AVAILABLE FOR THE EXPENDITURE BY WAY OF DONATION. THE LD CIT(A) HELD THAT THE ENTIRE INCOME HAS TO BE TAKEN FOR THE PURP OSES OF CASH FLOW WHETHER INCOME IS ASSESSED AS AGRICULTURE INCOME OR ASSESSE D AS INCOME FROM OTHER SOURCES. WE HAVE UPHELD SUCH FINDING OF THE LD CIT(A) IN THE CASE OF SMT. AYODHYA B. MALU & OTHERS DISCUSSED HEREINABOVE. FOLLOWING THE SAME A PPROACH EVEN IN THE PRESENT APPEAL WE ARE OF THE VIEW THAT THE LD CIT(A) OUGHT TO HAVE DECIDED THE ISSUE ON ITS MERITS. SINCE THIS ASPECT OF THE MATTER HAS NOT BE EN EXAMINED AS TO WHETHER IF THE ENTIRE INCOME (WHETHER INCOME IS ASSESSED AS AGRICU LTURAL INCOME OR ASSESSED AS INCOME FROM OTHER SOURCES) IS TAKEN FOR THE PURPOSE OF CASH FLOW WAS THERE ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 27 SUFFICIENT FUNDS AVAILABLE WITH THE ASSESSEE TO DON ATE THE AMOUNT IN QUESTION TO TIRUPATI DEVASTAN WE SET ASIDE THE MATTER TO THE F ILE OF THE LD CIT(A) TO EXAMINE THIS ASPECT OF THE MATTER IN THE CASE OF THE ASSES SEE AND DECIDE THE ISSUE AFRESH AS DISCUSSED ABOVE AFTER AFFORDING OPPORTUNITY OF BEIN G HEARD TO THE PARTIES. THE GROUND IS THUS ALLOWED FOR STATISTICAL PURPOSES. 62. IN RESULT ITA NOS. 386 & 387/PN/2009 ARE PART LY ALLOWED AND ITA NOS. 388 389 & 390/PN/2009 ARE DISMISSED. ITA NOS. 753 TO 759/PN/2009 63. IN ALL THESE APPEALS THE REVENUE HAS QUESTIONE D FIRST APPELLATE ORDER ON SEVERAL GROUNDS WHEREBY THE LD CIT(A) HAS DELETED T HE ADDITION MADE BY THE A.O ON ACCOUNT OF AGRICULTURAL SALE TREATING THE SAME A S BOGUS. IN SAME APPEALS ( A.Y. 2002-03 2003-04 2004-05 2005-06 AND 2006-07) TH E REVENUE HAS ALSO QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DAIRY BUSI NESS. AGRICULTURAL INCOME 64. IN SUPPORT OF THE GROUND THE LD D.R. HAS BASI CALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE POINTED OUT THAT WHILE DELETI NG THE ADDITION MADE ON ACCOUNT OF BOGUS AGRICULTURAL SALES THE LD CIT(A) HAS FAILED TO APPRECIATE THAT A.O HAD MADE ADDITION ONLY AFTER THE FAILURE ON THE PAR T OF THE ASSESSEE TO SUBMIT THE THIRD PARTY PROOF IN SUPPORT OF SO CALLED AGRICULT URAL SALE PROCEEDS. HE OUGHT TO HAVE APPRECIATED THAT AGRICULTURAL SALES WHICH WERE PROPERLY BILLED WAS ACCEPTED BY THE A.O. HE SUBMITTED THAT THERE WAS NO EVIDENCE T O SUPPORT AGRICULTURAL ACTIVITIES DONE BY THE ASSESSEE. THERE ARE OTHER BUSINESS ALS O BESIDES AGRICULTURAL INCOME. THE LD. D.R SUBMITTED THAT NO BOOKS OF ACCOUNT WAS FOUND DURING THE COURSE OF ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 28 SEARCH OR SURVEY HENCE THE BOOKS PREPARED AND PRO DUCED LATER ON ARE NOT RELIABLE. HE SUBMITTED FURTHER THAT NO 7/12 EXTRACTS WAS FURN ISHED BEFORE THE A.O IN SUPPORT OF THE ENTIRE TYPE OF CROPS FROM WHICH INCOME HAS B EEN CLAIMED BY THE ASSESSEE. HE SUBMITTED FURTHER THAT IGNORING ALL THESE MATERI AL FACTS THE LD CIT(A) WAS NOT JUSTIFIED IN GRANTING COMPLETE RELIEF ON ACCOUNT OF AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE. 65. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT THE BOOKS OF ACCOUNT WERE REGULARLY MAINTAINED REGARDING THE AGRICULTURAL ACT IVITIES OF THE ASSESSEE ON THE BASIS OF WHICH THE ASSESSEE HAS BEEN FILING ITS RETURN O F INCOME. HE REFERRED PAGE NOS. 37 TO 69 OF THE PAPER BOOK I.E. COPIES OF STATEMENT OF ACCOUNTS AND RETURNS OF INCOME FILED FOR A.YS. UNDER CONSIDERATION. HE SUB MITTED FURTHER THAT COPIES OF ALL 7/12 EXTRACTS MADE AVAILABLE AT PAGE NOS. 70 TO 75 OF THE PAPER BOOK WERE FURNISHED BEFORE THE AUTHORITIES BELOW. THE LD. A .R. SUBMITTED THAT IN THE BOOKS OF ACCOUNT FOR ITS AGRICULTURE ACTIVITIES MAINTAINED B Y THE ASSESSEE IT HAS SHOWN THE AGRICULTURAL PRODUCTION SALES LABOUR PAYMENT PLA NT PURCHASES SEEDS FOR GREEN VEGETABLES PURCHASES AND DAIRY SALES. HE SUBMITTE D THAT AT THE TIME OF SURVEY ACTION THE BOOKS OF ACCOUNT WERE VERY MUCH THERE BUT WERE NOT INVENTORIZED. THE LD. A.R. POINTED OUT THAT THE A.O IN THE ASSESSMENT ORDER FOR A.Y. 2002-03 HAS MENTIONED ON PAGE 6/7 THAT JUST BECAUSE ONE IS MAIN TAINING REGULAR BOOKS OF ACCOUNT AND FILING RETURN DOES NOT MEAN THAT THE IN COME SHOWN BY THE PERSON IS CORRECT. THE INCOME HAS TO BE SUPPORTED BY SOME EVI DENCE. IT SHOWS THAT THE ASSESSEE HAD MAINTAINED BOOKS OF ACCOUNT. THE LD. A.R SUBMITTED THAT THE A.O DID NOT AGREE WITH THE CLAIM OF THE ASSESSEE REGARDING GROWING OF DIFFERENT TYPES OF VEGETABLE AND FRUITS ONLY ON THE BASIS THAT IN 7 /12 EXTRACTS ALL THESE VEGETABLES AND FRUITS GROWN BY THE ASSESSEE WERE NOT MENTIONED . THE LD. A.R SUBMITTED THAT THE CONCERNED OFFICIAL GENERALLY DOES NOT BOTHER TO MENTION ALL THE TYPES OF VEGETABLES AND FRUITS GROWN BY THE LAND HOLDER IN 7 /12 EXTRACTS. THUS 7/12 EXTRACTS CANNOT BE MADE EXCLUSIVE EVIDENCE TO SUPPORT THE AC TUAL AGRICULTURAL ACTIVITIES BY A ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 29 CULTIVATOR. HE SUBMITTED THAT IN THE PAPER BOOK C OPIES OF 7/12 EXTRACTS WERE SUBMITTED FOR 1 YEAR I.E. F.Y. 1999-2000 ONLY HOWE VER AT THE TIME OF HEARING THE 7/12 EXTRACTS FOR OTHER YEARS WERE SUBMITTED SHOWI NG SUCH CROPS FRUITS LIKE MANGO CHIKKU PAPAYA BANANA ETC. AND VEGETABLES WITH RE SPECTIVE CULTIVATED AREAS. THE ORIGINAL BILLS FOR PURCHASES OF FERTILIZERS SPECIFI CALLY REQUIRED FOR GROWING THE VEGETABLES THE PURCHASE OF PLANTS FOR CULTIVATION OF BRINGELS VEGETABLES ETC. LABOUR CHARGES PAID ETC. ARE STILL PRESERVED WHICH HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED. THE BANK ACCOUNT OF THE FIR M ALSO FINDS INCORPORATED IN THE BOOKS OF ACCOUNT. THE LD. A.R. SUBMITTED FURTHER THAT THE ASSESSEE IS HOLDING 74.32 ACRES OF LAND AND HAVE GROWN FRUITS AND VEGE TABLES BESIDES THE CROPS WHICH ARE VERY MUCH POSSIBLE TO GROW AS PER THE REPORT OF NATIONAL HOUSING BANK (NHB) AND INDIAN COUNCIL OF AGRICULTURAL RESEARCH (ICAR). THE LD. A.R. HAS FURNISHED COMPARATIVE CHART OF THE PRODUCE GROWN BY THE ASSES SEE AND THE REPORT OF NHB AND ICAR SHOWING THE POSSIBLE YIELD PER HECTAR OF LAND IN THE AREA. THE LD. A.R. HAS ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1) ITO VS. RAJENDRA TIWARI (2004) 82 TTJ (NAG.) 347 2) KAMAL KISHORE CHANDAK VS. ITO 130 TTJ 843 (JODH.) 3) SUJAN SINGH BUNDELS VS. ACIT 350 ITR 491 (AGR.) 4) LATE SHRI S.M. BASHEER V/S. ITO ( 13 TTJ (KAN) 236 5) CIT VS. RAMKRISHNA DEV 35 ITR 312 (SC) 6) CIT VS. R. VENKATESWAMI NAIDU 29 ITR 529 (SC) 66. CONSIDERING THE ABOVE SUBMISSIONS THERE IS NO DOUBT ON THE CONTENTION OF THE LD. A.R. THAT BOOKS OF ACCOUNT MAINTAINED BY T HE ASSESSEE IN REGULAR COURSE OF THE BUSINESS CANNOT BE OUTRIGHTLY REJECTED WITHOUT ASSIGNING PROPER REASON FOR THE SAME BUT IN THE PRESENT CASE BEFORE US THE AVAILAB ILITY OF BOOKS OF ACCOUNT REGULARLY MAINTAINED REMAINED DOUBTFUL AS THE SAME WAS NOT FO UND DURING THE COURSE OF SEARCH AND SEIZURE OR SURVEY OPERATIONS. THE A.O N OWHERE HAS ACCEPTED ANY ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 30 SPECIFIC WORDING THAT BOOKS OF ACCOUNTS WERE FOUND DURING THE COURSE OF SEARCH OR SURVEY OPERATION HENCE EXISTENCE OF THE SAME ALWA YS REMAINED IN DOUBT. UNDER THESE CIRCUMSTANCES THE ONLY OPTION LEFT WITH THE AUTHORITIES BELOW WAS TO EXAMINE THE POSSIBILITY OF ACCEPTANCE OF THE CLAIMED AGRICU LTURE INCOME BY THE ASSESSEE ON ESTIMATE BASIS KEEPING IN MIND THE AREA OF LAND HEL D BY THE ASSESSEE AND AGRICULTURAL ACTIVITIES SHOWN BY THE ASSESSEE THER EON SUPPORTED WITH EVIDENCE. THE A.O NOTED THAT THERE WAS SUBSTANTIAL CASH DEPOSITS IN THE ACCOUNT OF THE ASSESSEE WHICH WERE STATED TO BE OUT OF AGRICULTURAL INCOME. FROM THE DETAILS FURNISHED OF AGRICULTURAL INCOME IT WAS SEEN THAT WHILE PART OF AGRICULTURAL PRODUCE WAS PROPERLY BILLED SOME OF VEGETABLES AND FRUITS WERE SHOWN TO HAVE BEEN SOLD IN CASH THESE SALES WERE NOT SUPPORTED BY THIRD PARTY EVIDE NCE. OTHER SALES OF SOYABEEN ONION RICE SUGARCANE ETC. WERE SUPPORTED BY THIR D PARTY EVIDENCE. VEGETABLES AND FRUITS WHICH WERE SOLD IN CASH WERE NOT MENTION ED IN 7/12 EXTRACTS. THE A.O. ACCEPTED ONLY THOSE SALES WHICH WERE SUPPORTED BY EVIDENCE AS GENUINE SALES OF AGRICULTURAL PRODUCE. THE A.O NOTED THAT NO BOOKS WERE FOUND DURING THE COURSE OF SEARCH/SURVEY. HE ALSO NOTED THAT THE VERY FACT TH AT BOOKS WERE MAINTAINED WAS NOT SUFFICIENT TO ACCEPT THE AGRICULTURAL INCOME DECLAR ED. WE THUS FIND THAT THE A.O HAS SAID SO IN DIFFERENT CONTEXT FIRSTLY THE ASSESSEE HAD NOT MAINTAINED BOOKS OF ACCOUNT REGARDING THE AGRICULTURAL ACTIVITIES AS THE SAME W AS NOT FOUND DURING THE COURSE OF SEARCH/SURVEY AND SECONDLY; EVEN IF THE BOOKS WERE MAINTAINED IT WAS NOT SUFFICIENT TO ACCEPT THE AGRICULTURAL INCOME DECLARED SINCE IN COME IN CASH WAS NOT SUPPORTED BY EVIDENCE. THE A.O ACCORDINGLY CONCLUDED THAT TH E CASH SALES SHOWN AS AGRICULTURAL INCOME WAS BOGUS AND IT REPRESENTED TH E INCOME FROM UNDISCLOSED SOURCES. THE CONTENTION OF THE ASSESSEE BEFORE THE LD CIT(A) REMAINED THAT THE CULTIVATION OF FRUIT WAS A FACT WHICH WAS DULY MENT IONED IN 7/12 EXTRACTS. HOWEVER NO MENTION OF SUCH PRODUCTS CANNOT LEAD TO CONCLUSI ON THAT SUCH PRODUCTS WERE NEVER CULTIVATED. IT WAS AGAIN CLAIMED THAT BOOKS HAVE BEEN REGULARLY MAINTAINED AND AVAILABLE FOR VERIFICATION. THE FURTHER CONTEN TION REGARDING 7/12 EXTRACTS REMAINED THAT ON MANY OCCASIONS 7/12 EXTRACTS CONT AINS THE SAME NOTATIONS FROM ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 31 YEAR TO YEAR AS INFORMATION IS SIMPLY COPIED FROM Y EAR TO YEAR WITHOUT ACTUAL VERIFICATION. IT WAS FURTHER CONTENDED THAT SIMPLY BECAUSE CROPS ARE SOLD IN CASH IT CANNOT BE SAID THAT IT WAS A BOGUS SALE. IN NORMA L PRACTICE AGRICULTURAL PRODUCE ARE MOSTLY SOLD IN CASH AT THE SPOT. IT IS THE REAS ON THAT PROVISIONS OF SECTION 40A(3) DOES NOT APPLY WHERE THE PAYMENT IN CASH IS FOR PURCHASE OF AGRICULTURAL PRODUCE FROM THE FARMERS. REGARDING VEGETABLES TH E ASSESSEE SUBMITTED THAT VEGETABLES ARE NORMALLY GROWN AS INTER CROPS BETWE EN TWO MAIN CROPS AND GENERALLY THE CULTIVATION OF VEGETABLES IS NOT MENT IONED IN 7/12 EXTRACTS. THE LD CIT(A) HAS OBSERVED THAT FINDING OF THE A.O WITH RE GARD TO SALE OF FRUITS IS NOT CORRECT SINCE THE COPIES OF 7/12 EXTRACTS FURNISHED BY THE ASSESSEE CONTAINED DETAILS OF FRUITS GROWN ON THE LAND. THE FRUITS ARE DESC RIBED AS MANGOES CHIKKU BANANA COCONUT PAPAYA LEMON ETC. REGARDING VEGETABLE THE LD CIT(A) HAS OBSERVED THAT COMPARED TO THE LAND HOLDING THE SALE OF VEGETABLES AT RS. 15 LAKHS OVER THE PERIOD OF 7 YEARS CANNOT BE SAID TO BE AN UNLIKELY SUM ES PECIALLY WHEN THE ASSESSEE IS PRIMARILY AN AGRICULTURAL FARM WHICH HAS BEEN SET U P FOR THE AGRICULTURAL ACTIVITIES. HE HAS FURTHER NOTED THAT THE A.O HAS ADDED THE EN TIRE AMOUNT SHOWN AS CASH SALES AS INCOME OF THE ASSESSEE FROM UNDISCLOSED IN COME WITHOUT APPRECIATING THAT IF THIS INCOME IS REMOVED FROM THE AGRICULTURAL REC EIPT A PECULIAR SITUATION EMERGES IN WHICH IN ALMOST ALL THE YEARS THE INCOME IS LOW ER THAN THE TOTAL EXPENDITURE DEBITED TO THE BOOKS RESULTING IN LOSS FROM AGRICU LTURAL ACTIVITIES WHICH IS UNUSUAL TO SAY. HE HAS ALSO NOTED THAT THE PRODUCTION OF FRUIT S IS WITHIN THE STANDARDS PUBLISHED BY INDIAN GOVERNMENT BODIES. HE HAS ALSO NOTED THA T YIELD OF FRUITS AND VEGETABLES PER UNIT AREA WAS COMPARED WITH THE STANDARDS EVOLV ED BY THE NATIONAL HOUSING BANK FOR THE PURPOSE OF AGRICULTURAL CREDIT. HE NO TED THAT EXCEPT IN THE CASE OF BANANA THE STANDARDS OF YIELD FOLLOWED BY NHB ARE M UCH HIGHER THAN THE ACTUAL YIELD OBTAINED BY THE ASSESSEE. HE HAS NOTED FURTHE R THAT IN CASE OF BANANA ALSO WHILE ASSESSEES YIELD IS ACTUALLY HIGHER THAN THE STANDARDS THE AVERAGE YIELD OVER THE PERIOD WORKS OUT TO 56 AS AGAINST THE STANDARD OF 65. THE LD CIT(A) HAS NOTED FURTHER THAT THE ASSESSEE WAS ASKED TO PRODUCE THE CASH BOOKS SALES LEDGER ETC. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 32 EXAMINATION OF THESE DOCUMENTS SHOWED THAT THE CASH DEPOSITS WHICH HAVE BEEN FOUND BY THE A.O VARY FROM VERY SMALL FIGURES TO L ITTLE ABOVE RS. 1 00 000/-. IT IS NOT AS IF THE CASH DEPOSITS ARE OF LARGE AMOUNTS IN ONE LUMPSUM. SECONDLY THE DEPOSITS ARE WELL PLACED WHICH LAYS SUPPORT TO THE ASSESSEES CONTENTION THAT THE AMOUNT DO NOT REPRESENT EACH AND EVERY SALE BUT CO NSOLIDATED FIGURES OF SALE OVER A CERTAIN NUMBER OF DAYS. IT WAS ALSO STATED THAT CERTAIN CASH EXPENSES ARE ALSO INCURRED FROM THE CASH RECEIPTS AND ONLY THE NET AM OUNT REMAINING IS DEPOSITED IN THE ACCOUNT. THE DISTRIBUTION OF THE CASH DEPOSITS THE MAGNITUDE OF THE DEPOSIT DO NOT APPEAR TO BE SUCH AS TO CONCLUDE THAT THESE AR E NOT AMOUNTS RECEIVED BY WAY OF CASH SALES BUT UNACCOUNTED INCOME INTRODUCED INT O THE BOOKS. THE LD CIT(A) HAS ALSO NOTED IN PARA NO. 11 THAT ASSESSEE HAS MAINTAI NED BOOKS OF ACCOUNT WHERE EACH AND EVERY ITEMS OF PURCHASE AND SALE AND OTHER EXPENSES WERE RECORDED. WE DO NOT AGREE WITH THIS NOTING OF THE LD CIT(A) AS N OWHERE IN THE ASSESSMENT ORDER NOR IT IS THE CASE OF THE LD CIT(A) THAT BOOKS OF A CCOUNTS WERE FOUND AVAILABLE DURING THE COURSE OF SEARCH OR SURVEY OPERATION. NO PLAUSIBLE REASONS HAS BEEN ASSIGNED BY THE ASSESSEE REGARDING THE NON-AVAILAB ILITY OF BOOKS OF ACCOUNTS DURING THE COURSE OF SEARCH OR SURVEY. THUS RELIABILITY OF SUCH BOOKS OF ACCOUNT EVEN IF FURNISHED AT LATER STAGE IS ALWAYS QUESTIONABLE. U NDER THESE CIRCUMSTANCES WE DO NOT FULLY AGREE WITH THE CONCLUSION OF THE LD CIT(A ) THAT THE ADDITION MADE BY THE A.O ON ACCOUNT OF CASH SALES OF FRUITS AND VEGETABL ES ARE LIABLE TO BE DELETED. AT THE SAME TIME WE AGREE WITH THE CONTENTION OF THE LD. A.R. WHICH HAS ALSO BEEN ACCEPTED BY THE LD CIT(A) THAT SALES OF AGRICULTURA L PRODUCE INCLUDING FRUITS AND VEGETABLES ARE ALSO NORMALLY MADE IN CASH HENCE SU CH CLAIM OF THE ASSESSEE CANNOT BE TOTALLY DENIED. SINCE THE BOOKS OF ACCOUNT REGAR DING THE AGRICULTURAL ACTIVITY ESPECIALLY SPECIFIC ABOUT FRUITS AND VEGETABLES QU ESTIONED BEFORE US HAVE NOT BEEN MAINTAINED IN THE REGULAR COURSE OF THE AFFAIRS TH US CORRECT INCOME CAN NOT BE DEDUCED THEREFROM. WE ARE THEREFORE OF THE VIEW T HAT IT IS A FIT CASE TO ESTIMATE THE INCOME FROM THESE ACTIVITIES OF THE ASSESSEES A S HOLDING OF LAND OF 74.32 ACRES BY THE ASSESSEE HAS NOT BEEN DENIED NOR THIS FACT HAS BEEN DENIED THAT THE ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 33 ASSESSEE IS PRIMARILY AN AGRICULTURE FARM WHICH HAS BEEN SET UP FOR THE BUSINESS OF AGRICULTURE. WE ARE OF THE VIEW THAT UNDER THE CIR CUMSTANCES OF THE CASE IT WOULD BE REASONABLE TO ESTIMATE THE CLAIMED INCOME FROM F RUITS AND VEGETABLES BY ACCEPTING THE CLAIM OF THE ASSESSEE IN THIS REGARD UPTO THE 80 % OF THE STANDARD YIELD REPORTED BY NHB IN THE CASE OF FRUITS AND OF ICAR IN CASE OF VEGETABLE YIELD. WHERE THE ASSESSEE HAS ALREADY SHOWN THE YIELD BELO W 80% OF THE STANDARD YIELD REPORTED BY THE ABOVE GOVERNMENT BODIES A.O SHOULD NOT DISTURB THE SAME AND ACCEPT IT. IT IS ORDERED ACCORDINGLY. THE GROUND IS THUS PARTLY ALLOWED. DAIRY INCOME 67. THE ISSUE HAS ALREADY BEEN DECIDED BY US HEREIN ABOVE IN THE CASE OF APPEALS PREFERRED BY THE ASSESSEE FOR THE A.YS. 2002-03 TO 2006-07 IN ITA NOS. 386 TO 390/PN/2-009 WHEREIN AFTER DEALING WITH THE ISSUE WE HAVE ULTIMATELY UPHELD THE FIRST APPELLATE ORDER IN THIS REGARD. FOLLOWING TH E DECISION TAKEN THEREIN WE DO NOT FIND SUBSTANCE IN THE GROUND RAISED ON THE ISSUE IN THE PRESENT APPEALS PREFERRED BY THE REVENUE. THE SAME IS ACCORDINGLY REJECTED AS T HE FIRST APPELLATE ORDER IN THIS REGARD IS REASONED ONE TO WHICH WE FULLY CONCUR W ITH. 68. IN RESULT APPEALS ARE PARTLY ALLOWED. 68. IN SUMMARY ITA NOS. 241 TO 243/PN/2009 383/PN /2009 & 385/PN/2009 ARE ALLOWED; ITA NOS. 245 TO 250/PN/2009 381 382 & 384/PN/2009 386 TO 387/PN/2009 & 753 TO 759/PN/2009 ARE PARTLY ALLOWED ; AND ITAS 318/PN/2009 752/PN/2009 316 TO 317/PN/2009 388 TO 390/PN/2009 AND 244/PN/2009 ARE DISMISSED. ITAS. NO 241 242 2432/PN/2009 ETC. SHRI BABULAL L. MALU ETC. A.YS. 2001-02 2002-03 ETC. PAGE OF 34 34 69. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD SE PTEMBER 2011. SD/- SD/- ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 23RD SEPTEMBER 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT I/II KOLHAPUR/ CIT (CENTRAL) PUNE 4. THE CIT(A)- KOLHAPUR 5. THE D.R. B/A BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE