Shri Chaudhari Suresh Babubhai, v. The Income tax Officer, Ward-6(4),, Surat

ITA 2570/AHD/2006 | 2003-2004
Pronouncement Date: 08-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 257020514 RSA 2006
Bench Ahmedabad
Appeal Number ITA 2570/AHD/2006
Duration Of Justice 3 year(s) 1 month(s) 9 day(s)
Appellant Shri Chaudhari Suresh Babubhai,
Respondent The Income tax Officer, Ward-6(4),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 08-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 13-08-2007
Date Of Final Hearing 07-01-2010
Next Hearing Date 07-01-2010
Assessment Year 2003-2004
Appeal Filed On 29-11-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE SHRI BHAVNESH SAINI J.M. AND SHRI A.N.PAHUJ A A.M. ITA NO.2570/AHD/2006 & 1374/AHD/2008 ASSESSMENT YEARS: 2003-2004 CHAUDHRI SURESH BABUBHAI GAYATRI NAGAR SOCIETY STATION ROAD VYARA DIST.SURAT. V/S ITO 6(4) SURAT. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI DIVYAKANTH PARIKH FOR DEPARTMENT: SHRI M.C.PANDIT SR.DR O R D E R PER SHRI BHAVNESH SAINI J.M. THE APPEAL IN ITA NO.2570/AHD/2006 FILED BY THE ASS ESSEE AGAINST THE ORDER OF CIT(APPEALS)-IV SURAT DATED 22.05.2006 FOR ASS T. YEAR 2003-2004 CHALLENGING THE ADDITION OF RS.2 02 456/- ON ACCOUN T OF UNEXPLAINED CASH CREDIT (AGRICULTURAL INCOME). THE ADDITION OF RS.1 89 500/- IS NOT PRESSED. THE APPEAL IN ITA NO.1374/AHD/2008 BY THE SAME ASSESSEE FOR THE SAME ASSESSMENT YEAR IS DIRECTED AGAINST THE ORDER OF CI T(APPEALS)-IV SURAT DATED 11.02.2008 CHALLENGING THE PENALTY UNDER SEC TION 271(1)(C) OF THE I.T.ACT 1961 ON THE ADDITION OF RS.2 02 456/- AS C ASH CREDIT. THE PENALTY ON THE AMOUNT OF ADDITION OF RS.1 89 500/- IS ALSO NOT PRESSED. 2. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE P ARTIES PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER OBSERVED THAT SUM OF RS.2 02 456/- WAS SHOWN AS INCOME EARNE D FROM THE LAND OF ONE SHRI ABHEYSINH AS AGRICULTURAL INCOME. THE ASSESSEE FILED COPY OF THE 2 AGREEMENT IN WHICH IT WAS CLAIMED THAT HE HAS SHARE D NET AGRICULTURAL INCOME EARNED OF RS.4 04 912/- FROM SALE OF SUGARCA NE PRODUCED BY HIM IN EQUAL PROPORTION WITH SHRI ABHEYSINH AFTER DEDUCTIN G EXPENSES ON LABOUR AND SUPERVISION. THE ASSESSING OFFICER RECORDED STA TEMENT OF SHRI ABHEYSINH WHEREIN HE HAS STATED THAT ASSESSEE HAS P AID EXPENSES TO CULTIVATE THE LAND OWNED BY HIM. HE HAS ADMITTED TH AT ASSESSEE HAS NOT OWNED THIS LAND AND NO AGRICULTURAL ACTIVITY WAS UN DERTAKEN BY HIM. THE ASSESSING OFFICER ALSO RECORDED STATEMENT OF THE AS SESSEE WHEREIN HE HAS ADMITTED THE SAME AND ALSO OFFERED TO PAY THE TAX O N THIS INCOME IF IT WAS NOT CONSIDERED AS AGRICULTURAL INCOME. THE ASSESSIN G OFFICER THEREFORE HELD THAT THIS INCOME WAS NOT AN AGRICULTURAL INCOME AND ACCORDING TO STATEMENT OF ASSESSEE ADDITION WAS MADE OF RS.2 02 456/-. PE NALTY WAS ALSO INITIATED ACCORDINGLY. THE ABOVE ADDITION WAS TREATED AS UNEX PLAINED CASH CREDIT. IT WAS SUBMITTED BEFORE LEARNED CIT(APPEALS) THAT ASSE SSEE HAS SEPARATE AGRICULTURAL INCOME AND IS ALSO AGRICULTURIST. ASSE SSEE HAS SUPPLIED SEEDS TO SHRI ABHEYSINH AND ALSO PAID SUPERVISION CHARGES. A BHEYSINH HAS SHARED AGRICULTURAL INCOME THEREFORE ADDITION IS UNJUSTIF IED. THE CIT(APPEALS) HOWEVER CONFIRMED THE ADDITION BY HOLDING THAT THER E IS NO ELEMENT OF AGRICULTURAL ACTIVITY THROUGH THE ABOVE ARRANGEMENT BY WAY OF EXECUTING AGREEMENT AND ACCORDINGLY DISMISSED THE APPEAL OF T HE ASSESSEE VIDE THE IMPUGNED ORDER. PENALTY WAS ALSO CONFIRMED UNDER SE CTION 271(1)(C) OF THE ACT. 4. THE ASSESSING OFFICER MADE FURTHER ADDITION OF R S.1 89 500/- BEING UNEXPLAINED CASH CREDIT. THIS GROUND WAS NOT PRESSE D BEFORE LD. CIT(APPEALS) WHICH WAS ACCORDINGLY DISMISSED. PENAL TY WAS CONFIRMED BY CIT(APPEALS) VIDE THE IMPUGNED ORDER. AS NOTED ABOV E LEARNED COUNSEL FOR ASSESSEE DID NOT PRESS ADDITION OF RS.1 89 500/ - AS WELL AS PENALTY THEREON THEREFORE THE FINDINGS OF AUTHORITIES BELO W TO THAT EXTENT IN THE QUANTUM APPEAL AND THE PENALTY APPEAL ARE CONFIRMED BEING DISMISSED AS WITHDRAWN. 5. LEARNED COUNSEL FOR THE ASSESSEE MERELY CHALLENG ED THE ADDITION OF RS.2 02 456/- ON ACCOUNT OF NON-GENUINE AGRICULTURE INCOME AS WELL AS PENALTY THEREON. HE HAS REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES 3 BELOW AND SUBMITTED THAT SHRI ABHEYSINH WAS PRODUCE D BEFORE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED IN WHICH HE HAS ADMITTED TO HAVE PAID THE AMOUNT IN QUESTION TO THE ASSESSEE FROM TH E SALE OF AGRICULTURAL PRODUCE AFTER DEDUCTING EXPENSES. HE HAS THEREFORE SUBMITTED THAT SINCE THE SOURCE OF THE INCOME IS EXPLAINED THEREFORE N O ADDITION SHOULD BE MADE ON THIS ACCOUNT. HE HAS RELIED UPON ORDER OF ITAT BANGALORE BENCH IN THE CASE OF S.V.HARIPRASAD VS. ITO 120 TTJ 1105 AND AL SO RELIED UPON DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ASSOCIATED METAL CO.(177 ITR 428). HE HAS SUBMITTED THAT ASSESSEE MI SUNDERSTOOD THE AGRICULTURAL INCOME EARNED ON HIS OWN LAND AND THER EFORE ASSESSEE IN HIS STATEMENT AGREED TO OFFER TAX IF THE SAME INCOME IS NOT TREATED AS AGRICULTURAL INCOME FROM THE LAND BELONGING TO SHRI ABHEYSINH. O N THE OTHER HAND LD. DR RELIED UPON THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT SINCE ASSESSEE DID NOT OWN ANY AGRICULTURE LAND AND NO AG RICULTURAL ACTIVITIES HAVE BEEN CARRIED OUT BY THE ASSESSEE THEREFORE AUTHORIT IES BELOW WERE JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR EARNING OF AGRICULTURAL INCOME. LEARNED DR ALSO SUBMITTED THAT ASSESSEE IN HIS STAT EMENT HAS ADMITTED TO OFFER TAX ON THE SAME AGRICULTURAL INCOME. THEREFOR E APPEAL OF THE ASSESSEE SHOULD BE DISMISSED ON MERITS. 6. WE HAVE CONSIDERED RIVAL SUBMISSION AND MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE PROD UCED THE AGREEMENT BEFORE THE AUTHORITIES BELOW THROUGH WHICH HE HAS AGREED W ITH SHRI ABHEYSINH CHAUDHARI TO SHARE THE AGRICULTURAL INCOME OUT OF T HE LAND BELONGING TO SHRI ABHEYSINH CHAUDHARI. SHRI ABHEYSINH CHAUDHARI WAS P RODUCED BEFORE ASSESSING OFFICER FOR EXAMINATION ON OATH AND HE HA S ADMITTED IN HIS STATEMENT BEFORE ASSESSING OFFICER TO HAVE PAID THE AMOUNT IN QUESTION OUT OF THE SALE OF AGRICULTURAL PRODUCE AFTER DEDUCTING EXPENSES. IT WOULD THEREFORE PROVE THAT ASSESSEE HAS ESTABLISHED IDEN TITY OF THE PERSON WHO HAVE AGREED TO SHARE AGRICULTURAL INCOME WITH THE A SSESSEE. HIS SOURCE TO SHARE AGRICULTURAL INCOME IS ALSO PROVED. THE TRANS ACTION IN THE MATTER IS NOT DISPUTED. THE ASSESSEE IN HIS STATEMENT ADMITTED TH AT IF BY NOT HOLDING LAND NO AGRICULTURAL ACTIVITY IS TAKEN THEN HE IS READY TO PAY TAX ON THE SAME. IT WOULD THEREFORE SHOW THAT THE ASSESSEE MADE THE CO NDITIONAL ADMISSION TO PAY THE TAX ON SUCH INCOME IF HE WAS NOT HOLDING AN Y AGRICULTURAL LAND. 4 ULTIMATELY THE ASSESSING OFFICER MADE THE ADDITION OF THIS AMOUNT ON ACCOUNT OF UNEXPLAINED CASH CREDIT SHOWING AS UNEXP LAINED AGRICULTURAL INCOME. IT IS NOT IN DISPUTE THAT ASSESSEE SEPARATE LY HAS AGRICULTURE INCOME IN A SUM OF RS.3 12 484/- WHICH IS SEPARATELY TAKE N FOR RATE PURPOSES BY THE ASSESSING OFFICER IN THE COMPUTATION OF INCOME. ITA T BANGALORE BENCH IN THE CASE OF S.V.HARIPRASAD (SUPRA) HELD THAT CASH C REDIT ON ACCOUNT OF AGRICULTURAL INCOME IS GENUINE BECAUSE THE PERSON C ONCERN WITH WHOM ARRANGEMENT WAS MADE FOR GROWING AGRICULTURAL LAND IS PRODUCED BEFORE ASSESSING OFFICER IN WHICH HE HAS CONFIRMED TO HAVE SHARE THE AGRICULTURAL INCOME THEREFORE IT WAS HELD THAT ASSESSEE HAS EST ABLISHED IDENTITY OF THE CREDITOR GENUINENESS OF THE TRANSACTIONS AND CREDI TWORTHINESS OF THE CREDITOR. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ASSOCIATED METAL CO. (SUPRA) NOTED THAT SINCE THE TRIBUNAL RE CORDED FINDING OF FACTS THAT AGRICULTURAL INCOME IS EARNED IN RESPECT OF THE LAN D BELONGING TO BHOOMIDAR THEREFORE IT WOULD MEAN THAT ANY INCOME DERIVED FR OM LAND USED FOR AGRICULTURAL PURPOSES. CONSIDERING THE FACTS AND CI RCUMSTANCES NOTED ABOVE IT IS CLEAR THAT THE ASSESSEE HAS PROVED IDENTITY O F ABHEYSINH WHO HAS SHARED AGRICULTURAL INCOME WITH ASSESSEE HIS SOURC E AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. THEREFORE EVEN IF ASSESSEE IS NOT ABLE TO PROVE STRICTLY THAT HE HAS EARNED AGRICULTURAL INCO ME OUT OF THE TRANSACTION IN QUESTION BUT THE ADDITION COULD NOT BE MADE ON ACCO UNT OF UNEXPLAINED AGRICULTURAL INCOME/CASH CREDIT UNDER SECTION 68 OF THE I.T.ACT. WE MAY ALSO NOTE THAT ADMISSION IS GOOD EVIDENCE AGAINST THE MA KER BUT THE ASSESSEE IN THIS CASE HAS NOT MADE ANY EXPRESS OR SPECIFIC ADMI SSION TO TREAT THE SAME AS UNEXPLAINED AGRICULTURAL INCOME. THE ASSESSEE EX PLAINED IN HIS STATEMENT THAT IN CASE HE WAS NOT HOLDING AGRICULTURAL LAND AND INCOME IS TO BE TREATED AS NON-AGRICULTURAL HE READY TO PAY THE TAX. SUCH A CONDITIONAL STATEMENT OF THE ASSESSEE WOULD NOT GIVE ANY AUTHORITY TO THE AS SESSING OFFICER TO MAKE THE ADDITION WITHOUT BRINGING ANY CORROBORATIVE EVI DENCE ON RECORD. PARTICULARLY WHERE ALLAHABAD HIGH COURT IN THE CAS E OF ASSOCIATED METAL CO.(SUPRA) DECIDED THE ISSUE DIFFERENTLY. 7. IN THIS VIEW OF THE MATTER WE ARE OF THE VIEW T HE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH 5 CREDIT SHOWN AS AGRICULTURAL INCOME. WE ACCORDINGLY SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.2 0 2 456/-. AS A RESULT APPEAL OF ASSESSEE IN ITA NO. 2570/AHD/2006 IS PART LY ALLOWED. 8. SINCE WE HAVE DELETED THE ABOVE ADDITION THERE FORE PENALTY UNDER SECTION 271(1)(C) IS ALSO CANCELLED ON THE ABOVE AM OUNT OF RS.2 02 456/-. AS A RESULT APPEAL OF THE ASSESSEE IN ITA NO.1374/AHD /2008 IS PARTLY ALLOWED. 9. AS A RESULT BOTH APPEALS OF THE ASSESSEE ARE PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JANUARY 2010. SD/- SD/- (A.N.PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 08-01-2010 PARAS* COPY OF THE ORDER FORWARDED TO : 1. THE RESPONDENT 2. THE DCIT (APPELLANT). 3. THE CIT CONCERNED 4. THE CIT(A)-II SURAT 5. THE DR ITAT 6. GUARD FILE BY ORDER //TRUE COPY// DY.R/AR ITA T AHMEDABAD