The ITO,S.K.Ward-1,, Himatnagar v. M/s. Akshar Agro Tech, Sabarkantha

ITA 3200/AHD/2009 | 2005-2006
Pronouncement Date: 25-07-2011 | Result: Dismissed

Appeal Details

RSA Number 320020514 RSA 2009
Assessee PAN AALFA7455Q
Bench Ahmedabad
Appeal Number ITA 3200/AHD/2009
Duration Of Justice 1 year(s) 7 month(s) 25 day(s)
Appellant The ITO,S.K.Ward-1,, Himatnagar
Respondent M/s. Akshar Agro Tech, Sabarkantha
Appeal Type Income Tax Appeal
Pronouncement Date 25-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-07-2011
Assessment Year 2005-2006
Appeal Filed On 30-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER DATE OF HEARING : 20/07/2011 DRAFTED ON: 20/07/2011 ITA NO.3200/AHD/2009 ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER S.K.WARD-1 HIMATNAGAR VS. M/S.AKSHAR AGRO TECH AT/PO : DHAMDI TA.VADALI DIST.SABARKANTHA PAN/GIR NO. : AALFA 7455 Q ( APPELLANT ) .. ( RESPONDENT ) AND CO NO.300/AHD/2009 A.Y. 2005-06 ( ARISING OUT OF ITA NO.3200/AHD/2009 ) M/S.AKSHAR AGRO TECH THE INCOME TAX OFFICER DIST.SABARKANTHA .. S.K.WARD-1 HIMATNAGAR (CROSS OBJECTOR) VS. (RESPONDENT ) REVENUE BY : SHRI S.K. MEENA SR. D.R. ASSESSEE BY: WRITTEN SUBMISSIONS O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THE REVENUE IS IN APPEAL AND THE ASSESSEE IS IN CR OSS OBJECTION ARISING FROM THE ORDER OF THE LD.CIT(APPEALS)-X AH MEDABAD DATED 07/08/2009 PASSED FOR ASSESSMENT YEAR 2005-06. IN REVENUES APPEAL THE ONLY SUBSTANTIVE GROUND IS GROUND NO.1; REPRODU CED BELOW:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS.24 94 500/- MADE ON ACCOUNT OF UNEXPLAINED CREDIT U/S.68 OF THE I.T. ACT 1961. ITA NO.3200/AHD/2009 (BY REVENUE) & CO NO.300/AHD/2009 (BY ASSESSEE) ITO VS. M/S.AKSHAR AGRO TECH ASST.YEAR - 2005-06 - 2 - 2. WHILE PASSING THE ASSESSMENT ORDER U/S.143(3) OF THE I.T.ACT DATED 26/12/2007 IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE- FIRM HAS INTRODUCED PARTNERS CAPITAL IN THE YEAR U NDER CONSIDERATION AS PER THE FOLLOWING DETAILS:- SR.NO. NAME OF THE PARTNER AMOUNT CREDIT 1. BHOGILAL N. PATEL RS.7 50 000 2. KIRITBHAI B.PATEL RS.7 50 000 3. HARIBHAI D.PATEL RS.3 50 000 4. MOHANBHAI M. PATEL RS.3 50 000 5. JASHODABEN L.PATEL RS.3 50 000 TOTAL RS.25 50 000 2.1. FACTS OF THE CASE HAVE REVEALED THAT THE ASSE SSEE-FIRM HAS STARTED THE BUSINESS OF PROCESSING OF COTTON-SEEDS DURING T HE YEAR UNDER CONSIDERATION. IN COMPLIANCE OF QUERIES IN RESPECT OF THE CONTRIBUTION OF THE CAPITAL BY THE PARTNERS IT WAS STATED THAT THE FIRM WAS CONSTITUTED BY THE PARTNERS WHO ARE AGRICULTURISTS. IT WAS INFORM ED THAT THE SOURCE OF INCOME OF THE PARTNERS WAS AGRICULTURAL INCOME. IN BRIEF THE DETAILS IN RESPECT OF THE PARTNERS WERE AS UNDER:- 1. BHOGIALAL N. PATEL :- HE IS AGRICULTURIST AND HIS PAN NO.AIUPP-6340-C. HE IS HAVING AGRICULTURE LAND MOR E THAN 15 VIGHA AND HIS EARN INCOME MORE THAN 5.00 LA CS FROM AGRICULTURE SOURCE. DURING THE FINANCIAL YEAR 2004 -05 HE HAS INVESTED BY WAY OF CAPITAL AMT OF RS.7 50 000/- . HIS ITA NO.3200/AHD/2009 (BY REVENUE) & CO NO.300/AHD/2009 (BY ASSESSEE) ITO VS. M/S.AKSHAR AGRO TECH ASST.YEAR - 2005-06 - 3 - MAIN CROP IS SEEDS AND COTTON THE XEROX COPY OF AB STRACT OF 7*12 AND NAMUNA 8-A FOR SHOWING AGRICULTURE LAND ON HIS NAME. OTHER DETAILS LIKE AGRICULTURE BILLS CONFIR MATION OF LOAN FROM SOCIETY BANKS WILL SUBMIT WITHIN A 3-4 DA YS. 2. KIRITBHAI B.PATEL :- HE IS AN AGRICULTURIST AND HIS PAN ANHPP8667Q. HE IS HAVING AGRICULTURE LAND MORE THA N 20 VIGHA. HE IS PRODUCING COTTON AND SEEDS. THE XERO X COPY OF ABSTRACT 7*12 AND 8-A IS ENCLOSED FOR YOUR KIND CONSIDERATION. HE IS HAVING AGRICULTURE INCOME MOR E THAN RS.5.00 LACS IN A YEAR. HE IS INVESTED CAPITAL IN THE FIRM AMT OF RS.7 50 000/- FROM SOURCE OF AGRICULTURE INCOME. 3. HARIBHAI D.PATEL :- HE IS A AGRICULTURIST AND HAVING PAN NO AMNPP3445M. HE IS HAVING AGRICULTURE AND APPROXIMATELY 18 VIGHA AND HIS YEARLY INCOME APPROXIMATELY MORE THAN 5.00 LAKHS FROM AGRICULTURE SOURCE. HE HAS INVESTED CAPITAL AMOUNT OF RS.3 50 000 IN THE BUSINESS DURING THE F.Y. 2004-05 THIS INVESTME NT MADE FROM AGRICULTURE INCOME WHICH IS TAX FREE U/S.10 O F I.T. ACT. 4. MOHANBHAI M. PATEL :- HE IS AGRICULTURIST AND HIS PAN NO.AEJPP-2575H. HE IS FILING INCOME TAX RETURN AND SHOWING TAXABLE INCOME AMT OF RS.2 21 382/- FOR THE A.Y. 2004-05. HE IS WORKING WITH CO-OP BANK. WE ARE AL SO ENCLOSING HEREWITH PROOF OF I.T. RETURN AND PROOF O F AGRICULTURE LAND PERTAINING TO ABSTRACT OF 7*12 AND NAMUNA NO.8-A FOR YOUR INFORMATION. HE HAS INVESTED BY WA Y OF CAPITAL AMT. OF RS.3 50 000/- DURING THE FINANCIAL YEAR 2004-05. 5. JASHODABEN L.PATEL :- JASHODABEN L. PATEL IS A PARTNER AND SHE HAS INVESTED AMT. OF RS.3 50 000/- IN THE B USINESS BY WAY OF CAPITAL AND HER HUSBAND IS AGRICULTURIST AND HAVING LAND MORE THAN 18 VIGHA. SHE IS ALSO HAVING MILK I NCOME ITA NO.3200/AHD/2009 (BY REVENUE) & CO NO.300/AHD/2009 (BY ASSESSEE) ITO VS. M/S.AKSHAR AGRO TECH ASST.YEAR - 2005-06 - 4 - AND HAVING MEMBER OF CO-OP SOCIETY WHERE SHE SUPPLI ED MILK. THE INCOME PROOF OF MILK WILL SUBMIT WITHIN A 3-4 DAYS. 2.2. HOWEVER THE ASSESSING OFFICER NOT CONVINCED A ND BY APPLYING THE PROVISIONS OF SECTION 68 OF THE I.T.ACT TAXED THE SAID CAPITAL OF THE PARTNERS IN THE HANDS OF THE FIRM. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LEARNED CIT(APPEALS) HAS FOLLOWED THE DECISI ON(S) OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF INDIA RICE MIL LS VS. CIT REPORTED AT 218 ITR 508(ALL.) AND OF ITO VS. PATEL RAJESH KUMAR KANTILAL 64 TTJ (AHD) 460 [AHD.] AND HELD THAT THE CAPITAL INTRODUC ED BY THE PARTNERS BEFORE THE COMMENCEMENT OF THE BUSINESS MUST NOT BE SUSTAINED IN THE HANDS OF THE APPELLANT-FIRM U/S.68 OF THE I.T.ACT. HE HAS ALSO HELD THAT THE ASSESSING OFFICER IS FREE TO TAKE APPROPRIATE A CTION IN THE HANDS OF THE RESPECTIVE PARTNERS. BEING AGGRIEVED THE REVENUE IS FURTHER IN APPEAL BEFORE US. 4. ON THE DATE OF HEARING ONLY WRITTEN SUBMISSIONS WERE PLACED ON RECORD FROM THE SIDE OF THE RESPONDENT-ASSESSEE. F ROM THE SIDE OF THE REVENUE DEPARTMENT THE LEARNED DEPARTMENTAL REPRES ENTATIVE MR.S.K.MEENA APPEARED AND PLACED RELIANCE ON THE OR DER OF THE ASSESSING OFFICER. HE HAS ALSO PLEADED THAT THE LE ARNED CIT(APPEALS) HAS IGNORED THE FACT THAT THE ASSESSEE HAS NOT FURN ISHED ALL THE INFORMATION CALLED FOR IN RESPECT OF THE PARTNERS. IN THE ABSE NCE OF THOSE INFORMATION ITA NO.3200/AHD/2009 (BY REVENUE) & CO NO.300/AHD/2009 (BY ASSESSEE) ITO VS. M/S.AKSHAR AGRO TECH ASST.YEAR - 2005-06 - 5 - THE ASSESSING OFFICER HAD NO OPTION BUT TO TAX IN T HE HANDS OF THE ASSESSEE. 5. HAVING CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES THE ISSUE NOW STOOD COVERED BY THE DECISION OF HON'BLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. PANKAJ DYESTUFF INDUSTRIES (IN IN COME TAX REFERENCE NO.241 OF 1993) ORDER DATED 06/07/2005 WHEREIN THE HIGH COURT HELD THAT IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENT S THE ASSESSING OFFICER WAS NOT LEGALLY CORRECT IN MAKING THE ADDITION OF C APITAL INTRODUCED BY THE PARTNERS IN THE CASE OF PARTNERSHIP-FIRM. ON ONE HAND HE WAS DIRECTED TO DELETE THE ADDITION IN THE HANDS OF THE FIRM HOWEVER GIVEN A DIRECTION THAT THE ASSESSING OFFICER SHOULD TAKE AC TION IN THE RESPECTIVE HANDS OF THE PARTNERS SINCE THE CAPITAL INTRODUCED BY THE PARTNERS WAS NOT EXPLAINED. NOW BEFORE US A DECISION OF ITAT A B ENCH IN THE CASE OF ITO VS. M/S.AKSHAR AGRO TECH BEARING ITA NO.1063/A HD/2010 FOR ASSESSMENT YEAR 2006-07 DATED 25/06/2010 HAS ALSO PLACED WHEREIN THE RESPECTED CO-ORDINATE BENCH HAS HELD THAT THER E WAS NO OPTION BUT TO FOLLOW THE JUDGEMENT OF THE HON'BLE JURISDICTION AL HIGH COURT HOWEVER IT WAS DIRECTED TO TAKE APPROPRIATE ACTION IN THE HANDS OF THE PARTNERS. LIKEWISE IN THE PRESENT APPEAL WE HOLD ACCORDINGLY. 6. IN THE RESULT REVENUES APPEAL STANDS DISMISSED . ASSESSEES CO NO.300/AHD/2009 A.Y. 2005-06 (ARISI NG OUT OF ITA NO.300/AHD/2009 A.Y. 2005-06) 7. THE ONLY GROUND RAISED IN THE CROSS OBJECTION R EADS AS UNDER: ITA NO.3200/AHD/2009 (BY REVENUE) & CO NO.300/AHD/2009 (BY ASSESSEE) ITO VS. M/S.AKSHAR AGRO TECH ASST.YEAR - 2005-06 - 6 - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL -X) AHMEDABAD HAS ERRED IN SUSTAINING ADDITION OF RS.75 500/- FOR PARTNERS CAPITAL BROUGHT IN THE FIRM AND SAME HAVE BEEN ADDED IN THE FIRMS. IT IS SUBMITTED THAT ADDITION SUSTAI NED BE DELETED. 7.1 THIS CROSS OBJECTION WAS NOT PRESSED BEFORE U S HENCE DISMISSED BEING NOT PRESSED. 8. IN THE RESULT REVENUES APPEAL AS WELL AS CRO SS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 25 TH JULY 2011. SD/- SD/- ( A.K. GARODIA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD; DATED 25/ 07 /2011 T.C. NAIR SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-X AHMEDABAD 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD ITA NO.3200/AHD/2009 (BY REVENUE) & CO NO.300/AHD/2009 (BY ASSESSEE) ITO VS. M/S.AKSHAR AGRO TECH ASST.YEAR - 2005-06 - 7 - 1. DATE OF DICTATION..20/07/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20/07/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S25.7.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.7.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER