The DCIT, Circle-1,, JUNAGADH v. Shri Pethaljibhai Nathabhai Chavda,, JUNAGADH

ITA 372/RJT/2012 | 2006-2007
Pronouncement Date: 25-10-2013 | Result: Allowed

Appeal Details

RSA Number 37224914 RSA 2012
Assessee PAN ABFPC9564M
Bench Rajkot
Appeal Number ITA 372/RJT/2012
Duration Of Justice 1 year(s) 4 month(s) 19 day(s)
Appellant The DCIT, Circle-1,, JUNAGADH
Respondent Shri Pethaljibhai Nathabhai Chavda,, JUNAGADH
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 25-10-2013
Date Of Final Hearing 03-10-2013
Next Hearing Date 03-10-2013
Assessment Year 2006-2007
Appeal Filed On 06-06-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH RAJKOT .. .. BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. S RIVASTAVA AM ITA NOS. 203 & 204/RJT/2012 / ASSESSMENT YEAR : 2006-07 & 2007-08 SHRI PETHALJIBHAI NATHABHAI CHAVDA DR. SUBHASH BHAVAN KHAM DHROL ROAD JUNAGADH PAN: ABFPC 9564 M ( / APPELLANT) THE DY COMMISSIONER OF INCOME-TAX JUNAGADH CIRCLE-1 JUNAGADH / RESPONDENT ITA NOS. 372 & 373/RJT/2012 / ASSESSMENT YEAR : 2006-07 & 2007-08 THE DY COMMISSIONER OF INCOME-TAX JUNAGADH CIRCLE-1 JUNAGADH ( / APPELLANT) SHRI PETHALJIBHAI NATHABHAI CHAVDA DR. SUBHASH BHAVAN KHAM DHROL ROAD JUNAGADH PAN: ABFPC 9564 M / RESPONDENT ! ' #$ / ASSESSEE BY SHRI M P SHARDA CA % ! ' #$ / REVENUE BY DR JAYANT B JHAVERI DR # & ' ! ( / DATE OF HEARING 03.10.2013 ) ! ( / DATE OF PRONOUNCEMENT 25.10.2013 / ORDER .. / T. K. SHARMA J. M. : THESE CROSS APPEALS ARE AGAINST TWO SEPARATE ORDERS OF CIT(A)-IV RAJKOT B OTH DATED 30.03.2012 FOR THE ASSESSMENT YEAR 2006-07 AND 2007-08 RESPECTIVELY. A LL THESE FOUR APPEALS WERE HEARD ON THE SAME DATE ARGUED BY COMMON REPRESENTA TIVE; THEREFORE THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 29.12.2008 DECLARING INCOME AT RS.1 02 18 470/- AND NET AGRICULTURAL INC OME OF RS.5 22 81 449/-. THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 144 OF THE INCOME-TAX ACT ON 01.12.2008 WHEREIN HE TREATED THE AGRICULTURAL INC OME OF RS.5 00 00 000/- AS INCOME FROM UNDISCLOSED SOURCES. ON APPEAL IN THE IMPUGNED ORDER THE LD CIT(A) CONFIRMED THE AGRICULTURAL INCOME TO THE EXT ENT OF RS.4 03 92 000/- BY ESTIMATING AVERAGE PRICE OF TEAK WOOD AT RS.310/- P ER CFT. AGGRIEVED WITH THE 203 & 204 372 & 373-RJT-2012 SHRI PETHALJIBHAI NATHABHAI CHAVDA 2 ORDER PASSED BY THE LD CIT(A) BOTH THE SIDES I.E. ASSESSEE & REVENUE ARE IN APPEAL BEFORE THIS TRIBUNAL. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITS APPEAL FOR THE ASSESSMENT YEAR 2006-07 ARE AS UNDER :- 1. THE ASSESSMENT ORDER IS BAD IN LAW. 2. THE LD. A.O. HAS ERRED IN LAW AS WELL AS ON FACT S IN TREATING THE AGRICULTURAL INCOME OF RS.5 00 00 000/- AS INCOME F ROM UNDISCLOSED SOURCES. THE LD. CIT(A) HAS ERRED IN CONFIRMING RS. 4 03 92 000/- DISBELIEVING THE APPELLANT/S AGRICULTURAL INCOME OF THAT EXTENT. 3. THE LD CIT(A) HAS ERRED IN LAW AS WELL AS ON FAC TS IN ESTIMATING AVERAGE PRICE OF TEAK WOOD AT RS.310 PER CFT. 4. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN REJECTING THE COMPARABLE SALE INSTANCES PROVIDED BY THE APPELLANT . 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN I TS APPEAL FOR THE ASSESSMENT YEAR 2006-07 ARE AS UNDER:- 1. THE LD. CIT(A) RAJKOT HAS ERRED IN LAW AND ON FACTS IN DELETING AN ADDITION OF RS.96 08 000/- OUT OF THE TOTAL ADDITIO N OF RS.5 00 00 000/- MADE BY THE AO ON ACCOUNT OF INCOME FROM UNDISCLOSE D SOURCES WHICH WAS CLAIMED BY THE ASSESSEE AS AGRICULTURAL INCOME WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORDS BY THE AO. 2. THE LD. CIT(A) RAJKOT HAS ERRED IN LAW AND ON F ACTS IN DELETING AN ADDITION OF RS.10 00 000/- MADE BY THE AO AS INCOME FROM MINING BUSINESS WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORDS BY THE AO. 3. THE LD. CIT(A) RAJKOT HAS ERRED IN LAW AND ON F ACTS IN DELETING AN ADDITION OF RS.47 480/- MADE BY THE AO BEING DISALL OWANCE OUT OF DEPRECIATION WITHOUT APPRECIATING THE FACTS BROUGH T ON RECORDS BY THE AO. 4. THE LD. CIT(A) RAJKOT HAS ERRED IN LAW AND ON F ACTS IN DELETING AN ADDITION OF RS.7 40 487/- MADE BY THE AO BEING DISA LLOWANCE OUT OF INTEREST EXPENSES CLAIMED BY THE ASSESSEE WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORDS BY THE AO. 5. ON THE FACTS OF THE CASE AND IN LAW THE LD. CIT( A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 6. ANY OTHER GROUND THAT THE REVENUE MAY RAISE BEFO RE OR DURING HEARING PROCEEDINGS BEFORE THE HONBLE ITAT. 7. IT IS THEREFORE PRAYED THAT THE ORDER OF THE C IT(A)-IV RAJKOT MAY KINDLY BE SET-ASIDE AND THAT OF ASSESSING OFFICER B E RESTORED. 4. THE FACTS FOR THE ASSESSMENT YEAR 2007-08 ARE ID ENTICAL THAT OF ASSESSMENT YEAR 2006-07. IN THE ASSESSMENT YEAR 200 7-08 THE ASSESSEE FILED RETURN OF INCOME ON 26.10.2007 DECLARING TAXABLE IN COME AT RS.1 65 43 937/- AND NET AGRICULTURAL INCOME AT RS.3 59 42 004/-. IN THE ASSESSMENT FRAMED U/S 143(3) OF THE INCOME-TAX ACT ON 29.12.2009 THE ASSESSING OFFICER TREATED THE ENTIRE 203 & 204 372 & 373-RJT-2012 SHRI PETHALJIBHAI NATHABHAI CHAVDA 3 AGRICULTURAL INCOME OF RS.3 59 42 004/- AS INCOME F ROM UNDISCLOSED SOURCES. ON APPEAL IN THE IMPUGNED ORDER DATED 30.03.2012 THE LD CIT(A) CONFIRMED THE ADDITION OF RS.61 10 897/- BY ESTIMATING THE AVERAG E PRICE OF TEAK WOOD AT RS.310 PER CFT. AGGRIEVED BY THE ORDER PASSED BY T HE LD CIT(A) FOR THE ASSESSMENT YEAR 2007-08 ALSO BOTH THE SIDES I.E. A SSESSEE & REVENUE ARE IN APPEAL BEFORE THIS TRIBUNAL. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 ARE AS UNDER:- 1. THE ASSESSMENT ORDER IS BAD IN LAW. 2. THE LD. A.O. HAS ERRED IN LAW AS WELL AS ON FACT S IN TREATING THE AGRICULTURAL INCOME OF RS.3 34 42 004/- AS INCOME F ROM UNDISCLOSED SOURCES. THE LD. CIT(A) HAS ERRED IN CONFIRMING RS. 61 10 897/- DISBELIEVING THE APPELLANT/S AGRICULTURAL INCOME OF THAT EXTENT. 3. THE LD CIT(A) HAS ERRED IN LAW AS WELL AS ON FAC TS IN ESTIMATING AVERAGE PRICE OF TEAK WOOD AT RS.310 PER CFT. 4. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN REJECTING THE COMPARABLE SALE INSTANCES PROVIDED BY THE APPELLANT . 5. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN I TS APPEAL FOR THE ASSESSMENT YEAR 2007-08 ARE AS UNDER:- 1. THE LD. CIT(A) RAJKOT HAS ERRED IN LAW AND ON FACTS IN DELETING AN ADDITION OF RS.2 73 31 107/- OUT OF THE TOTAL ADDIT ION OF RS.3 34 42 004/- MADE BY THE AO ON ACCOUNT OF INCOME FROM UNDISCLOSE D SOURCES WHICH WAS CLAIMED BY THE ASSESSEE AS AGRICULTURAL INCOME WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORDS BY THE AO. 2. THE LD. CIT(A) RAJKOT HAS ERRED IN LAW AND ON F ACTS IN DELETING AN ADDITION OF RS.10 00 000/- MADE BY THE AO AS INCOME FROM MINING BUSINESS WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORDS BY THE AO. 3. THE LD. CIT(A) RAJKOT HAS ERRED IN LAW AND ON F ACTS IN DELETING AN ADDITION OF RS.35 870/- MADE BY THE AO BEING DISALL OWANCE OUT OF DEPRECIATION WITHOUT APPRECIATING THE FACTS BROUGH T ON RECORDS BY THE AO. 4. ON THE FACTS OF THE CASE AND IN LAW THE LD. CIT( A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 5. ANY OTHER GROUND THAT THE REVENUE MAY RAISE BEFO RE OR DURING HEARING PROCEEDINGS BEFORE THE HONBLE ITAT. 6. IT IS THEREFORE PRAYED THAT THE ORDER OF THE C IT(A)-IV RAJKOT MAY KINDLY BE SET-ASIDE AND THAT OF ASSESSING OFFICER B E RESTORED. 6. SUBSEQUENTLY THE DEPARTMENT FILED SUPPLEMENTARY GROUNDS OF APPEAL VIDE LETTER NOS.JND/D.C.I.T..CIR-1/APPEAL/I.T.A.T/2012-1 3-3621 & 3352 WHICH CONTAINED AN ANNEXURE OF 8 PAGES WHICH ALSO INCLUD ES THE SUMMARY OF THE SAME PROVIDED AT THE END OF THE APPLICATION WHICH READS AS UNDER:- 203 & 204 372 & 373-RJT-2012 SHRI PETHALJIBHAI NATHABHAI CHAVDA 4 THE HONBLE ITAT MAY KINDLY APPRECIATE THE FOLLOW ING: I. THAT IT IS ONLY THE OWNER LANDLORD OR RYOT OR P ERSONS HAVING A DERIVATIVE INTEREST IN THE LAND THAT CAN BE SAID TO DERIVE INCOME FROM THE LAND BY THE PERFORMANCE OF AGRICULTURAL OPERATI ONS ON IT AS HELD BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF MAD DI VENKATASUBBAYA 20 ITR 151 (MAD.) II. THAT THE ASSESSEE IF HE IS NOT THE OWNER CAN BE COME A TENANT ONLY WHEN HE COMPLIES WITH THE PROVISIONS OF THE BOMBAY TENANCY AND AGRICULTURAL LANDS ACT 1948 IN TOTO. III. THAT THE ASSESSEE IS NOT A TENANT AS HE HAS NO T COMPLIED AND SATISFIED THE PROVISIONS OF THE BOMBAY TENANCY & AG RICULTURAL LANDS ACT 1948. IV. THAT THE ASSESSEE HAS ONLY A POWER OF ATTORNEY OVER THE AGRICULTURAL LANDS OWNED BY OTHERS AND THE POWER OF ATTORNEY ONLY AUTHORIZES THE ASSESSEE BY HIS PRINCIPALS TO WORK U NDER THEIR CONTROL AND ON THEIR BEHALF. V. THAT THE POWER OF ATTORNEY UNDER ANY CIRCUMSTANC ES CANNOT TRANSFER THE RIGHT TO ENJOY THE PROPERTY TO THE POWER OF ATT ORNEY HOLDER. VI. THAT THE ASSESSEE CANNOT USE ONE ARM OF THE LAW TO DEFEAT THE OTHER ARM OF LAW AS HELD BY THE HONBLE SUPREME COU RT IN 217 ITR 746 (SC) 234 ITR 472 (SC) & 256 ITR 117 (SC). 286 ITR 403 (KAR.) 229 ITR 534 (SC) 241 ITR 62 (MAD.). VII. THAT THE ASSESSEE CANNOT UNJUSTLY ENRICH HIMSE LF CONTRARY TO THE DOCTRINE OF UNJUST ENRICHMENT AS HELD BY THE HONBL E SUPREME COURT IN 259 ITR 705 (SC). VIII. THAT THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME DOES NOT BELONG TO HIM AS HE IS NOT THE O WNER OR TENANT OF THE AGRICULTURAL LANDS FROM WHICH THE AGRICULTUR AL IS STATED TO HAVE BEEN DERIVED BY HIM. THE ABOVE SUPPLEMENTARY GROUNDS OF APPEAL MAY KINDL Y BE TAKEN INTO CONSIDERATION WHILE DECIDING THE APPEAL FILED BY TH E DEPARTMENT FOR A.Y. 2007-08. 7. AT THE TIME OF HEARING BEFORE US ON BEHALF OF T HE ASSESSEE SHRI M P SHARDA CA APPEARED AND POINTED OUT THAT THE ADOPTI ON OF AVERAGE PRICE OF TEAK WOOD AT RS.310 PER CFT ADOPTED BY THE LD CIT(A) IS NOT SUPPORTED BY ANY AUTHENTIC MATERIAL. SUBSEQUENTLY ON APPLICATION U NDER THE RIGHT TO INFORMATION ACT THE ASSESSEE OBTAINED PRICE OF TEAK WOOD SALES FROM FOREST DEPARTMENT. UNDER RIGHT TO INFORMATION ACT THE MENDARDA RANGE OF FOREST DEPARTMENT GAVE PRICES WHEREIN THE RATE PER CFT WAS AS HIGH AS RS.1 106/-. NOW BEFORE THE TRIBUNAL THE ASSESSEE HAS FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WHICH IS AVAILABLE ON RECORD. IT WAS SUBMI TTED THAT THESE DETAILS COULD NOT BE FURNISHED BEFORE THE ASSESSING OFFICER/LD CI T(A) AS THESE WERE NOT AVAILABLE AT THE RELEVANT TIME. THE LD COUNSEL OF T HE ASSESSEE ALSO SUBMITTED THAT 203 & 204 372 & 373-RJT-2012 SHRI PETHALJIBHAI NATHABHAI CHAVDA 5 IN THE SUPPLEMENTARY GROUNDS THE ASSESSING OFFICER RAISED ADDITIONAL GROUNDS WHICH IS COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF ITAT RAJKOT BENCH DATED 06.08.1998 IN ASSESSEES OWN CASE IN APPEAL N OS. 2589 & 2590/AHD/1990 AND 4814 4815 & 4816/AHD/1991 FOR ASSESSMENT YEARS 1984-85 TO 1988-89 AND A REFERENCE APPLICATION OF THE DEPARTMENT AGAINST T HE SAID ORDER OF ITAT RAJKOT BENCH IS DISMISSED IN INCOME-TAX APPLICATION NO.394 OF 1999 WITH INCOME TAX APPLICATION NOS.395 TO 398 OF 1999. DESPITE OF THI S THE LD COUNSEL OF THE ASSESSEE POINTED OUT THAT HE HAS NO OBJECTION IF AD DITIONAL/SUPPLEMENTARY GROUNDS NOW RAISED BY THE DEPARTMENT BEFORE THIS TR IBUNAL BE ADMITTED AND ENTIRE MATTER BE RESTORED EITHER TO THE FILE OF ASS ESSING OFFICER OR LD CIT(A) FOR RE- ADJUDICATING THE CONTROVERSY INVOLVED IN ALL THE FO UR APPEALS AFRESH KEEPING IN VIEW OF THE ADDITIONAL EVIDENCES NOW PLACED BEFORE THIS TRIBUNAL. 8. DR. JAYANT B. JHAVERI DR APPEARED FOR THE REVEN UE RELYING ON THE SUPPLEMENTARY GROUNDS CONTENDED THAT ONLY THE OWNE R LANDLORD OR RYOT OR PERSONS HAVING A DERIVATIVE INTEREST IN THE LAND TH AT CAN BE SAID TO DERIVE INCOME FROM THE LAND BY THE PERFORMANCE OF AGRICULTURAL OP ERATIONS ON ITS AS HELD BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF MADDI VENK ATASUBBAYA 20 ITR 151 (MAD.). HE FURTHER SUBMITTED THAT THE ASSESSEE CAN BECOME A TENANT ONLY WHEN HE COMPLIES WITH THE PROVISIONS OF THE BOMBAY TENAN CY AND AGRICULTURAL LANDS ACT. SINCE THE PRESENT ASSESSEE HAS NOT COMPLIED AN D SATISFIED THE PROVISIONS OF BOMBAY TENANCY AND AGRICULTURAL LANDS ACT 1948 AS HE HAS ONLY A POWER OF ATTORNEY OVER THE AGRICULTURAL LANDS OWNED BY OTHER S AND THE POWER OF ATTORNEY ONLY AUTHORIZES THE ASSESSEE BY HIS PRINCIPALS TO W ORK UNDER THEIR CONTROL AND ON THEIR BEHALF; IT CANNOT BE SAID THAT THE ASSESSEE I S HAVING A DERIVATIVE INTEREST IN THE AGRICULTURAL LAND IN QUESTION. HE FURTHER SUBMI TTED THAT THE ASSESSEE CANNOT USE ONE ARM OF THE LAW TO DEFEAT THE OTHER ARM OF L AW AS HELD BY THE HONBLE SUPREME COURT IN 217 ITR 746 (SC) 234 ITR 472 (SC) 256 ITR 117 (SC) 286 ITR 403 (KAR.) 229 ITR 534 (SC) 241 ITR 62 (MAD.) . WITH REGARD TO THE ADMISSION OF ADDITIONAL EVIDENCES THE LD DEPARTMEN TAL REPRESENTATIVE POINTED OUT THAT NO USEFUL PURPOSE WILL BE SERVED BY ADMITT ING THE ADDITIONAL EVIDENCES PROVIDED BY THE ASSESSEE BECAUSE AS PER THE PLEA RA ISED IN THE ADDITIONAL GROUNDS THE ASSESSEE IS NOT THE OWNER LANDLORD OR RYOT OR PERSONS HAVING A 203 & 204 372 & 373-RJT-2012 SHRI PETHALJIBHAI NATHABHAI CHAVDA 6 DERIVATIVE INTEREST IN THE LAND THEREFORE IT CANNO T BE SAID THAT HE HAS PERFORMED AGRICULTURAL OPERATION ON THE SAID LAND AS HELD BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF MADDI VENKATASUBBAYA 20 ITR 151 (MA D.). 9. RIVAL SUBMISSIONS WERE CONSIDERED. THE ADDITIONA L/SUPPLEMENTARY GROUNDS NOW RAISED BY THE DEPARTMENT FOR THE FIRST TIME BEFORE US INVOLVE PURE QUESTION OF LAW THEREFORE THE SAME ARE ADMITTED. T HE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. TOLLA RAM HASSOMA L 298 ITR 22 (MP) HELD THAT WHEN ADDITIONAL GROUNDS RAISED FIRST TIME BEFORE TH E TRIBUNAL MATTER SHOULD GO BACK TO THE LD CIT(A). WE THEREFORE IN THE INTERE ST OF JUSTICE SET ASIDE THE ORDERS OF LD CIT(A) FOR BOTH THE ASSESSMENT YEARS AND DIRE CT HIM TO RE-DECIDE BOTH THE APPEALS OF THE ASSESSEE AFRESH INCLUDING THE PLEA R AISED BY THE DEPARTMENT IN THE ADDITIONAL/SUPPLEMENTARY GROUNDS BEFORE US. WE ALSO DIRECT THE ASSESSEE TO FURNISH ALL THE ADDITIONAL EVIDENCES WHICH THE ASSE SSEE OBTAINED UNDER RIGHT TO INFORMATION ACT FROM FOREST DEPARTMENT BEFORE THE L D CIT(A) WHO WILL CONSIDER THE SAME WHILE DECIDING BOTH THE APPEALS OF THE ASS ESSEE AFRESH IN ACCORDANCE WITH THE LAW. 10. IN THE RESULT ALL THE FOUR APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- ( *.$. % D. K. SRIVASTAVA ) ( .$. -. / T. K. SHARMA) $( #/% / ACCOUNTANT MEMBER #/% /JUDICIAL MEMBER /$- 0/1/ ORDER DATE 25.10.2013 /RAJKOT *BT !'# $%'& / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHRI PETHALJIBHAI NATHABHAI CHAVDA D R. SUBHASH BHAVAN KHAM DHROL ROAD JUNAGADH 2. / RESPONDENT- THEDCIT JUNAGADH CIRCLE-1 JUNAGADH 3. #141 & 5 / CONCERNED CIT-III RAJKOT 4. & 5 - / CIT(A)-IV RAJKOT 5. 9:; / DR ITAT RAJKOT 6. ;* => / GUARD FILE. /$- #$ / BY ORDER TRUE COPY PRIVATE SECRETARY ITAT RAJKOT