DCIT, Ernakulam v. R.Vijayakumar, Cochin

ITA 409/COCH/2011 | 2008-2009
Pronouncement Date: 25-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 40921914 RSA 2011
Assessee PAN AESPK7782F
Bench Cochin
Appeal Number ITA 409/COCH/2011
Duration Of Justice 2 year(s) 5 month(s) 2 day(s)
Appellant DCIT, Ernakulam
Respondent R.Vijayakumar, Cochin
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 25-10-2013
Date Of Final Hearing 11-09-2013
Next Hearing Date 11-09-2013
Assessment Year 2008-2009
Appeal Filed On 23-05-2011
Judgment Text
1 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 405 TO 409/COCH/2011 (ASSESSMENT YEARS 2004-05 TO 2008-09) DY.CIT CENT.CIR.2 VS R VIJAYAKUMAR ERNAKULAM VIII/1766 JAWAHAR ROAD KOOVAPPADAM JUNCTION KOCHI-2 PAN : AESPK7782F (APPELLANT) (RESPONDENT) C.O. NO. 29 TO 33/COCH/2011 (ARISING OUT OF I.T.A NO. 405 TO 409/COCH/2011) (ASSESSMENT YEARS 2004-05 TO 2008-09) R VIJAYAKUMAR VS DY.CIT CENT.CIR.2 KOOVAPPADAM JN KOCHI ERNAKULAM (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI NITYANANDA KAMATH DATE OF HEARING : 11-09-2013 DATE OF PRONOUNCEMENT : 25-10-2013 O R D E R PER N.R.S. GANESAN (JM) THE DEPARTMENT HAS FILED THE APPEALS AGAINST THE C OMMON ORDER PASSED BY THE CIT(A)-III KOCHI DATED 31-01-2011 FO R THE ASSESSMENT 2 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 YEARS 2004-05 TO 2008-09. THE ASSESSEE HAS FILED C ROSS OBJECTIONS AGAINST THE VERY SAME ORDER OF CIT(A). THEREFORE WE HEARD ALL THE APPEALS AND THE CROSS OBJECTIONS TOGETHER AND DISPO SE OF THE SAME BY THIS COMMON ORDER. 2. SMT. S VIJAYAPRABHA THE LD.DR SUBMITTED THAT TH ERE WAS A SEARCH IN THE RESIDENTIAL PREMISES OF THE ASSESSEE AT MATTANC HERRY AND COIMBATORE ON 22-08-2007. SIMULTANEOUS RAIDS WERE ALSO CONDUC TED AT THE RESIDENTIAL PREMISES OF ONE SHRI K.T. JOSEPH. SURVEY U/S 133A WAS ALSO CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE. ACCORDING T O THE LD.DR DURING THE COURSE OF SEARCH OPERATION THE DEPARTMENT UNEARTHE D SUBSTANTIAL INVESTMENT MADE BY THE ASSESSEE IN THE IMMOVABLE PR OPERTIES MAINLY IN THE AGRICULTURAL LAND DURING THE PERIOD 01-04-2002 TO 31-03-2008. THE MAJOR INVESTMENT WAS MADE DURING THE PERIOD 2002-03 TO 2006-07. THE LD.DR FURTHER SUBMITTED THAT THE ASSESSEE HAS ALSO PURCHASED TWO RESIDENTIAL BUILDINGS AT MATTANCHERY DURING 2003-04 . THE DEPARTMENT FOUND THAT THE INVESTMENTS MADE IN THE IMMOVABLE PR OPERTIES ARE FROM UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE C LAIMED BEFORE THE ASSESSING OFFICER THAT THE INCOME WAS EARNED FROM A GRICULTURAL OPERATION. THE ASSESSEE CLAIMED THAT HE CULTIVATED HIS OWN LAN D AND ALSO ON THE LAND TAKEN ON LEASE. THE ASSESSING OFFICER AFTER CONSI DERING THE AREA OF THE 3 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 LAND AND THE CULTIVATION OF COCONUT AND BANANA HAS ESTIMATED THE INCOME AFTER ALLOWING 80% OF THE EXPENDITURE FOR BANANA CU LTIVATION AND 60% OF THE EXPENDITURE FOR COCONUT TREES IN RESPECT OF LAN D BELONGING TO THE ASSESSEE. IN RESPECT OF THE LEASEHOLD LAND THE AS SESSING OFFICER DISALLOWED THE ENTIRE CLAIM OF THE ASSESSEE. IN OT HER WORDS THE PROFIT / INCOME WAS ESTIMATED AT 20% ON BANANA CULTIVATION A ND 40% ON COCONUT CULTIVATION ON THE LANDS OWNED BY THE ASSESSEE. 3. ACCORDING TO THE LD.REPRESENTATIVE THE ASSESEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE LAND WAS TAKEN ON LEASE FROM ONE NANJAN OF SIRUMUGAI VILLAGE. THE ADDITIONAL DIRECTOR OF INCO ME-TAX (INVESTIGATION) EXAMINED SHRI NANJAN WHO STATED THAT HE HAS NOT GI VEN ANY LAND TO THE ASSESSEE ON LEASE. ON FURTHER EXAMINATION THE ASS ESSING OFFICER FOUND THAT THE LAND WHICH WAS CLAIMED TO BE USED FOR CULT IVATION IS ON THE BANKS OF BHAVANI RIVER WHICH WAS CLASSIFIED AS PORAMPOKE . ACCORDING TO THE LD.DR THE DEPARTMENT ALSO CAME TO KNOW THAT THE SA ID LAND WAS UNDER THE CONTROL OF PUBLIC WORKS DEPARTMENT (WATER RESOURCES ORGANIZATION) OF GOVERNMENT OF TAMIL NADU. REFERRING TO THE ORDER O F THE CIT(A) THE LD.DR POINTED OUT THAT THE CIT(A) ON THE BASIS OF THE EXT RACTS OF VILLAGE RECORDS (ADANGAL) CAME TO THE CONCLUSION THAT 50% OF THE LA ND WAS AVAILABLE FOR CULTIVATION. FOR THE ASSESSMENT YEAR 2004-05 THE CIT(A) CAME TO THE 4 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 CONCLUSION THAT THE LANDS ON THE BANKS OF BHAVANI R IVER TO THE EXTENT 37.5 ACRES WERE CULTIVATED. THE CIT(A) ESTIMATED THE EX PENDITURE AT 30% IN RESPECT OF THE COCONUT AND 60% FOR BANANA CULTIVATI ON. ACCORDINGLY THE CIT(A) MODIFIED THE ORDER OF THE ASSESSING OFFICER. 4. THE MAIN CONTENTION OF THE LD.DR IS THAT SHRI NA NJAN FROM WHOM THE ASSESSEE CLAIMS TO HAVE TAKEN THE AGRICULTURAL LAND ON LEASE IS NON- EXISTENT PERSON. ONLY ONE PERSON IN THE NAME OF NA NJAN WAS AVAILABLE IN THE VILLAGE AND HE WAS EXAMINED BY THE ADDITIONAL D IRECTOR OF INCOME-TAX (INVESTIGATION). HE CLAIMED THAT HE OWNED ONLY 0.7 5 ACRE OF LAND AND HE HAS NOT EXECUTED ANY AGREEMENT WITH THE ASSESSEE. TAHSILDAR OF METTUPALAYAM TALUK HAS ALSO INFORMED THAT THE LAND WHICH WAS SAID TO BE CULTIVATED BY THE ASSESSEE WAS REGISTERED AS BHAVAN I RIVER PORAMPOKE AND WAS UNDER THE CONTROL OF PUBLIC WORKS DEPARTMEN T (WATER RESOURCES ORGANIZATION) OF GOVERNMENT OF TAMIL NADU. MOREOVE R THE EXTRACT OF ADANGAL REGISTER SAID TO BE FILED BY THE ASSESSEE B EFORE THE CIT(A) WAS NOT AVAILABLE BEFORE THE ASSESSING OFFICER. THEREF ORE THE EXTRACT OF ADANGAL REGISTER IS AN ADDITIONAL DOCUMENT FILED BY THE ASSESSEE BEFORE THE CIT(A). ON A QUERY FROM THE BENCH WHEN THE AS SESSING OFFICER REFERS TO THE EXTRACT OF ADANGAL REGISTER ON PARAGRAPH 3 O N PAGE 6 OF HIS ORDER HOW THIS COULD BE AN ADDITIONAL EVIDENCE BEFORE THE CIT(A) THE LD.DR 5 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 SUBMITTED THAT THE EXTRACT OF ADANGAL REGISTER WHIC H WAS REFERRED TO AT PARAGRAPH 3 ON PAGE 6 OF THE ASSESSMENT ORDER IS NO T AVAILABLE ON FILE. THEREFORE IT HAS TO BE CONSIDERED AS ADDITIONAL EV IDENCE. 5. THE LD.DR FURTHER POINTED OUT THAT THE CIT(A) CO MMITTED AN ERROR IN ESTIMATING THE EXPENDITURE IN RESPECT OF COCONUT AN D BANANA CULTIVATION. ACCORDING TO THE LD.DR THE ASSESSING OFFICER HAS R IGHTLY ESTIMATED THE INCOME AT 20% IN RESPECT OF BANANA CULTIVATION AND 40% IN RESPECT OF COCONUT CULTIVATION. THEREFORE THE CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE MADE BY THE SSESING OFFICER. 6. ON THE CONTRARY SHRI NITYANANADA KAMATH THE LD .REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS CULTIVA TING HIS OWN LAND AS ALSO THE LAND TAKEN ON LEASE. THE ASSESSEE CULTIVA TED COCONUT TREES IN HIS OWN LAND AND CULTIVATED BANANA AS INTER CROP. THIS FACT IS ADMITTED AND IN RESPECT OF OWN LAND THE DISPUTE IS ONLY WITH REGAR D TO THE EXPENDITURE FOR EARNING THE AGRICULTURAL INCOME. THE MAIN DISPUTE ACCORDING TO THE LD.REPRESENTATIVE IS IN RESPECT OF LAND TAKEN ON L EASE. THE ASSESSING OFFICER HAS DISALLOWED THE ENTIRE CLAIM OF THE ASSE SSEE ON THE GROUND THAT NANJAN WAS NOT AN EXISTENT PERSON. ONE NANJAN WHO WAS AVAILABLE IN THE VILLAGE IS SAID TO HAVE DENIED THE EXECUTION OF THE SO-CALLED LEASE 6 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 AGREEMENT. ACCORDING TO THE LD.REPRESENTATIVE THE LAND WAS SITUATED IN SURVEY NO.2091A AT SIRUMUGAI VILLAGE METTUPALAYAM TALUK COIMBATORE DISTRICT IN THE STATE OF TAMIL NADU. THE LAND WAS ADMITTEDLY CLASSIFIED AS PORAMPOKE IN THE REVENUE RECORDS OF THE STATE GOVER NMENT. THE ASSESSEE THROUGH MIDDLEMAN HAS TAKEN THE LAND ON L EASE. THE LEASE DEED WAS ARRANGED THROUGH THE MIDDLEMAN. THE ASSES SEE HAS ALSO PAID RS.25 000 AS CONSIDERATION FOR THE LEASE AGREEMENT. ACCORDING TO THE LD.REPRESENTATIVE THE FACT THAT THE ASSESSEE CULTI VATED THE LAND IS SUBSTANTIATED BY THE RELEVANT ENTRIES FOUND IN THE ADANGAL EXTRACT OF THE STATE REVENUE DEPARTMENT. IN FACT THE CERTIFIED C OPY OF THE ADANGAL REGISTER OBTAINED FROM SIRUMUGAI VILLAGE ADMINISTRA TIVE OFFICER WAS FILED BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE THE CL AIM OF CULTIVATION. ONLY ON THE BASIS OF THE CERTIFIED COPY GRANTED BY THE V ILLAGE ADMINISTRATIVE OFFICER OF SIRUMUGAI VILLAGE THE ASSESSING OFFICER AT PARA 3 ON PAGE 6 REFERRED THE ADANGAL REGISTER IN RESPECT OF 40 HECT ARES OF LAND. 7. DURING THE APPELLATE PROCEEDINGS BEFORE CIT(A) THE ASSESSEE OBTAINED A CERTIFIED COPY OF THE VERY SAME ADANGAL REGISTER WHICH WAS FILED BEFORE THE ASSESSING OFFICER FROM THE TAHSILD AR AND THAT WAS FILED BEFORE THE CIT(A). THEREFORE ACCORDING TO THE LD. REPRESENTATIVE WHAT WAS FILED BEFORE THE CIT(A) WAS THE SAME ADANGAL REGIST ER AS THE ONE WHICH 7 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 WAS FILED BEFORE THE ASSESSING OFFICER. THE EXTRAC T OF ADANGAL REGISTER FILED BEFORE THE ASSESSING OFFICER WAS CERTIFIED BY THE VILLAGE ADMINISTRATIVE OFFICER WHEREAS THE ADANGAL REGISTER WHICH WAS FILE D BEFORE THE CIT(A) WAS CERTIFIED BY THE TAHSILDAR. THE CONTENTS OF TH E DOCUMENT AND THE NATURE OF THE DOCUMENT ARE ONE AND THE SAME. ONLY THE CERTIFYING OFFICER IS DIFFERENT. THEREFORE IT CANNOT BE CONSTRUED AS AD DITIONAL EVIDENCE FILED BEFORE THE CIT(A). 8. ACCORDING TO THE LD.REPRESENTATIVE THE ASSESSEE IS AN AGRICULTURIST APART FROM DOING BUSINESS. THEREFORE HE CAME TO K NOW FROM ONE OF THE BANANA VENDORS THAT LANDS WERE AVAILABLE AT BHAVANI RIVER BASIN AT SIRUMUGAI VILLAGE. THROUGH MIDDLEMAN / BROKER THE ASSESSEE OBTAINED THE LEASE DEED AFTER PAYING RS.25 000. THEREAFTER THE ASSESSEE TOOK PHYSICAL POSSESSION OF THE PROPERTY AND CARRIED OUT BANANA CULTIVATION. THE ASSESSEE DID NOT HAVE ANY PROBLEM EITHER FROM T HE LOCAL VILLAGERS OR FROM THE GOVERNMENT OFFICIALS THROUGH OUT THE PERIO D OF CULTIVATION OF THE LAND. THE LOCAL STATE REVENUE OFFICERS WERE FULLY AWARE THAT THE CULTIVATION WAS BEING CARRIED OUT BY THE ASSESSEE. AT THE TIME OF ENTERING INTO THE AGREEMENT AND TAKING POSSESSION OF THE PRO PERTY THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT THE LAND BELONG ED TO NANJAN AND ONE SUBRAMONY. HOWEVER SUBSEQUENTLY THE ASSESEE CAME TO KNOW THAT THE 8 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 LAND WAS PORAMBOKE LAND AND HE WAS CHEATED TO THE E XTENT OF RS.25 000 BY MISREPRESENTATION. HOWEVER ACCORDING TO THE LD .REPRESENTATIVE THE ASSESSEE WAS IN PHYSICAL POSSESSION OF THE PROPERTY AND IN FACT HE CULTIVATED ABOUT 75 ACRES OF LAND WHICH IS EVIDENCE D BY THE ADANGAL EXTRACTS MAINTAINED BY THE STATE REVENUE AUTHORITIE S IN THE REGULAR COURSE OF STATUTORY FUNCTIONING. THEREFORE THIS ADANGAL EXTRACT CANNOT BE IGNORED EVEN IF IT IS FOUND THAT THE LEASE DEED WAS NOT OBT AINED FROM NANJAN. 9. REFERRING TO THE ADANGAL EXTRACT THE COPY OF WH ICH IS AVAILABLE AT PAGES 38 & 39 THE TRANSLATION OF ADANGAL EXTRACT I N ENGLISH ARE AVAILABLE ON PAGES 40 41 & 42 OF THE PAPER BOOK THE LD.REPR ESENTATIVE SUBMITTED THAT THERE IS A REFERENCE ABOUT SUBRAMANI NANJAN RAVICHANDRA IN THE ADANGAL REGISTER AND THE NAME OF THE PRESENT ASSESS EE WAS ALSO MENTIONED AS CULTIVATOR. WHEN THE ASSESEES NAME I S SHOWN AS CULTIVATOR IN THE ADANGAL REGISTER WHICH WAS MAINTAINED IN THE OFFICIAL RECORDS OF THE REVENUE DEPARTMENT ACCORDING TO THE LD.REPRESENTAT IVE THIS PIECE OF EVIDENCE CANNOT BE IGNORED BY THE INCOME-TAX AUTHOR ITY. WHEN THE CULTIVATION OF LAND BY ASSESSEE WAS SUBSTANTIATED B Y AN OFFICIAL DOCUMENT VIZ. EXTRACT OF THE ADANGAL REGISTER MERELY BECAUS E MR. NANJAN DENIED THE FACTUM OF EXECUTION OF THE AGREEMENT WILL NOT I N ANY WAY TO DISPROVE THE FACTUM OF CULTIVATION BY THE ASSESSEE. EVEN IF THERE IS NO AGREEMENT 9 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 FOR LEASE THIS STATUTORY DOCUMENT VIZ. ADANGAL EX TRACT PROVES THAT THE ASSESSEE WAS CULTIVATING THE LAND DURING THE RELEVA NT PERIOD. ACCORDING TO THE LD.REPRESENTATIVE THE TOTAL AREA OF THE LAND C ULTIVATED IN BHAVANI RIVER BASIN IS ABOUT 40 HECTARES WHICH IS EQUIVALENT TO 7 5 ACRES. THEREFORE THE ASSESSING OFFICER IS NOT JUSTIFIED IN REJECTING THE ENTIRE CLAIM OF THE ASSESSEE. THE CIT(A) ACCORDING TO THE LD.REPRESEN TATIVE IS ALSO NOT JUSTIFIED IN RESTRICTING THE CLAIM ONLY TO THE EXTE NT OF 50% OF THE LAND. ACCORDING TO THE LD.REPRESENTATIVE THE EXPENDITURE FOR COCONUT CROP AND BANANA CROP ESTIMATED BY BOTH THE AUTHORITIES BELOW IS VERY HIGH. ACCORDING TO THE LD.REPRESENTATIVE THE EXPENDITURE FOR EARNING THE AGRICULTURAL INCOME HAS TO BE CONSIDERED AFTER TAKI NG INTO CONSIDERATION THE LOCALITY WHERE THE LAND WAS SITUATED. IN THE STATE OF TAMIL NADU THE SALARY TO AGRICULTURAL COOLIES IS VERY LOW COMPARED TO TH E STATE OF KERALA. THEREFORE THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN NOT ACCEPTING THE CLAIM OF THE ASSESSEE FOR EXPENDITURE. THE LD.REPRESENTA TIVE FURTHER SUBMITTED THAT THE INCOME ESTIMATED BY THE CIT(A) IS VERY LOW ON THE CULTIVATION OF COCONUT AND BANANA. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT HE WAS CULTIVATING ABOUT 27 ACRES OF LAND OWNED 10 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 BY HIM. IN THE LAND OWNED BY HIM THE ASSESSEE CUL TIVATED COCONUT AND BANANA AS AN INTER-CROP. APART FROM THIS LAND OWNE D BY THE ASSESSEE THE ASSESSEE ALSO CLAIMED BEFORE THE ASSESSING OFFICER THAT HE TOOK 75 ACRES OF LAND IN SIRUMUGAI VILLAGE ON THE BANKS OF BHAVAN I RIVER. IN THOSE 75 ACRES OF LAND THE ASSESSEE CLAIMS THAT HE CULTIVAT ED BANANA PLAINTAIN. THOUGH THE ASSESSING OFFICER ACCEPTED THE CLAIM OF THE ASSESSEE WITH REGARD TO THE CULTIVATION IN THE OWN LAND THE ASSE SSING OFFICER DISALLOWED THE ENTIRE CLAIM WITH REGARD TO CULTIVATION OF LEAS EHOLD LAND. IN RESPECT OF THE LAND OWNED BY THE ASSESSEE THE ASSESSING OFFIC ER ESTIMATED THE AGRICULTURAL INCOME AFTER ALLOWING ESTIMATED EXPEN DITURE. 11. LET US FIRST TAKE THE DISPUTE WITH REGARD TO CU LTIVATION OF LAND WHICH WAS CLAIMED TO HAVE BEEN TAKEN ON LEASE. THE ASS ESSEE CLAIMED BEFORE THE LOWER AUTHORITIES THAT HE TOOK 75 ACRES OF LAND ON LEASE ON THE BANKS OF BHAVANI RIVER IN SURVEY NO.209/A1 IN SIRUMUGAI VILL AGE. TO SUBSTANTIATE THIS CONTENTION THE ASSESSEE HAS PRODUCED AN AGREE MENT SAID TO BE EXECUTED BY ONE SUBRAMANI AND ONE NANJAN ON 17-01-2 003. APART FROM THIS AGREEMENT THE ASSESSEE HAS ALSO FILED A COPY OF THE EXTRACT OF THE VILLAGE ADANGAL SHOWING THAT 40 HECTARES WHICH IS E QUIVALENT TO 70 ACRES OF LAND IN SURVEY NO.209/1A WAS UNDER CULTIVATION B Y THE ASSESSEE. IT APPEARS FROM THE ORDER OF THE LOWER AUTHORITIES THA T A CERTIFICATE ALSO 11 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 OBTAINED FROM THE VILLAGE OFFICER CERTIFYING THAT T HE ASSESSEE HAS CULTIVATED BANANA PLANTAIN ON THE ABOVE LAND ON THE BHAVANI RI VER BASIN. DURING THE COURSE OF ENQUIRY SHRI NANJAN WAS EXAMINED BY THE ADDL DIRECTOR OF INCOME-TAX(INVESTIGATION) ON 23-09-2009. THE SAID NANJAN DENIED BEFORE THE AUTHORITIES OF HAVING EXECUTED AN AGREEMENT WIT H THE ASSESEE. THE SAID NANJAN ALSO CLAIMED THAT HE OWNED ONLY 0.75 AC RES OF LAND THEREFORE THAT EXTENT OF LAND COULD NOT BE LEASED OUT TO THE ASSESSEE. ON A FURTHER ENQUIRY BY THE DEPARTMENT IT WAS FOUND THAT THE LAN D WAS CLASSIFIED AS PORAMBOKE BY THE STATE REVENUE DEPARTMENT AND IT WA S UNDER THE CONTROL OF PUBLIC WORKS DEPARTMENT OF STATE OF TAMIL NADU. THE STATE PUBLIC WORKS DEPARTMENT DENIED THE FACT OF LEASING OUT THE LAND TO MR. NANJAN. HOWEVER IN RESPECT OF CULTIVATION THE STATE PUBLI C WORKS DEPARTMENT APPEARS TO HAVE TOLD THE INCOME-TAX DEPARTMENT THAT IT HAS TO BE CLARIFIED ONLY FROM THE STATE REVENUE DEPARTMENT. 12. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WHE THER THE LAND BELONGS TO MR. NANJAN AND SUBRAMANI AS CLAIMED BY THE ASSESSEE . THE VERY FACT THAT THE LAND WAS CLASSIFIED AS PORAMPOKE IN THE REVENUE RECORDS OF THE STATE GOVERNMENT CLEARLY SHOWS THAT THE LAND BELONGS TO T HE GOVERNMENT AND NOT TO ANY INDIVIDUAL. THEREFORE NEITHER MR. NANJ AN NOR MR. SUBRAMANI OR ANYBODY ELSE COULD CLAIM OWNERSHIP IN RESPECT OF TH E LAND ON BHAVANI RIVER 12 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 BASIN IN SURVEY NO.209/1A. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE LAND BELONGS TO THE GOVERNMENT OF TAMIL NADU. THEREFORE THE LEASE DEED IF ANY EXECUTED BY NANJAN AND SUBRAMANI WOUL D HAVE NO SIGNIFICANCE AT ALL. HENCE WE NEED NOT GO INTO THE QUESTION WHETHER MR. NANJAN AND SUBRAMANI HAVE EXECUTED THE LEASE DEED I N FAVOUR OF THE ASSESSEE OR NOT? IN FACT NEITHER MR. NANJAN NOR M R. SUBRAMANI IS THE OWNER OF THE LAND THEREFORE THE QUESTION OF EXECU TION OF LEASE DEED BY NANJAN AND SUBRAMANI WOULD NOT ARISE FOR CONSIDERAT ION. 13. THE NEXT QUESTION WHICH FOLLOWS IS WHETHER THE ASSESSEE ACTUALLY CULTIVATED THE LAND WHICH IS ON THE BANKS OF BHAVAN I RIVER IN SURVEY NO.209/A1 OF SIRUMUGAI VILLAGE? TO SUPPORT THE CLA IM OF CULTIVATION THE ASSESSEE HAS FILED THE EXTRACT OF ADANGAL REGISTER. THE TRANSLATED COPY OF THE ADANGAL REGISTER IS AVAILABLE AT PAGES 40 41 A ND 42 OF THE PAPER BOOK. AT COLUMN 6 OF THE ADANGAL REGISTER THE CUL TIVATION IS SHOWN AS FOLLOWS: SUBRAMANI NANJAN RAVICHANDRAN SIV COMPANY 13 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 AT COLUMN NO.7 THE NAME OF THE ASSESSEE VIZ SHRI R VIJAYAKUMAR IS SHOWN AS AGRICULTURIST. THE CROP CULTIVATED IS BAN ANA. THE AREA OF THE LAND IS 40 HECTARES. THIS FACT IS EMERGING FROM TH E EXTRACT OF THE ADANGAL REGISTER FILED BY THE ASSESSEE. THE ADANGAL REGIST ER WHICH IS OTHERWISE KNOWN AS ACCOUNT NO.2 OF THE VILLAGE ACCOUNT IS M AINTAINED BY THE STATE REVENUE DEPARTMENT OF THE GOVERNMENT. THIS REGISTE R IS UPDATED IN EVERY SIX MONTH. THE VILLAGE ADMINISTRATIVE OFFICER OF T HE CONCERNED VILLAGE WILL INSPECT THE FIELD AND RECORD THE ACTUAL CULTIVATION IN THE ADANGAL REGISTER. THE ENTRY MADE BY THE VILLAGE ADMINISTRATIVE OFFICE R IN THE ADANGAL REGISTER WOULD BE VERIFIED AND CONFIRMED BY A GAZET TE OFFICER AT THE LEVEL OF DEPUTY TAHSILDAR IN THE TALUK OFFICE. THEREAFTER T HIS WOULD BE PLACED BEFORE THE STATISTIC COMMITTEE OF THE TALUK FOR SEN DING A REPORT WITH REGARD TO ANTICIPATED FOOD PRODUCTION OF THE TALUK. THERE FORE THE ADANGAL REGISTER WHICH WAS PREPARED IN THE COURSE OF OFFICI AL FUNCTIONING OF THE STATE GOVERNMENT CANNOT BE IGNORED WHILE DECIDING T HE DISPUTE BETWEEN THE INCOME-TAX DEPARTMENT AND THE ASSESSEE WITH REG ARD TO CULTIVATION. SINCE THE ENTRY IN ADANGAL REGISTER SHOWS THAT THE LAND WAS CULTIVATED BY THE ASSESSEE THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT ENTRIES IN THE ADANGAL REGISTER HAS TO BE CONSIDERED IN THE ASSESS MENT PROCEEDINGS. 14 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 14. THE NEXT QUESTION THAT MAY FOLLOW IS WHEN THE L AND BELONGS TO THE STATE GOVERNMENT CAN THE ASSESSEE CULTIVATE THE LA ND WITHOUT THE PERMISSION OF THE STATE GOVERNMENT? IT IS COMMON K NOWLEDGE THAT THE LAND BELONGING TO THE STATE GOVERNMENT WAS ENCROACH ED OFTEN SOMETIMES WITH FULL KNOWLEDGE OF THE OFFICIALS OF THE STATE G OVERNMENT. WHEN THE ASSESSEE ENCROACHED THE LAND BELONGING TO THE STATE GOVERNMENT AND CULTIVATED THE SAME THE INCOME GENERATED OUT OF SU CH CULTIVATION HAS TO BE TREATED AS AGRICULTURAL INCOME. MERELY BECAUSE THE CULTIVATION WAS MADE BY ENCROACHING THE LAND BELONGING TO THE STATE GOVE RNMENT THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE INCOME CANNOT BE IGNORED OR CLASSIFIED OTHERWISE UNDER THE INCOME-TAX ACT. THE VERY FACT THAT THE REVENUE OFFICIALS OF THE STATE GOVERNMENT WHO ARE EMPOWERE D TO PROTECT THE RIVER AND OTHER LANDS BELONGING TO THE STATE GOVERNMENT E NDORSE THAT THE ASSESSEE HAS CULTIVATED THE LAND BY MAKING AN OFFIC IAL ENTRY IN THE ADANGAL REGISTER. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT PRIMA FACIE THE ASSESSEE CULTIVATED THE LAND IN SURVEY NO.209/1A IN SIRUMUGAI VILLAGE EVEN THOUGH THE LAND BELONGS TO THE STATE GOVERNMEN T IN THE ABSENCE OF OTHER MATERIALS ON RECORD. 15. NOW COMING TO THE AREA OF CULTIVATION THE CIT( A) THOUGH ADMITS THAT THERE WAS CULTIVATION HE RESTRICTED THE AREA OF CU LTIVATION TO 50% OF THE 15 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 AREA OF LAND I.E. AT 37.5 ACRES. ADMITTEDLY THE LAND WHICH WAS CLAIMED TO BE CULTIVATED IS THE BHAVANI RIVER BASIN WHICH FALL S IN SURVEY NO.209/1A. NORMALLY THE RIVER AND BANKS OF THE RIVER WOULD BE SUB DIVIDED BY GIVING A SEPARATE SURVEY NUMBER. THE BASIN OF THE RIVER BAN K IS DIVIDED BY GIVING A SEPARATE SURVEY NUMBER. IN THIS CASE THE ASSESSEE CLAIMS THAT THE BASIN OF THE RIVER WAS USED FOR CULTIVATION. THERE IS AL SO A REFERENCE IN THE ADANGAL REGISTER ABOUT THE AREA OF THE LAND CULTIVA TED. WHEN THE AREA OF CULTIVATION IS REFERRED IN THE ADANGAL REGISTER TH E ENTRY IN THE ADANGAL REGISTER ABOUT THE AREA OF CULTIVATION SHOULD BE TA KEN AS SUCH UNLESS AND UNTIL THERE IS MATERIAL TO PROVE OTHERWISE. THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT EITHER THE EXTRACT OF ADANG AL REGISTER SHOULD BE TAKEN IN TOTO OR IT SHOULD BE REJECTED IN TOTO. HA VING ACCEPTED THE ENTRIES IN THE ADANGAL REGISTER THE CIT(A) IS NOT CORRECT IN REJECTING THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 50% OF THE AREA OF THE LA ND. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADANGAL REGISTER BE ING A BASIC DOCUMENT NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER TO FI ND OUT THE ACTUAL CULTIVATION AN AREA OF CULTIVATION. SINCE THE ADAN GAL REGISTER WAS NOT PROPERLY EXAMINED BY THE ASSESSING OFFICER AS WELL AS THE CIT(A) THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSING OFFICER SHALL RE- EXAMINE THE MATTER AFTER CONSIDERING THE ADANGAL RE GISTER FILED BY THE ASSESSEE. ACCORDINGLY THE ORDERS OF THE LOWER AUTH ORITIES ARE SET ASIDE 16 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 AND THE ISSUE OF CULTIVATION OF BHAVANI RIVER BASIN IN SURVEY NO.209/1A OF SIRUMUGAI VILLAGE IS REMANDED BACK TO THE FILE OF T HE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER IN TH E LIGHT OF ENTRIES FOUND IN THE ADANGAL REGISTER AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSE SSEE. IT IS ALSO OPEN TO THE ASSESSING OFFICER TO EXAMINE THE CONCERNED VILL AGE ADMINISTRATIVE OFFICER AND OTHER OFFICIALS OF THE REVENUE OFFICERS OF THE STATE GOVERNMENT IN THE COURSE OF THE PROCEEDINGS. IF THE ASSESSING OF FICER EXAMINES THE VILLAGE ADMINISTRATIVE OFFICER AND OTHER OFFICERS AN OPPORTUNITY SHALL BE GIVEN TO THE ASSESSEE FOR CROSS EXAMINATION. 16. THE NEXT QUESTION ARISES FOR CONSIDERATION IS E STIMATION OF AGRICULTURAL INCOME. THE ASSESSING OFFICER ESTIMAT ED THE INCOME FROM BANANA CULTIVATION AT 20% AFTER ALLOWING EXPENDITUR E AT 80%. HOWEVER IN RESPECT OF COCONUT TREE THE ASSESSING OFFICER ESTI MATED THE INCOME AT 40% BY ALLOWING EXPENDITURE OF 60%. THE CIT(A) MODIFIE D THE SAME BY ALLOWING 60% OF THE EXPENDITURE FOR BANANA CULTIVAT ION AND INCOME WAS ESTIMATED AT 40% INSTEAD OF 20% BY THE ASSESSING OF FICER. IN RESPECT OF COCONUT PLANTATION THE CIT(A) ESTIMATED THE INCOME AT 70% AFTER ALLOWING EXPENDITURE AT 30%. IT IS AN ADMITTED FACT THAT CO CONUT AND BANANA ARE CASH CROPS IN THIS COUNTRY. ONCE COCONUT TREE IS P LANTED WHAT IS REQUIRED 17 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 IS ONLY MAINTENANCE OF THE TREE. THEREFORE IN RES PECT OF COCONUT TREE THERE MAY NOT BE MUCH EXPENDITURE EXCEPT EXPENDITURE FOR MAINTENANCE IN REGULAR INTERVALS. THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE EXPENDITURE FOR MAINTAINING THE COCONUT TREE WO ULD NORMALLY BE ESTIMATED AT 25%. HENCE THE BALANCE 75% SHALL BE TAKEN AS INCOME. IN RESPECT OF BANANA CULTIVATION APPARENTLY BHAVANI RIVER BASIN ITSELF IS FERTILE LAND; THEREFORE IT MAY NOT REQUIRE MUCH FERTILIZER . HOWEVER PLANTATION AND MAINTENANCE WOULD REQUIRE MUCH HUMAN EFFORT. THE B ANANA BEING A CASH CROP THIS TRIBUNAL IS OF THE CONSIDERED OPINION TH AT 50% OF THE TOTAL RECEIPT COULD BE ALLOWED AS EXPENDITURE AND 50% CAN BE TAKE N AS INCOME. ACCORDINGLY THE ORDERS OF LOWER AUTHORITIES ARE MO DIFIED IN RESPECT OF ESTIMATION OF INCOME AS FOLLOWS: (1) IN RESPECT OF BANANA CULTIVATION THE EXPENDITURE SHALL BE ALLOWED AT 50% AND THE IN COME SHALL BE ESTIMATED AT 50%. (2) IN RESPECT OF COCONUT CULTIVATION THE EXPENDITURE SHALL BE ALLOWED AT 25% AND THE IN COME SHALL BE ESTIMATED AT 75%. 18 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 THE ORDER OF THE LOWER AUTHORITIES WITH REGARD TO E STIMATION OF INCOME IS MODIFIED ACCORDINGLY. 17. NOW COMING TO THE CROSS OBJECTIONS FILED BY THE ASSESSEE THE FIRST GROUND RELATES TO ESTIMATION OF INCOME FROM AGRICUL TURE. WHILE DEALING WITH THE DEPARTMENTAL APPEAL THIS GROUND OF APPEAL WAS CONSIDERED AND THE INCOME FROM AGRICULTURE IS MODIFIED AS FOLLOWS: (1) IN RESPECT OF BANANA CULTIVATION THE EXPENDITURE SHALL BE ALLOWED AT 50% AND THE IN COME SHALL BE ESTIMATED AT 50%. (2) IN RESPECT OF COCONUT CULTIVATION THE EXPENDITURE SHALL BE ALLOWED AT 25% AND THE IN COME SHALL BE ESTIMATED AT 75%. IN VIEW OF THE ABOVE THERE IS NO NEED FOR ANY SEPA RATE ADJUDICATION. 18. THE NEXT GROUND OF CROSS OBJECTION IS WITH REGA RD TO LEVY OF INTEREST U/S 234B & 234C OF THE ACT. LEVY OF INTEREST IS MA NDATORY AND CONSEQUENTIAL. THEREFORE WHILE GIVING EFFECT TO T HE ORDER OF THIS TRIBUNAL THE ASSESSING OFFICER SHALL CONSIDER THE OBJECTION OF THE ASSESSEE AND 19 ITA NO. 405 TO 409/COCH/2011 COS 29 TO 33/COCH/2011 THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW A FTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 19. IN THE RESULT APPEALS OF THE REVENUE AND THE C ROSS OBJECTIONS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH OCTOBER 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 25 TH OCTOBER 2013 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH