ACIT, Thanjavur v. Smt. V.Anandhi,, Thanjavur

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NO. 462/MDS/2009 ASSESSMENT YEAR : 2002-03 THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-I THANJAVUR. V. SMT. V. ANANDHI W/O SHRI SP. VALLIAPPAN C/O SUBRAMANIAM & CO. MEDICAL COLLEGE ROAD THANJAVUR. (PAN : ADPPA7701G) A N D I.T.A. NO. 468/MDS/2009 ASSESSMENT YEAR : 2002-03 SMT. V. ANANDHI V. THE ASSISTANT COMMISSIONER W/O SHRI SP. VALLIAPPAN OF INCOME-TAX CIRC LE-I C/O SUBRAMANIAM & CO. THANJAVUR. MEDICAL COLLEGE ROAD THANJAVUR. (APPELLANTS) (RESPONDENTS) DEPARTMENT BY : SHRI B. SRINIVAS ASSESSEE BY : SHRI R. VIJAYARAGHAVAN O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : ITA NO. 462/MDS/2009 IS AN APPEAL FILED BY THE REVENUE AND ITA NO. 468/MDS/ 2009 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A PPEALS) TRICHY IN ITA NO.617/06-07 DATED 22-1-2009 FOR THE ASSESSMENT YEA R 2002-03. I.T.A. NO.462 & 468/MDS/2009 2 2. SHRI B.SRINIVAS LEARNED SR. DR REPRESENTED ON B EHALF OF THE REVENUE AND SHRI R. VIJAYARAGHAVAN ADVOCATE REPRESENTED ON BEH ALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE IS AN INDIVIDUAL WHO IS DOING THE BUSINESS OF PURCHASE AND SALE OF ARECA NUT AND MANUFACTURING AND SELLING OF POLYTHENE BAGS. IT WAS SUBMITTED THAT T HE ASSESSEE WAS OWNING A TEA ESTATE AT KOTHAGIRI AND THE ASSESSEE HAD IN THE INC OME AND EXPENDITURE STATEMENT CREDITED AN AMOUNT OF ` 2 91 428/- AND AN AMOUNT OF ` 9 00 000/- TOWARDS SALE OF TEA LEAVES AND SALE OF TREES RESPEC TIVELY. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD ALSO CLAIMED AN EXPENDITURE O F ` 1 88 709/-. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD EXAMINED THE CLAIM OF AGRICULTURAL INCOME AND THE ASSESSEE WAS UNABLE TO PROVE THE SAL E OF THE TREES AS AGRICULTURAL INCOME NOR WAS THE ASSESSEE ABLE TO PR OVE THE SALE OF THE TEA LEAVES IN FULL. IT WAS THE SUBMISSION THAT CONSEQUENTLY T HE ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF THE ASSESSEE IN REGARD TO T HE SALE OF THE TREES AND HAD TREATED THE AMOUNT OF ` 9 LAKHS AS NON-AGRICULTURAL INCOME AND ASSESSED TH E SAME UNDER THE HEAD OTHER SOURCES. THE ASSESSING OFFICER HAD ALSO TREATED 50% OF THE SALE OF THE TEA LEAVES AS THE NON-AGRIC ULTURAL INCOME AND TREATED THE SAME AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER HAD ALSO MADE AN ADDITION OF ` 50 000/- TOWARDS DRAWINGS. IT WAS THE SUBMISSION THAT ON APPEAL THE LEARNED CIT(A) HAD HELD THAT THE AMOUNT OF ` 9 LAKHS REPRESENTED THE SALE OF SILVER OAK TREES AND HAD HELD THAT THE SAME WAS LI ABLE TO BE ASSESSED UNDER THE I.T.A. NO.462 & 468/MDS/2009 3 HEAD CAPITAL GAINS BY FOLLOWING THE DECISION OF T HE HON'BLE MADRAS HIGH COURT IN THE CASE OF BEVERLEY TEA ESTATES V. ASSISTANT COM MISSIONER OF INCOME-TAX REPORTED IN 117 ITR 302. IT WAS THE FURTHER SUBMIS SION THAT THE LEARNED CIT(A) HAD ACCEPTED THE CLAIM OF THE ASSESSEE IN REGARD TO THE SALE OF TEA LEAVES BY CONSIDERING ADDITIONAL EVIDENCES. IT WAS THE SUBMI SSION THAT THE LEARNED CIT(A) HAD CONFIRMED THE ADDITION ON ACCOUNT OF THE DRAWIN GS. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD CONSIDERED FRESH EVIDEN CES. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSING OFFICER HAD SUBSEQUEN TLY VERIFIED THE SALE OF SILK OAK TREES AS CLAIMED BY THE ASSESSEE TO ONE SHRI KR ISHNAN KUTTY PROPRIETOR OF M/S. MOOKAMBIGAI TIMBERS AT METTUPALAYAM. IT WAS T HE SUBMISSION THAT THE ASSESSING OFFICER HAD ALSO RECORDED THE STATEMENT F ROM SHRI KRISHNAN KUTTY ON 8- 11-2010 AS PER WHICH SHRI KRISHNAN KUTTY HAD OFFERE D AN INCOME OF ` 25 240/- FOR THE ASSESSMENT YEAR 2002-03 AND A TURNOVER OF ` 2 34 863/- AND HIS BOOKS SHOWED NO PURCHASES DURING THE YEAR. IT WAS THE SU BMISSION THAT THE ORDER OF THE LEARNED CIT(A) GRANTING RELIEF TO THE ASSESSEE WAS LIABLE TO BE REVERSED. 4. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE S UBMITTED THAT SHRI KRISHNAN KUTTY MIGHT HAVE GIVEN SUCH A STATEMENT BU T IT WAS ONLY A SELF-SERVING STATEMENT AND THE SAME WAS ALSO NOT PUT TO THE ASSE SSEE FOR CROSS EXAMINATION. IT WAS THE FURTHER SUBMISSION THAT THE TEA LEAVES H AD BEEN SOLD TO M/S. PREETHI TEA INDUSTRY PVT. LTD. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE UPHELD INSOFAR AS THE TREAT MENT OF THE SALE OF SILVER OAK I.T.A. NO.462 & 468/MDS/2009 4 TREES WAS LIABLE TO BE ASSESSED ONLY UNDER THE HEAD CAPITAL GAINS AND ALSO IN REGARD TO THE DELETION OF THE ADDITION MADE BY THE ASSESSING OFFICER BY TREATING 50% OF THE SALE OF TEA LEAVES AS INCOME FROM OTHER SOURCES. IT WAS THE FURTHER SUBMISSION THAT IN THE ASSESSEES APPEAL TH E ASSESSEE HAS CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE ADDI TION OF ` 50 000/- TOWARDS INSUFFICIENT DRAWINGS. IT WAS THE SUBMISSION THAT THE SELF-ASSESSMENT TAX HAVING BEEN PAID WITHIN THE DUE DATE NO INTEREST UNDER SE CTION 234A WAS TO BE LEVIED. 5. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE LEARNED CIT(A) CLEARLY SHOWS THAT BEFORE THE ASSESS ING OFFICER THE ASSESSEE HAS BEEN CLAIMING THE SALE OF TREES. HOWEVER BEFORE T HE LEARNED CIT(A) THE CLAIM IS OF THE SALE OF SILVER OAK TREES. A FURTHER EXAMINA TION BY THE ASSESSING OFFICER OF SHRI KRISHNAN KUTTY THE PERSON TO WHOM THE ASSESSE E HAS CLAIMED TO HAVE SOLD 700 SILVER OAK TREES SHOWS THAT SHRI KRISHNAN KUTTY HAS DENIED ANY PURCHASE FROM THE ASSESSEE. THE LEARNED DR HAS ALSO GIVEN SUCH SWORN STATEMENT TO THE LEARNED AUTHORISED REPRESENTATIVE. A PERUSAL OF TH E STATEMENT CLEARLY SHOWS THAT SUCH EVIDENCE WAS NOT AVAILABLE IN THE COURSE OF AS SESSMENT NOR HAS IT BEEN GIVEN TO THE ASSESSEE FOR CROSS EXAMINATION. HOWEV ER CONSIDERING THE FACT THAT SHRI KRISHNAN KUTTY HAS CATEGORICALLY STATED THAT H E HAS NOT PURCHASED THE SILVER OAK TREES FROM THE ASSESSEE AS AGAINST THE CONFIRMA TION GIVEN BY THE SAID SHRI I.T.A. NO.462 & 468/MDS/2009 5 KRISHNAN KUTTY WHICH WAS FOUND AT PAGE 8 OF THE PA PER BOOK OF THE ASSESSEE WHICH ARE IN DIRECT CONTRADICTION TO EACH OTHER WE ARE OF THE VIEW THAT THIS ISSUE HAS TO BE RESTORED TO THE FILE OF THE ASSESSING OFF ICER FOR RE-EXAMINATION AND WE DO SO. IN THE COURSE OF RE-EXAMINATION THE ASSESSIN G OFFICER SHALL GRANT THE ASSESSEE OPPORTUNITY TO CROSS EXAMINE THE SAID SHRI KRISHNAN KUTTY. THE ASSESSEE SHALL CO-OPERATE IN THE CROSS EXAMINATION PROCEEDINGS. IF IT IS FOUND THAT THE ASSESSEE HAS SOLD 700 SILVER OAK TREES TH E AMOUNT RECEIVED BY THE ASSESSEE ON THE SALE OF SUCH SILVER OAK TREES SHALL BE ASSESSED UNDER THE HEAD CAPITAL GAINS. 7. IN REGARD TO THE ISSUE OF SALE OF TEA LEAVES IT IS NOTICED THAT THE ASSESSEE HAS PRODUCED FRESH EVIDENCE IN THE FORM OF DETAILS OF M/S.PREETHI TEA INDUSTRY PVT. LTD. AS FRESH EVIDENCE HAS BEEN ADMITTED BY T HE LEARNED CIT(A) AND THE SAME HAS NOT BEEN PUT TO THE ASSESSING OFFICER FOR VERIFICATION THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR R E-EXAMINATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE HER C ASE. THE ASSESSEE SHALL BE AT LIBERTY TO PRODUCE ALL SUCH EVIDENCES AS REQUIRE D TO SUBSTANTIATE HER CASE IN REGARD TO BOTH THE ISSUES BEING THE CLAIM OF SALE O F SILVER OAK TREES AS ALSO THE CLAIM OF THE SALE OF TEA LEAVES TO M/S. PREETHI TEA INDUSTRY PVT. LTD. 8. IN REGARD TO THE ISSUE OF THE ADDITION REPRESENT ING INSUFFICIENT DRAWINGS AS THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY EV IDENCE TO SHOW THAT THE DRAWINGS WERE INSUFFICIENT WE ARE OF THE VIEW THAT NO ADDITION IS CALLED FOR. A I.T.A. NO.462 & 468/MDS/2009 6 PERUSAL OF THE PAPER BOOK OF THE ASSESSEE ALSO CLEA RLY SHOWS THAT THE DRAWINGS OF THE FAMILY TO WHICH THE ASSESSEE IS A PART SHOWS A N AMOUNT OF ` 2 14 000/-. THE ASSESSING OFFICER HAS ALSO NOT RECORDED AS TO W HAT ARE THE DRAWINGS THAT THE ASSESSEE REQUIRE AND WHY. IN THE CIRCUMSTANCES THE ADDITION AS CONFIRMED BY THE LEARNED CIT(A) ON THIS ISSUE STANDS DELETED. 9. IN REGARD TO THE ISSUE OF LEVY OF INTEREST UNDER SECTION 234A THE SAME IS COMPENSATORY IN NATURE. IF IT IS FOUND THAT THE AS SESSEE HAS PAID THE SELF- ASSESSMENT TAX BEFORE THE DUE DATE THEN OBVIOUSLY NO INTEREST UNDER SECTION234A IS LIABLE TO BE CHARGED. THE ASSESSING OFFICER IS DIRECTED TO VERIFY AS TO WHETHER THE SELF-ASSESSMENT TAX HAS BEEN PAID BE FORE THE DUE DATE AND IF FOUND TO HAVE BEEN PAID NO INTEREST UNDER SECTION 2 34A IS LIABLE TO BE CHARGED ON THE ASSESSEE. IN THE CIRCUMSTANCES THE APPEAL OF THE REVENUE IN ITA NO. 462/MDS/2009 AND THE APPEAL OF THE ASSESSEE IN ITA NO. 468/MDS/2009 STAND ALLOWED FOR STATISTICAL PURPOSES. 10. THE ORDER WAS PRONOUNCED IN THE COURT ON 10/2/2 011. SD/- SD/- (B. RAMAKOTAIAH) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 10 TH FEBRUARY 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE