ITO Wd, 9(4), PUNE, Pune v. SHRI CHANDER PRAKASH SAROGI, Pune

ITA 6/PUN/2009 | 2005-2006
Pronouncement Date: 31-03-2011 | Result: Allowed

Appeal Details

RSA Number 624514 RSA 2009
Assessee PAN EYEAR1999A
Bench Pune
Appeal Number ITA 6/PUN/2009
Duration Of Justice 1 month(s) 7 day(s)
Appellant ITO Wd, 9(4), PUNE, Pune
Respondent SHRI CHANDER PRAKASH SAROGI, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-03-2011
Assessment Year 2005-2006
Appeal Filed On 21-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 06 /PN/ 20 09 ( ASSTT. YEAR S : 2005 - 06 ) I.T.O WARD 9(4) AKURDI PUNE .. APP ELLANT V. SHRI CHANDER PRAKASH SAROGI 1/32 0 LOTUS NEXT SECTOR NO.27A NIGDI PUNE - 44 PAN : NOT AVAILABLE . RESPONDENT APP ELLANT BY : SHRI HARESHWAR SHARMA RESPONDENT BY : SHRI C.G.DOSHI & SMT.NEETA DADLANI ORDER PER I.C. SUDHIR J M THIS IS THE APPEAL FILED BY THE REVENUE ARISING O UT OF THE ORDER OF CIT(A) - III PUNE DATED 1.9.2008. 2. GROUNDS RAISED BY REVENUE READ AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ACCEPTING ASSESSEES CLAIM OF AGRICULTURAL SALES EVEN THOUGH NOT SUPPORTED BY BILLS/VOUCHERS SPECIFICALLY WHEN THE ASSESSEE HAD TRANSACTION WITH RELATED CONCERN. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN TREATING THE DOCUMENTS LIKE FINANCIAL APPRAISAL REPORT LOAN SANCTION LETTER DISPATCH CHALLAN RAILWAY RECEIPT AIRWAY BILLS AS EVIDENCE OF EARNING AGRICULTURAL INCOME WHEN THE SAID DOCUMENTS ARE NOT GIVING ANY INFORMATION REGARDING ASSESSEES ACTUAL AGRICULTURAL RECEIPTS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS FA ILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAS SHOWN UNUSUAL HIGH PROFIT FROM AGRICULTURAL ACTIVITY BY ARRANGING THE TRANSACTIONS WITH THE RELATED CONCERN. ITA . NO . 06/PN/2009 CHANDER PRAKASH SAROGI A. Y 2005 - 06 . - 2 3. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF T HE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD. 4. THE RELEVANT FACTS ARE THAT VALPLUS BIOTECH LTD. OWNED BY MEMBERS OF PATEL FAMILY BECAME A SICK COMPANY IN THE YEAR 1999 AND ITS ENTIRE BUSINESS AND PRODUCTION ACTIVITY CAME TO STANDSTILL. THE CO MPANY SUFFERED HUGE LOSS OF RS.122.18 LAKHS AS ON 31 ST MARCH 2002. BANKS AND FINANCIAL INSTITUTIONS STARTED RECOVERY PROCEEDINGS AGAINST IT. THE FAMILY OF THE ASSESSEE I.E. SAROGI FAMILY BEING IN FLOWER TRADING BUSINESS TOOK OVER THE COMPANY BY PURCHASE OF ITS EQUITY IN THE A.Y. 2006 - 07. EVEN PRIOR TO TAKE OVER OF THE COMPANY BY THE SAROGI FAMILY THE ASSESSEE SET OUT GREEN HOUSES IRRIGATION SYSTEM ETC. AND STARTED CULTIVATING FLOWERS ON THE LAND OF THE COMPANY. ASSESSEE CLAIMED THAT DURING THE YEARS RELEVANT TO A.Y. 2004 - 05 AND 2005 - 06 IT CARRIED OUT FLORICULTURAL ACTIVITY. THE A.O DISBELIEVED THE CLAIM ON THE BASIS THAT ONLY DURING THE YEAR RELEVANT TO A.Y. 2006 - 07 THE FORMALITIES FOR TAKING OVER OF VALPLUS BIOTECH LTD. COMPLETED INCLUDING AGRICUL TURAL LAND ACQUIRED BY SAROGI FAMILY; OUT OF THE TOTAL SALES SHOWN BY THE ASSESSEE AT RS.253.27 LAKHS MORE THAN 55% OF THE SALES RELATE TO CONSIGNMENT SALES THROUGH RELATIVE OF THE ASSESSEE SHRI SANJAY SAROGI PROPRIETOR OF M/S. SHREYAS BLOOMS; NO SUPP ORTING BILLS/VOUCHERS WERE AVAILABLE TO ESTABLISH THE CLAIMED SALES; AND THE ASSESSEE CLAIMED TAX FREE PROFITS BY WAY OF AGRICULTURE INCOME AT RS.1 11 59 858/ - WHEREAS M/S. SHREYAS BLOOMS WAS SHOWING A TAXABLE INCOME OF ONLY RS. 56 780/ - ON ACCOUNT OF TRA NSACTIONS RELATED TO SALE OF FLOWERS ON BEHALF OF THE ASSESSEE. ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE CLAIMED AGRICULTURE INCOME SHOULD NOT BE REJECTED. THE ASSESSEE TRIED TO EXPLAIN THE SAME BUT IN ABSENCE OF PROPER ITA . NO . 06/PN/2009 CHANDER PRAKASH SAROGI A. Y 2005 - 06 . - 3 EVIDENCE IN SUPPORT A.O. DID NOT AGREE WITH THE ASSESSEE AND REJECTED THE CLAIMED AGRICULTURAL INCOME AND TAXED THE SAME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE LD CIT(A) HAS HOWEVER ACCEPTED THE CLAIMED AGRICULTURAL INCOME AT RS.1 11 59 858/ - . 5. IN SUPPORT OF THE GROU NDS THE CONTENTION OF THE LD. D.R. BEFORE US REMAINED THAT WITHOUT APPRECIATING THAT THE CLAIMED AGRICULTURAL INCOME WAS NOT SUPPORTED BY BILL/VOUCHERS LD CIT(A) HAS ACCEPTED AS AGRICULTURAL INCOME ON THE BASIS OF FEW D I SPATCH CHALLAN RAILWAY RECEI PT AND AIR - WAY BILLS. THE LD CIT(A) HAS ALSO ACCEPTED FINANCIAL APPRAISAL REPORT LOAN SANCTION FURNISHED BY THE ASSESSEE AS SUFFICIENT EVIDENCE REGARDING AGRICULTURAL ACTIVITIES. THE LD. D.R. DREW OUR ATTENTION TO THE RELEVANT PARAGRAPHS OF THE FIRST APPELLATE ORDER ESPECIALLY PARA NOS. 7 7.2 TO 7.6 OF THE FIRST APPELLATE ORDER. THE LD. A.R. ON THE OTHER HAND TRIED TO JUSTIFY THE APPELLATE ORDER. HE ALSO REFERRED TO PAGE NOS. 1 TO 123 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE UNDER THE CER TIFICATE THAT THESE PAPERS WERE MADE AVAILABLE BEFORE THE AUTHORITIES BELOW. THESE PAPERS ARE COPIES OF LETTER OF AUTHORITY M.O.U DATED 13.7.2004 DOCUMENTS REGARDING TRANSFER OF AGRICULTURAL LAND LEASE DEED DATED 13.9.2004 FINANCIAL APPRAISAL REPORT DATED 26.3.2004 PREPARED BY ING VYAS BANK FOR FLORICULTURE FINANCE SANCTION OF LOAN BY THE BANK L.O. I DATED 14.1.2005 RECEIVED UNDER THE SCHEME DEVELOPMENT OF COMMERCIAL HORTICULTURE THROUGH PRODUCTION AND BEST HARVEST MANAGEMENT GROWERS CERTIFICAT ES ADUDIT REPORT OF SHREYAS FARM FOR THE PERIOD ENDED 31.3.2005 31.3.2004 AND CHALL ANS & RAILWAY RECEIPTS AIRWAY BILLS ETC. AND THE DETAILS OF DISPATCHES ALONG WITH THE SUMMARY AND RATES OF SALES. 6. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW WE FIND THAT NONE OF THE AUTHORITIES BELOW HAS EXAMINED THE POSSIBILITY OF ITA . NO . 06/PN/2009 CHANDER PRAKASH SAROGI A. Y 2005 - 06 . - 4 EARNING THE CLAIMED AGRICULTURAL INCOME OF RS. 1 11 59 858/ - FROM THE CULTIVATION OF FLOWERS IN THE LAND AREA OF 5 HECTARES AT GODAMBERE NEAR SOMATANE PATTA UNDER DISTRIC T PUNE. UNDISPUTEDLY COPIES OF ONLY FEW CHALLANS RAILWAY RECEIPTS AND AIRWAY BILLS WERE SUBMITTED BY THE ASSESSEE TO SUPPORT THE EARNING OF THE CLAIMED AGRICULTURAL INCOME. UNDER THESE CIRCUMSTANCES WHEN EVIDENCE FURNISHED BY THE ASSESSEE WAS NOT SU FFICIENT TO SUPPORT THE CLAIMED AGRICULTURAL INCOME IN OUR VIEW REPORT OF AN AGRICULTURAL EXPERT FROM GOVERNMNMET INSTITUTION WOULD HAVE BEEN A GUIDING FACTOR TO APPRECIATE THE CLAIM OF THE ASSESSEE. UNDER THESE CIRCUMSTANCES AND TO MEET OUT ENDS OF JU STICE WE SET ASIDE THE MATTER TO THE FILE OF THE A.O TO SEEK EXPERT REPORT ON THE POSSIBILITY OF EARNING OF THE CLAIMED AGRICULTURE INCOME ON THE VAILABLE AGRICULTURAL LAND HOLDINGS AND DECIDE THE ISSUE AFRESH IN VIEW OF MATERIAL ALREADY AVAILABLE ON REC ORD AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. THE GROUNDS ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH 201 1. SD/ - SD/ - ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 31ST MARCH 20 1 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLA NT 2. THE RESPONDENT 3. THE CIT(A) - III PUNE 4. THE CIT - V PUNE 4 . THE D.R. A BENCH PUNE 5 . GUARD FILE BY ORDER ITA . NO . 06/PN/2009 CHANDER PRAKASH SAROGI A. Y 2005 - 06 . - 5 ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE