VISHAL DUTT, NAVI MUMBAI v. ITO WD 22(3)-4, MUMBAI

ITA 6614/MUM/2009 | 2005-2006
Pronouncement Date: 21-05-2010 | Result: Allowed

Appeal Details

RSA Number 661419914 RSA 2009
Assessee PAN AAGPD1553M
Bench Mumbai
Appeal Number ITA 6614/MUM/2009
Duration Of Justice 4 month(s) 23 day(s)
Appellant VISHAL DUTT, NAVI MUMBAI
Respondent ITO WD 22(3)-4, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 21-05-2010
Assessment Year 2005-2006
Appeal Filed On 29-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI R K PANDA AM ITA NO 6614/MUM/2009 (ASSESSMENT YEAR 2005-06) MR VISHAL DUTT JAL PARBAT BUILDERS 205-B BIG SPLASH SEC 17 VASHI NAVI MUMBAI PAN: AAGPD 1553 M VS ITO WD 22(3)-4 MUMBAI APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI C.P. PATHAK ORDER DATE OF HEARING: 18.05.2010 DATE OF ORDER: 21.05.2010 THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 29TH SEPTEMBER 2009 OF THE CIT (A)-XXXIII MU MBAI RELATING TO ASSESSMENT YEAR 2005-06. 2. DESPITE SERVICE OF NOTICE BY RPAD WHICH WAS DULY RE CEIVED BY THE ASSESSEE NONE APPEARED ON BEHALF OF THE ASSESSE E WHEN THE NAME OF THE ASSESSEE WAS CALLED. NO ADJOURNMENT PE TITION SEEKING ADJOURNMENT OF THE CASE WAS FILED. THEREFORE THE M ATTER IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECOR D AND AFTER HEARING LEARNED DEPARTMENTAL REPRESENTATIVE. 3. THE ASSESSEE IN ITS GROUNDS OF APPEAL HAS BASICALL Y CHALLENGED THE ORDER OF THE CIT (A) IN CONFIRMING T HE ACTION OF THE ASSESSING OFFICER IN DETERMINING THE PROFIT @ 8% ON CONTRACT RECEIPT OF RS 5 LAKHS AND FURTHER CONFIRMING INCOME OF RS 9 2 510/- AS INCOME FROM OTHER SOURCES AS AGAINST AGRICULTURE IN COME DECLARED BY THE ASSESSEE. ITA 6614/M/09 MR VISHAL DUTT ========== 2 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSING OFFICER WITHOUT ASSIGNING ANY REASON DETERMINED THE PROFIT @ 8% OF CONTRACT RECEIPT OF RS 5 LAKHS THEREBY MAKING AN AD DITION OF RS 40 000/-. SIMILARLY REJECTING THE CONTENTION OF T HE ASSESSEE REGARDING THE AGRICULTURE INCOME OF RS 92 510/- TH E ASSESSING OFFICER TREATED THE SAME AS INCOME FROM OTHER SOURC ES. 5. IN APPEAL IT WAS SUBMITTED THAT THE ASSESSEE IS MA INTAINING THE BOOKS OF ACCOUNTS WHICH WERE DULY AUDITED AND SUCH AUDIT REPORT WAS FURNISHED BEFORE THE ASSESSING OFFICER. SINCE THE ASSESSEE HAS COMPLIED WITH PROVISIONS OF SECTION 44 AD(6) OF THE INCOME-TAX ACT NO ADDITION IS REQUIRED TO BE MADE ON THIS ACCOUNT. AS REGARDS AGRICULTURAL INCOME IT WAS SUBMITTED TH AT IN VIEW OF SUB-CLAUSE (1A) TO SECTION 2 OF THE INCOME-TAX ACT ANY RENT OR REVENUE DERIVED FROM LAND WHICH IS SITUATED IN INDI A AND USED FOR AGRICULTURAL PURPOSES WILL AMOUNT TO AGRICULTURAL I NCOME. SIMILARLY THE PERFORMANCE BY CULTIVATOR OR RECEIVER OF RENT I N KIND OF ANY PROCESS ORDINARILY EMPLOYED BY CULTIVATOR OR RECEIV ER OF RENT IN KIND TO RENDER THE PRODUCE RAISED OR RECEIVED BY HIM FIT TO BE TAKEN TO MARKET SHALL ALSO AMOUNT TO AGRICULTURAL INCOME. S INCE THE ASSESSEE IS RECEIVER OF RENT IN KIND OF THE PRODUCE RAISED OR CULTIVATED IT WAS ARGUED THAT SUCH INCOME SHOULD B E TREATED AS AGRICULTURAL INCOME. 6. HOWEVER THE CIT (A) WAS NOT SATISFIED WITH THE ARG UMENTS ADVANCED BY THE ASSESSEE. HE AGREED WITH THE ASSES SEE THAT THE ASSESSING OFFICER HAS NOT ASSIGNED ANY REASON FOR B RINING TO TAX THE CONTRACT RECEIPT AT 8%. HE NOTED THAT ALTHOUGH TH E ASSESSEE HAS INCLUDED THE CONTRACT RECEIPT OF RS 5 LAKHS IN HIS PROFIT AND LOSS ACCOUNT BUT HE HAS NOT BEEN ABLE TO STATE WHAT PORT ION OF THE ESTABLISHMENT EXPENSES ACTUALLY RELATE TO SUCH RECE IPT. HE OBSERVED THAT THE CONTRACT RECEIPTS OF THE ASSESSEE ARE SEPARATE FROM THE MAIN BUSINESS AND ARE MAINLY FOR SUPERVISI NG AND ITA 6614/M/09 MR VISHAL DUTT ========== 3 MANAGING THE CONTRACT WORKS IN NAVI MUMBAI. HE AC CORDINGLY UPHELD THE ACTION OF THE ASSESSING OFFICER. WHILE DOING SO HE FURTHER NOTED THAT THOUGH THIS CASE DOES NOT COME D IRECTLY UNDER THE PARAMETERS OF SECTION 44AD OF THE INCOME-TAX AC T HOWEVER THIS SECTION CAN BE USED AS A GUIDING FORCE TO DETE RMINE THE CORRECT RATE OF PROFIT REGARDING THE CONTRACT RECEIPT. HE ACCORDINGLY UPHELD THE ACTION OF THE ASSESSING OFFICER. AS REG ARDS AGRICULTURAL INCOME DECLARED BY THE ASSESSEE HE NOTED THAT THE ASSESSEE WAS REQUIRED TO PROVE BEYOND DOUBT THAT THE INCOME CLAI MED BY HIM WAS FROM AGRICULTURAL ACTIVITIES BY PRODUCING SOME DOCUMENTARY EVIDENCES ETC. HOWEVER SINCE THE ASSESSEE HAS NOT DONE SO AT ANY STAGE OF PROCEEDINGS EITHER BEFORE THE ASSESSING OF FICER OR BEFORE HIM TO PROVE THAT HE HAS RECEIVED RENT OR REVENUE F ROM THE AGRICULTURAL LAND OWNED BY HIM AND SINCE AGRICULTUR AL ACTIVITIES HAVE NOT BEEN PROVED OR SUBSTANTIATED AND SINCE NO EVIDE NCE OF AGRICULTURAL ACTIVITY HAS BEEN PRODUCED HE UPHELD T HE ACTION OF THE ASSESSING OFFICER IN TREATING THE SAME AS INCOME FR OM OTHER SOURCES. AGGRIEVED WITH SUCH ORDER OF THE CIT (A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIV E AND PERUSED THE ASSESSMENT ORDER AND CIT (A)S ORDER. I FIND ALTHOUGH THE ASSESSEE HAS CLAIMED TO HAVE GOT ITS ACCOUNTS A UDITED AND FILED SUCH AUDIT REPORT ALONG WITH THE RETURN THE SAME H AS NOT BEEN PROPERLY CONSIDERED BY THE LOWER AUTHORITIES. SIMI LARLY I AM OF THE CONSIDERED OPINION THAT ASSESSEE IN THE INTEREST OF JUSTICE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO SUBSTANTIATE THAT HE HAS RECEIVED RENT FROM THE AGRICULTURAL LAND WHICH FALLS UNDER AGRICULTURAL INCOME U/S 2(1A) OF THE INCOME-TAX ACT 1961. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTIC E I DEEM IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSES SING OFFICER WITH THE DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE A SSESSEE TO SUBSTANTIATE HIS CASE. THE ASSESSING OFFICER SHALL DECIDE BOTH THE ISSUES AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVI NG DUE ITA 6614/M/09 MR VISHAL DUTT ========== 4 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE AR E ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. PRONOUNCED IN THE OPEN COURT ON 21ST DAY OF MAY TWO THOUSAND AND TEN SD/- ( R K PANDA ) ACCOUNTANT MEMBER MUMBAI DATED 21ST MAY 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-XXXIII MUMBAI 4. THE CIT- XXII MUMBAI 5. THE DR SMC BENCH. //TRUE COPY// / / TRUE COPY / / BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI *CHAVAN ITA 6614/M/09 MR VISHAL DUTT ========== 5 DATE INITIALS DRAFT DICTATED ON 18 .05.2010 SR. P.S. DRAFT PLACED BEFORE THE AUTHOR 18.05.2010/ 19.05.2010 SR. P.S. DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER AM/JM DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM APPROVED DRAFT COMES TO THE SR. PS SR. P.S. KEPT FOR PRONOUNCEMENT ON SR. P.S. FILE SENT TO THE BENCH CLERK SR. P.S. DATE ON WHICH FILE GOES TO THE HEAD CLERK DATE OF DISPATCH