The ACIT, 1 (1), v. M/s Betul Commercil Ltd,

ITA 68/IND/2009 | 2005-2006
Pronouncement Date: 13-07-2010 | Result: Dismissed

Appeal Details

RSA Number 6822714 RSA 2009
Assessee PAN AAACB6089P
Bench Indore
Appeal Number ITA 68/IND/2009
Duration Of Justice 1 year(s) 4 month(s) 25 day(s)
Appellant The ACIT, 1 (1),
Respondent M/s Betul Commercil Ltd,
Appeal Type Income Tax Appeal
Pronouncement Date 13-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 13-07-2010
Date Of Final Hearing 12-07-2010
Next Hearing Date 12-07-2010
Assessment Year 2005-2006
Appeal Filed On 18-02-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.68/IND/2009 A.YS. 2005-06 ASSTT. COMMISSIONER OF INCOME TAX 1(1) BHOPAL APPELLANT VS. M/S. BETUL COMMERCIAL LTD. 53 NEW ITWARA ROAD BHOPAL PAN AAACB 6089 P RESPONDENT APPELLANT BY : SMT. APARNA KARAN SR. DR RESPONDENT BY : NONE O R D E R PER JOGINDER SINGH THE REVENUE HAS CHALLENGED THE ORDER OF THE LEARNED CIT(A) DATED 3.12.2008 ON THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. DELETING THE ADDITION OF RS.8 26 520/- MADE BY THE ASSESSING OFFICER BY DISALLOWING THE AGRICULTURAL RECEIPTS AND TREATING THE SAME AS INCOME FROM DISCLOSED SOURCES. 2 2. DELETING THE ADDITION OF RS.80 000/- ON ACCOUNT OF LUMP-SUM DISALLOWANCES OF EXPENSES CLAIMED BY THE ASSESSEE COMPANY. 2. THE FIRST GROUND RAISED BY THE REVENUE PERTAINS TO DISALLOWING THE AGRICULTURAL RECEIPTS WHICH WERE TREATED BY THE LD. ASSESSING OFFICER FROM UNDISCLOSED SOURCES. DURING HEARING OF THIS APPEAL MRS. APARNA KARAN LD. SR. DR WAS PRESENT FOR THE REVENUE AND NOBODY W AS PRESENT FOR THE ASSESSEE. IT IS SEEN THAT ON 26.4.2010 ALSO NOBODY WAS PRESENT FOR THE ASSESSEE CONSEQUENTLY SERVICE WAS TO BE EFFECTED THROUGH THE DEPARTMENT. HOWEVER IT WAS CLAIMED BY THE LD. SR. DR THAT LETTER WAS SENT TO THE ASSESSING OFFICER BUT AS SUCH THERE IS NO RESPONSE FROM HIS SIDE WHETHER THE SERVICE HAS BEEN EFFECTED OR NOT. IN VIEW OF THIS FACT WE HAVE NO OPTION BUT TO DISPOSE OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE CRUX OF ARGUMENTS ADVANCED BY THE LEARNED SENIOR DR IS IN SUPPORT OF THE ASSESSMENT ORDER BY FURTHER SUBMITTING THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE EXPE NSES WERE INCURRED BY THE ASSESSEE FOR AGRICULTURAL OPERATIONS THEREF ORE IT WAS RIGHTLY TREATED AS INCOME FROM UNDISCLOSED SOURCES. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. SR. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BRIEF FACTS ARE T HAT THE REVENUE IS AGGRIEVED ON ACCOUNT OF DELETING THE DISALLOWANCES CLAIMED TO BE MADE BY THE ASSESSEE WHICH WERE INCURRED FOR EARNING AGR ICULTURAL OPERATIONS/INCOME. IT IS SEEN THAT ON BEHALF OF TH E ASSESSEE THERE WAS 3 A COMMUNICATION DATED 28.11.2007 ADDRESSED TO THE L D. ASSESSING OFFICER WHEREIN IT WAS EXPLAINED THAT HOW THE CLAIM ED FIGURE WAS ARRIVED AT AND THE SAME IS REFLECTED AT SCHEDULE V OF THE B ALANCE-SHEET AND PROFIT & LOSS ACCOUNT FILED BY THE ASSESSEE BEFORE THE DEPARTMENT. IT HAS BEEN FURTHER CLAIMED THAT THESE EXPENSES ARE NOT ME RELY FOR ONE YEAR RATHER IT IS A TOTAL SUM OF EXPENSES INCURRED FROM 1992-93 TO 2004-05 (FOR A PERIOD OF 12 YEARS) FOR PLANTATION PURPOSES ON THAT PORTION OF THE LAND WHICH WAS HARVESTED DURING THE YEAR. IT HAS A LSO BEEN MENTIONED THAT THESE EXPENSES WERE REGULARLY SHOWED IN THE BA LANCE-SHEET OF RELEVANT YEARS AND HAD BEEN ASSESSED AS SUCH BY TH E DEPARTMENT. IN VIEW OF THESE FACTS THE CONTENTION OF THE REVENUE THAT NO DOCUMENTARY EVIDENCE WAS FURNISHED FOR THE SALES OF AGRICULTURA L PRODUCE SEEMS TO BE UNJUSTIFIED. THE ASSESSEE PLANTED EUCALYPTUS TREES ON 35.29 HECTARES OF LAND. THE SALES WERE CLAIMED TO BE PROPERLY VOUCHED WHICH WERE SUPPORTED BY WEIGHBRIDGE RECEIPTS. IT IS ALSO A FAC T THAT OWNERSHIP OF LAND OR EXISTENCE OF PLANTATION AT ANY TIME DURING A PERIOD OF 12 YEARS WAS NOT DISPUTED BY THE REVENUE. EVEN DURING ASSESS MENT YEARS 1990- 91 & 1991-92 THE ASSESSEE WAS SUBJECTED TO DISALLO WANCE OF EXPENDITURE OF RS.15 662 & RS.5 436/- RESPECTIVELY ON THE GROUND THAT THESE RELATED TO EXPENSES ON THE PLANTATION PROJECT AND THIS DISALLOWANCE WAS UPHELD IN FURTHER APPEAL MEANING THEREBY THE EXISTENCE OF FARM IS NOT IN DISPUTE. THE SAPLING AN D SEEDS WERE 4 PURCHASED FROM CHHATTISGARH INVESTMENT LTD. AND THE AMOUNT OF RS.15 000/- WAS RAISED BY THE SUPPLIER. THE PROOF O F THE SAME WAS ALSO PRODUCED BY THE ASSESSEE. SINCE THE SALE WAS VERIFI ABLE AND THE TREES ARE NOT IN DISPUTE THEREFORE THERE IS NO MERIT IN THIS GROUND OF THE REVENUE CONSEQUENTLY WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. CIT(A). THEREFORE THIS GROUND OF THE APPEA L OF THE REVENUE IS DISMISSED. 4. THE NEXT GROUND PERTAINS TO LUMP-SUM DISALLOWANC E OF RS.80 000/- OUT OF THE EXPENSES CLAIMED BY THE ASSESSEE. AFTER HEARING THE SUBMISSIONS FROM LD. SR. DR WHO SUPPORTED THE ASSE SSMENT ORDER IT IS SEEN THAT THE YEAR-WISE CHART OF EXPENSES WAS FURNI SHED BEFORE THE LD. ASSESSING OFFICER. THE OBSERVATIONS AND THE ARGUMEN TS ADVANCED BEFORE THE LD. CIT(A) ARE REPRODUCED HEREUNDER: 3. THE APPELLANT IS NEXT AGGRIEVED ON ACCOUNT OF THE DISALLOWANCE OF RS.80 000/- (LUMP-SUM @20%) OF EMPLOYEES REMUNERATION AND ADMINISTRATIVE EXPENSES. IN THIS REGARD IT IS SUBMITTED THAT THE APPELLANT HAD SUBMITTED A YEAR-WISE CHART OF EXPENSES TO THE A.O. ALONG WITH THE COMMUNICATION IN REPLY TO THE NOTICE DATED 2.7.2007 (COPY ATTACHED). THIS SHOWS THE TOTAL EXPENSES FOR THE YEARS ENDED ON 31.3.2002 31.3.2003 31.3.2004 AND 31.3.2005 AS RS.499853.89 RS.440694.57 RS.458423.16 AND RS.459797.59 (AFTER ADJUSTING PLANTATION COST OF RS.717368.80) RESPECTIVELY. THIS SHOWS THAT EXPENSES HAVE MORE OR LESS BEEN STAGNATING IN THE REGION OF RS.4 40 000/- TO RS.5 00 000/- AND THE EXPENDITURE DURING THE YEAR AT RS.4 59 797.59 IS ON THE LOWER SIDE OF 5 THE SPECTRUM. THIS AMOUNT COMES TO RS.38 316/- PER MONTH. IT IS ARGUED THAT LOOKING TO THE SIZE OF THE COMPANY THIS AMOUNT IS ENTIRELY JUSTIFIABLE. THIS INCLUDES ALL EXPENSES INCLUDING DEPRECIATION AUDIT FEES TRADE LICENCES AND PROFESSION TAX REGISTRAR OF COMPANIES FEES LISTING FEES ETC. APART FROM OTHER EXPENSES WHICH ARE INCURRED BY ALL BUSINESSES. IT IS AVERRED THAT ALL THE EXPENSES ARE PROPERLY VOUCHED AND HAD BEEN PRESENTED AT THE TIME OF HEARING AND THERE ARE NOT PERSONAL EXPENSES CHARGED TO COMPANY ACCOUNT. THIS HAS ALSO BEEN CERTIFIED BY THE AUDITORS. IT IS ADDED THAT LOOKING TO THE SIZE OF THE BUSINESS AND THE LOCATION OF COMPANYS OFFICE IN KOLKATA THIS AMOUNT IS ENTIRELY JUSTIFIE D AND IN FACT ON THE LOWER SIDE. IF THE TOTALITY OF FACTS ARE ANALYSED WHEN THE AGR ICULTURAL INCOME OF THE ASSESSEE HAS BEEN ACCEPTED NATURALLY THERE ARE EXP ENSES ALSO WHICH ARE CLEARLY ALLOWABLE THEREFORE THERE IS NO JUSTI FICATION OF LUMP-SUM DISALLOWANCE OF 20% OF SUCH EXPENSES CONSEQUENTLY ON THIS GROUND ALSO THE STAND OF THE LD. CIT(A) IS JUSTIFIED. THU S THIS GROUND IS ALSO DISMISSED. FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13 TH JULY 2010. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH JULY 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE !VYAS!