×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
Both the appeals have been filed by the assessees against the separate orders dated 08/12/2016 passed by the Ld. CIT(A)- 2, whereby the Ld. CIT(A) has partly affirmed the assessment orders passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as 'the Act').
2. Both these appeals having common facts and issues, therefore, for the sake of convenience and brevity the facts of ITA No.114/Asr/2017 have been taken into consideration and result of the same should also be applicable mutatis mutandis to ITA No.115/Asr/2017.
3. The Brief facts of the case are that the assessee and his brother Sh. Jagtar Singh (Appellant in ITA No.115/Asr/2017) have been jointly carrying on agriculture activities over the years and during the financial year relevant to the assessment year under consideration derives income from interest on capital with M/s. Guru Teg Bahadur Cold Storage and M/s. Satnam Agro Cold Storage, the sister concerns run by the family. The assessee declared interest income of Rs.2,26,954/- and agricultural income of Rs.18,50,000/-. The assessee also revised its return of income and dec ared the income from short term capital gain to the tune of Rs.45,000/- on account of sale of some immovable property. The case of the assessee came under scrutiny through AIR. In the assessment proceedings, the assessee submitted that in the year under consideration assessee and his bother have grown Potatoes (seed potato and ration potato) on 398 acres of land (27 acres land is owned by them and 371 acres have been taken on lease from different persons). The assessee claimed that total sale proceeds out of 398 acres land cultivated by the assessee and his bother accrued to Rs.8,12,71,018/- and out of which Rs.7,75,71,018/- has been claimed as expenses and net agricultural income of Rs.37 lac has been shown in half shares by the assessee and his brother in their respective returns of income. On examination the sale bills, vouchers and other documents, it was found by the Assessing Officer that during the year under consideration total sales as per sale bills procured from the assessee was Rs.11,77,38,005/- but not Rs.8,12,71,018/- as shown by the assessee, therefore, the balance sales of Rs.3,64,66,987/- was considered to be unaccounted sales i.e. not of agriculture produce grown by the assessee. The assessee was show caused as to why trading profit on the amount of Rs.3,64,66,987/- be not brought to tax. In response to which the assessee vide its reply filed on dated 26.12.2011 narrated the following facts before the Assessing Officer.
i. We dispose of only our own produce by cultivating agricultural lands.
ii. The transfer bills issued in respect of potatoes sent for storage at Tinsukhia of the value of Rs.3,63,94,624/ do not belong to us.
iii. The said potatoes pertain to other agriculturists who grow potatoes on their lands and they all just asked us to store their produce of potato in the cold storage taken on hire by us from Mahabir Cold Storage, Tinsukhia through an agreement dated 16.01.2009. The proof of sending the potatoes belonging to other cultivators are the railway receipts showing the names and addresses of the owners.
iv. The cold store owner to whom the potatoes were sent for storage has misappropriated the produce and has not given us the potato or any money in lieu of potatoes misappropriated by them. We have filed a complaint before the SSP, Kapurthala against the owners of Mahavir Cold Storage from whom we still have to receive Rs.5,20,66,352/-.
v. The fact that the potatoes of other agriculturists were sent through our transfer bills, is evident from the complaint lodged by us with SSP. Kapurthala. The said party was summoned by SHO, Police Station, Kapurthala and investigation is in progress.
vi. The growers whose potato was sent to be stored in the cold storage taken on rent by us have given their affidavits to this effect. The Assessing Officer did not get impress by the explanation/claim of the assessee qua filing of Railway receipts, affidavits of the other farmers and police complaint filed before the SSP, Kapurthala against Mahavir Cold Storage, Tinsukhia and while applying the profit rate @ 10% on the excess sale of Rs.3,64,66,987/- made an addition of Rs.36,46,698/- jointly and Rs.18,23,350 separately against the assessee and his brother.
4. The assessee challenged the said addition before the Ld. CIT(A) , who though upheld the finding of the Assessing Officer to the effect that the receipt of Rs.3,64,66,987/- pertains to the trading receipts on account of sale of potatoes, however reduced the addition of Rs.18,23,350/- to Rs.7,27,898/- while applying the profit rate @ 4% as against 10% as applied by the Assessing Officer. For the sake of brevity and ready reference the concluding part of the order impugned herein is reproduced herein below.
“4.3 I have gone through the assessment order passed by the A.O, detailed submissions made in this regard and material brought on record including judicial citations stated by the appellant and find that an addition of Rs.18,23,350 has been made by the AO on account of unexplained business income