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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: HON’BLE KUL BHARAT & HON’BLE MANISH BORAD
out of the order u/s 143(3) of the Income Tax Act 1961(In short the ‘Act’) dated 26.02.2016 framed by ACIT, Khandwa.
As the issues raised in this two appeals are common, therefore these were heard together and are being disposed off by this common order for sake of convenience and brevity.
Assessee has raised following grounds of appeals; (i) Shri Satinder Singh Khandpure Assessment Year 2013-14 1- The learned CIT (Appeals) has erred in confirming the additions made by the learned Assessing Officer who has assessed total income of Rs. 63,86,894/ - and Agriculture Income of Rs. 8,29,346/- against returned income of Rs. 49,37,640/ - and agriculture income Rs. 22,78,600/ -, which is wrong illegal and 2. Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 unwarranted.
2- The learned CIT(Appeals) has erred in confirming the reduction in Agriculture Income from 22,78,600/- to 8,29,346/ - and Agriculture income treated as income from other sources Rs. 14,49,254/-, which is wrong illegal and unwarranted.
3- The appellant reserves to add, alter or delete any ground of appeal at the time of hearing. (ii) Shri Bhupendra Singh Khandpure Assessment Year 2013-14 1- The learned CIT (Appeals) has erred in confirming the additions made by the learned Assessing Officer who has assessed total income of Rs. 63,71,510/- and Agriculture Income of Rs. 8,29,346/- against returned income of Rs. 49,22,257/- and agriculture income Rs. 22,78,600/-, which is wrong illegal and unwarranted.
2- The learned CIT(Appeals) has erred in confirming the reduction in Agriculture Income from 22,78,600/- to 8,29,346/- and Agriculture income treated as income from other sources Rs. 14,49,254/-, which is wrong illegal and unwarranted.
3- The appellant reserves to add, alter or delete any ground of appeal at the time of hearing.
Brief facts of the case as culled out from the records are that 133 acre of agriculture land situated at Gram Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 Piplod, Tehsil Khandwa is jointly cultivated by three persons namely Shri Satinder Singh, Shri Bhupendra Singh and Smt. Amrit Kaur. Present appeal relates to two assessee’s namely Shri Satinder Singh and Shri Bhupender Singh. Apart from non agriculture income earned by both the asseessee’s which is not in dispute, exemption has been claimed for agriculture income of Rs.22,78,600/- by each of the two assessee’s being 1/3rd share. Disallowance has been made out of the agriculture income by treating some portion as Income from other sources.
For the purpose of adjudication we will t take up the facts of Shri Satinder Singh Khandpure . E-return was filed on 30.09.2013 declaring income of Rs.49,37,640/- and agriculture income of Rs.22,78,600/-. Case selected for scrutiny under CASS followed by serving of notices u/s 143(2) and 142(1). Ld. A.O while examining the genuineness of the agriculture income of Rs.22,78,600/- called for the Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 details of vouchers and agriculture produce. Assessee is the owner of 42 acres of land. Bills and the vouchers for agriculture produce of Rs.37,17,383/- from 133 acre of land were placed before Ld. A.O. Assessee claimed that it has also earned agriculture income from sale of soyabean, fruits and vegetables for which no “mandi receipts” is available. Ld. A.O however was not convinced with the submissions made by the assessee and he following the judgment of Hon’ble Punjab and Haryana High Court in the case of CIT V/s Jarnail Singh Karta 316 ITR 160 (2009) computed the agriculture income at Rs.27,88,037/- after deducting 25% of the gross receipt as agriculture expenses. One third of Rs.27,38,037/- i.e. Rs.9,29,346/- was accepted as agriculture income in the hands of the assessee. The remaining amount i.e. the agriculture income shown in the income tax return at Rs.22,78,600/- minus agriculture income of Rs.9,29,346/- computed by Ld. A.O that is Rs. 14,49,254/- was added to the income as income from other sources and assessed accordingly. 5 Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 6. Aggrieved assessee preferred appeal before Ld. CIT(A). However Ld. CIT(A) after considering the submissions of the assessee dismissed the grounds of appeal raised by the assessee and confirmed the addition of Rs.14,49,254/-.
Now the assessee is in appeal before the Tribunal.
Ld. Counsel for the assessee at the outset submitted that the issue is covered by the decision of Co-ordinate Bench, Indore in assessee’s own case for Assessment Year 2010-11 vide dated 19.10.2016 wherein the Hon’ble Tribunal has accepted the assessee’s contention of having some agriculture income not supported by any bills and vouchers looking to the land holding of the assessee subject to disallowance of 30% of such agriculture sale not supported by bills. Working note of computation of agriculture income has been placed on record after applying the direction of the Hon’ble Tribunal given for preceding assessment year i.e. 2010-11. 6 Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017
On the other hand Ld. Departmental Representative vehemently argued supporting the orders of lower authorities.
We have heard rival contentions and perused the records placed before us.
The assessee’s sole grievance is against the finding of both the lower authorities treating the agriculture income of Rs.14,49,254/- as income from other sources. There is no dispute to the fact that the assessee along with Shri Bhupendra Singh and Smt. Amrit Kaur owns 133 acres of agriculture land at Tehsil Khandwa used for agriculture operations. Assessee disclosed the net agriculture income of Rs.22,78,600/-. During the course of assessment proceedings assessee was able to produce the proof of sale of agriculture produce for Rs.37,17,383/- (for total 133 acre of land). After deduction of 25% of incidental expenses the net income Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 for 133 acre land was calculated by the Ld. A.O at Rs. 27,88,037/- and 1/3rd of this amount comes to Rs.9,29,346/- which was accepted by the revenue authorities as the share of the agriculture income by the assessee. However the assesse claimed exemption for agriculture income of Rs.22,78,600/- the difference (Rs.22,78,600/- less share of income of agriculture income computed by the Ld. A.O at Rs. 9,29,346/-) which comes to Rs.14,49,254/- has been treated as income from other sources by both the lower authorities.
Ld. Counsel for the assessee referred to the decision of Co-ordinate Bench in assessee’s own case for Assessment Year 2010-11 wherein the issue with regard to sale of agriculture products without bills and vouchers was considered and 30% of such sales was treated as income from other sources by the Tribunal observing as follows;
“9. We have heard the rival submissions and have gone through the orders of the lower authorities and perused the material available on record. We find that the assessee has shown agricultural income sales at Rs. 15,60,000/- which includes 8 Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 Rs.6,00,000/- including Rs.2,55,750/- being sales of wheat and soyabean shown at higher price as compared to Mandi sales. These sales are in the nature of on spot sales made effected outside Mandi to private parties. We find that the assessee has agricultural land holding at 40 acres of irrigated agricultural land. The assessee has also filed confirmation of parties i.e. agriculturist, to whom sales was made. Therefore, considering the circumstances and in absence of books of accounts in respect of agricultural produce being not maintained and case laws as relied on by the Assessee, it would be reasonable to estimate 30 of the sales amounting to Rs.6,00,000/- to private parties as non- explained agricultural income which would be worked out to Rs.1,80,000/-. Accordingly, the addition of Rs. 1,80,000/- is confirmed and the balance addition of Rs.3,11,590/- i.e. [Rs.4,91,590 – Rs. 1,80,000] is deleted. This ground of appeal is therefore, partly allowed”.
In the light of above decision of the Co-ordinate Bench in the assessee’s own case for Assessment Year 2010-11 as well as the fact that assessee has not disputed the incurring of 25% of gross agriculture income as incidental expenses for carrying out agricultural operations, agriculture income of the assessee is computed in the following manner; Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 S.No. Particulars Amount 1 1/3 share of income from the Rs.9,29,346/- sale of agriculture produce duly supported by bills/ vouchers Rs.37,17,383/- Less 25% of expenses = Rs.27,88,037/-.1/3 share of assessee 2 Net agriculture income from sale of agriculture produce not supported by bills/vouchers; Agriculture income declared by the assessee Rs.27,78,600/- Less net agriculture Income from sale of agriculture produce supported by bills/ vouchers Rs. 9,29,346/- Gross sales figure for goods sold without bills & vouchers Rs.18,49,254/- Less:25% for incidental Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017
expenses Rs. 4,62,314/- Rs.13,86,940/- Less:30% disallowance as per the decision of the Tribunal for A.Y. 2010-11 Rs. 4,16,082/- Rs.9,70,858/-
In view of above the agriculture income of the assessee is computed at Rs.19,00,204/- (Rs.9,29,346 + 9,70,858/-). We therefore in the given facts and circumstances of the case as well as respectfully applying the decision of the Co-ordinate Bench in assessee’s own case for Assessment Year 2010-11 are of the view that out of the total claim of agriculture income of Rs.22,78,600/- we allow the claim of agriculture income at Rs.19,00,204/- and confirm the addition for income of Rs.3,78,396/- to be treated as income from other sources thereby partly allowing the assessee’s appeal in the case of Shri Satinder Singh Khandpure, .
Satinder Singh & Bhupender Singh ITANo.463 & 464/Ind/2017 14. Now we take up appeal of the assessee Shri Bhupendra Singh Khandpure, ITANo.464/Ind/2017. As agreed by both the parties are that the facts and figures are the same and the land is jointly owned by three co-owners, we therefore applying our own decision in Para 12 above partly allow the assessee’s appeal by restricting the addition for income from other sources at Rs.3,78,396/- and allow the claim of agriculture income at Rs.19,00,204/- as against Rs.22,78,600/- claimed by the assessee. Assessee gets part relief.
In the result both the appeals of two different assessee’s being are partly allowed.
The order pronounced in the open Court on 29.04.2019.