THE ACIT, CIRCLE-2, BHARUCH vs. M/S. KANAKA INFRATECH LTD., ANKLESHWAR

G1-Es" 3144r 34lafy 3fequr WRa >urydia Ta # In THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT sf HuA Jat;, =41f4m %ar4 va sft 31 4t Hlal; cuT %ery & HAI BEFORE SHRI C.M.GARG, JM AND SHRI O.P.MEENA, AM 3E 3dd %/ITA Nos 1259 & 1260/AHD/2016 fer *f Assessment Years: 2006-07 to 2007-08 Shri Pratapsinh Ranjitsinh Rajput, Prop. Of Shri Nilkanth Quarry Works, At-Degam, Tal:- Chilhli Dist, Navsari. PAN ACAPRO226K 3dlareff/ Appellant Vs The Asst. Commissioner of Income-Tax, Navsari Circle-1 , Navsari. 5cr2ff , Respondent 3dareff -1 311 # / Appellant by Shri Rajesh MUpadhyay 9cyeff #1 31k # / Respondent by Shri Rahul Kumar; Sr. DR Jaars & Trr Date of Hearing 28.12.2017 q4u1 TrT Date of Pronouncement: 11.01.2018 3481 ORDER PER SHRLQ PMEENAAM: These two appeals by the assessee are directed against the two separate orders of Learned Commissioner of Income Tax (Appeals) (CIT-(A)), Valsad dated 05.03.2014 confirming the penalty u/s.271(1)(c) of the Act for the assessment year 2006-07 and 2007-08 2 ITA Nos.1259 & 1260/AHD/2014 for A.Ys: 2006-07 & 2007-08 ITA No: 1259/AHDI2014 for AY: 2006-QZ: 2 Ground No. 1,,2 & 3 relates to confirming the penalty of Rs.1,65,589/- imposed u/s.271(1)(c) of the Act ignoring the fact that the quantum appeal of the assessee was pending before the Tribunal: 3 that the Assessing Officer noticed that the The short facts are assessee has shown agricultural income of Rs.9,57,810/- for the assessment year under consideration. However , the assessee has failed to furnish full name and complete address of the purchasers to whom vegetables have sold nor details of mango production. Hence, the entire agricultural income shown by the assessee was treated as income from business. Being aggrieved, the assessee went in appeal before the CIT(A) wherein the CIT(A) has allowed relief of Rs.3,50,000/- and confirmed the balance of addition of Rs.6,07,810/- the Assessing Officer levied a penalty of Rs.1,65,589/- on Accordingly , of Rs.6,07,810/- against which the assessee filed an unexplained income appeal before the CIT(A) who also upheld the action of the Assessing Officer: 4 Being aggrieved, the assessee has filed the appeal before uS We have heard both the parties and find that the CIT(A) has upheld the penalty on the ground that the claim of agricultural income being genuine was not proved as the assessee has failed to give name of the purchasers of agricultural produce and also bills were at inflated sale price as per information received from APMC Bilimora: On the other hand, the Authorised Representative referred para 7 and 13 of the Tribunal order in the case of the assessee in ITA 3 ITA Nos-1259 & 1260/AHD/2014 for A.Ys: 2006-07 & 2007-08 No.435 8436/AHD/2011 dated 31.03.2015 wherein para 7 and 13 of the order, the Tribunal observed that the Assessing Officer not disputed the land holding of the assessee but disputed income from vegetables. It was also further observed that the expenses of cultivation comes to 25% to 31%. The Tribunal has also observed that the rates can vary depending on the availability of produce in market on a particular day. Since the assessee, has sold the vegetables on retail basis, therefore, rates of APMC cannot be applied in the case of assessee The CIT(A) after considering the estimated income from vegetables allowed a relief of Rs.3.50 lakhs: The Authorised Representative , further, pointed out that in para 13 of the Tribunal order (supra) , it has been observed that income from sale of mango at Rs.2,79,560/- for the A.Y. 2006-07 and Rs.2,80,000/- for the A.Y. 2007-08 was not disputed. 5 _ We have gone through the finding of the CIT(A), and find that the Ld.CIT(A) has referred Block No.2033 and 2038 of agricultural land on which mango trees were planted during the year only. Therefore , they cannot yield any income from mangoes. However; it is noticed from the assessment order and appellate order that the assessee has not claimed any income from said Block of land in respect of sale of mangoes: Hence , observation of CIT(A) are misplaced We, further, find that the Id.Authorised Representative has placed reliance in the case of Shri Keshavbhai B, Tandel in ITA No.1215/AHD/2007 and 3266/AHD/2009 dated 09.09.2010 wherein it was held that mere estimate of agricultural income and disallowance of expenses would not per-se prove ITA Nos.1259 & 1260/AHD/2014 for A.Ys: 2006-07 & 2007-08 that the assessee has concealed the particulars of income or filed inaccurate particulars of income. However , the Id Departmental Representative argued that the decision of Tribunal is not applicable in the present case. On the careful consideration of the facts, we find that disallowance of agricultural income was made by the Assessing Officer without bringing any positive and cogent evidence on record_ The disallowance so made was also reduced in appeal: Therefore this is a case of estimate of income and not a positive concealment of income, as no concrete evidence has been surfaced. It is trite se law that penalty proceedings are distinct from the assessment proceedings, the disallowance made in the assessment proceedings is not conclusive and has a persuasive value only. The addition in this case was sustained on estimated basis and the claim of the assessee was not found agreeable by the Assessing Officer, therefore, it is not a case of levy of penalty. Our view iS also supported by the decision in the case of Reliance Petro 2010 322 ITR 158 SC wherein the Hon'ble Supreme Court has held that merely because the assessee has claimed the expenditure which claim was not accepted or was not acceptable by the Revenue, penalty u/s.271(1)(c) of the Act cannot be attracted. The Hon'ble Supreme Court further observed that mere disallowance of claim made by the assessee, cannot amount to furnishing of inaccurate particulars of income, unless the information as given in the Return of Income was found to be incorrect or inaccurate_ 6_ Considering the above facts, we are of the considered opinion that it is not a fit case for levy of penalty uls.271(1)(c) of the Act Hence, penalty of 5 ITA Nos.1259 & 1260/AHD/2014 for A.Ys: 2006-07 & 2007-08 Rs.1,65,589/- u/s.271(1)(c) for A.Y. 2006-07 is cancelled. Accordingly, the ground No.1, 2 & 3 of appeal are allowed. ITA No:1260/AHDI2014 for AY: 2007-08-(by assessee) 7 In view of the findings given in respect of A.Y.2006-07, the penalty of Rs.1,78,257/- u/s.271(1)(c) confirmed by the CIT(A) is also cancelled as the facts are para materia of the facts as discussed above for A.Y. 2006-07 in the case of the assessee 8 In the result; both the appeals filed by the assessee for the A Ys.2006- 07 & 2007-08 are allowed_ Order pronounced in the open court on this 11th day of January, 2018 l - l - (C.M.GARG) (O.P MEENA) duT HaF4 ACCOUNTANT MEMBER 7ufs Hrr4 / JUDICIAL MEMBER YTT Surat; ferolia5 Dated 11th January, 2018 Gangadhar uter d qafaft Bfa/Copy of_the Order is forwarded to 1. 39lareff The Appellant; 2 Tcreff / The Respondent; 3 HTer 3rIFa(3tTal) / The CIT(A)- Valsad, Surat; 4 faaratv 9afafa, 3144 39aiy 3f84r7u, goj DR, ITAT, Surat; 5 JIS G34 Guard file. 31T381TTR/ BY ORDER, Tru4a4fa / /l / (8 aoa fa -fad Sr Private Secretary 3RTar 3tlal 3f847uT, FRT ITAT, Surat 4arye5 qular a1r exdriy 317u T 74ia, Fd, 39kir