Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI DUVVURU R.L. REDDY & SHRI S. JAYARAMAN
O R D E R
PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBER:
The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-7, Chennai, in /CIT(A)-7 dated 17.10.2016 for the AY 2012-13.
Dr.K.Senthilnathan, the assessee, a Doctor by profession also owned Agricultural Farm Lands at Thandikkudi Village, Dindigul District, Tamilnadu. For the asst year 2012-13, he declared an agricultural income of Rs.48,35,500/-, out of which Rs.5,64,500/- was disallowed and added as an unexplained credit by the Assessing Officer .Aggrieved, the assessee filed an appeal before the CIT(A) and on dismissal filed this appeal.
The ld AR submitted that the assessee is carrying on the agricultural activities for the past 15 years and the following agricultural products are grown in his farm: a) 6,850 Orange Trees with about 200 plants per acre totalling to about 32 acres in which about 4000 trees are 12- 15 years old with best yielding form with average yield of 400 fruits per tree per year, about 1500 trees are with moderate yield with average of 250 fruits per tree per year and about 1350 trees with poor yield with average of 70 fruits per tree per year.
b) 28 acres of Arabica coffee plantation as intercrop with orange trees and with Banana (about 20 acres in orange farm and 8 acres in Banana farm) with an average yield of 320 kilos per acre per year. Coffee in raw form is sold and there is no processing activity. c) Hill plantain is a special and rare variety of Banana (G1- No.B124) which will grow well in Thandikudi. Banana plantation has intercrop of coffee plants. Coffee plants need shade and the necessary shades are provided by orange trees and Banana trees. There are around 3200 Banana Trees in an area of about 8 acres with 350 trees per acre with an average yield of 100 fingers per tree. d) Avagoda trees are big trees and planted over the borders. There are around 195 trees with average income of 1900 per tree per year. e) In addition to the above, there are Avagoda Fruits, Acid Lime, Avarai, Green Peas, Green Beans, Pumpkin, Papaya, Baby Banana Stem were also grown there. In addition to the above Nursery Plants were also sold.
3.1 The assessee sold the farm products in cash only and in the cash memo it is not required to mention the address of the buyer, which is required only in the case of credit sales. However, the appellant in the cash memo entered the particulars of buyer, his address, etc, which is as per the details given by the buyers. When the AO required the particulars, the assessee furnished them as per the records. The AO called for the confirmation from the parties and one of them denied. Therefore, the AO relying on the statement given by the buyer, as mentioned in the cash memo, disowning the purchases rejected the assessee's sale claim and added the corresponding sum at Rs.5,64,500/- as an unexplained credit. The ld AR submitted that since it is a counter Sale and Cash and carry operation, the assessee need not enquire about the veracity of the details given by the buyer as it was only a cash sale and the buyer might have given incorrect particulars. Since it is not a credit sale and only counter cash sales the assessee did not bother to verify the details given by the buyer. In this connection, the ld AR invited our attention to the break up details of agricultural income for the following years and submitted that they were accepted by the AO in the assessee’s scrutiny assessment proceedings:
PARTICULARS A Y 2011-12 A Y 2012-13 A Y 2013-14 A Y 2014-15 Orange Sales 31,90,000 27,56,300 28,35,000 19,64,750 Banana Sales 20,00,000 9,18,132 11,12,000 4,68,500 Avacoda Sales 6,15,750 3,72,525 4,22,000 4,90,000 Coffee Seeds 12,15,000 18,37,568 19,34,000 15,32,250 Sales Fruits & 2,10,000 9,36,875 3,42,000 13,79,500 Vegetables TOTAL RECEIPTS 72,30,750 68,21,400 66,45,000 58,35,000 Farm Expenses 25,00,750 19,85,900 18,55,000 14,90,000 Net Agricultural 47,30,000 48,35,500 47,90,000 43,45,000 Income 3.2 Therefore, the ld AR pleaded that there is sufficient evidence to prove that there is sale of Coffee and the yield can also be corroborated with the Government of India's estimate per acre. The Assessing Officer has not disputed the holding of agricultural lands and has not disputed the agricultural operations carried on by the appellant, which was also supported by the Chitta and Adangals and he invited our attention to the copies filed in this regard. In fact, the assessee won the Ist Prize from the Government of Tamilnadu at the 49th Flower Show held in the year 2010 for the Best Mandarin Orange farm. Further, while disallowing the amount, the assessing officer has not doubted the genuineness of agricultural operations carried on by the assessee, has not rejected the books of account but merely relied on the statement of a buyer only. In view of the above facts and circumstances, the ld AR pleaded that the assessee’s appeal may be allowed. Per contra, the ld DR supported the orders of the lower authorities.
We heard the rival submissions and carefully considered them. It is clear from the above that the assessee is carrying on the agricultural activities for the past 15 years and various agricultural products are grown in his farm. The agricultural land holdings, the agricultural operations carried on by the assessee, the crops grown and the acceptance of almost similar agricultural income under scrutiny assessments for various assessments, supra, prima facie, support the assessee’s claim and the explanation offered on the method and manner of counter sale, supra, also appears plausible. Therefore, we find merit in the assessee’s above submission and hence direct the AO to delete the impugned addition. Thus, the assessee’s appeal is allowed.
In the result, the assessee’s appeal is allowed.
Order pronounced in the Court on 30th August, 2019, in Chennai.