K.C.PALANISAMY,COIMBATORE vs. DCIT, COIMBATORE

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ITA 1445/CHNY/2016Status: DisposedITAT Chennai06 March 2018AY 2003-044 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

For AY 2003-04 and AY 2005-06, the Tribunal held that a difference of opinion on the quantum of agricultural income does not constitute concealment or furnishing inaccurate particulars, thus deleting the penalty. For AY 2011-12, the issue was remitted back to the AO for fresh verification of land holdings and cultivation.

What were the facts?

The assessee claimed agricultural income, but the Assessing Officer treated a portion as unexplained cash credit for AY 2003-04 and AY 2005-06. For AY 2011-12, the entire agricultural income claim was disallowed.

What were the issues?

Whether a difference in estimating agricultural income between the assessee and the AO warrants a penalty for concealment of income. Whether the AO properly disallowed the entire agricultural income claim for AY 2011-12 without proper verification.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ A’ BENCH : CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P GEORGE

आदेश / O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

All the appeals of the assessee are directed against the respective orders of the Commissioner of Income-tax (Appeals)-1, Coimbatore and pertain to assessment years 2003-04, 2005-06 & 2011-

12.

Since common issue arises for consideration in all these appeals, we have heard the same together and disposing off the same by this common order. ,1444,1445/CHNY/2016 :- 2 -:

2.

For the assessment years 2003-04 & 2005-06, the assessee is challenging penalty levied u/s.271(1)(c) of the Income-tax Act,1961 (in short ‘the Act’ ) by the ld. Assessing Officer, which is confirmed by the Ld.CIT(A).

The assessee disclosed agricultural income and claimed exemption.

3.

In fact, for assessment year 2003-04 the assessee disclosed agricultural income of `22,92,400/-, out of which the ld. Assessing Officer had taken `2,89,565/- as income from agriculture activities and balance of `20,02,840/- was assessed as unexplained cash credit in the books of accounts of the assessee u/s.68 of the Act. Similarly, for assessment year 2005-06, the assessee has claimed agricultural income of ` 24,87,650/-, out of which the ld. Assessing Officer accepted the agricultural income to the extent of `6,75,628/- and balance of `18,12,020/- was treated as unexplained cash credit in the books of accounts. The question arises for our consideration is when the assessee disclosed the income and claimed as agricultural income and the ld. Assessing Officer treated a part of the income as income not from agriculture, can there be a concealment of income or furnishing inaccurate particulars of income? This Tribunal is of the considered opinion that the assessee disclosed the entire income and claimed exemption as provided in the provisions of the Act. Merely because there was a difference of opinion in estimating the agricultural income between the assessee and the ld. Assessing Officer, it cannot be said that there was a concealment of income or furnishing inaccurate particulars of income. It is not the case of the Revenue that there was no income from ,1444,1445/CHNY/2016 :- 3 -:

agriculture activities. The fact that the assessee is holding agricultural land and cultivating the same is not in dispute. Only dispute is regarding quantum of income from agricultural activities. In those factual circumstnaces, this Tribunal is of the considered opinion that the levy of penalty is not warranted. Accordingly, the orders of the lower authorities are set aside and penalties levied u/s.271(1)(c) of the Act and sustained by the Ld.CIT(A) for assessment years 2003-04 & 2005-06 are hereby deleted.

4.

Now coming to assessment year 2011-12, the assessee disclosed `21,32,540/- as income from agriculture. However, the ld. Assessing Officer disallowed the entire claim of the assessee by treating the same as unexplained income. When the ld. Assessing Officer accepted the agricultural income for assessment years 2003-04 & 2005-06, it is not known why the ld. Assessing Officer is disallowing the entire claim of assessee. The ld. Authorized Representative of assessee submits that the land holding of the assessee is not in dispute and the cultivation of land is also not in dispute, therefore, the AO is not justified in disallowing the claim of agricultural income. This Tribunal is of the considered opinion that the AO has to verify the land holdings for assessment year 2011-12 and the nature of cultivation, thereafter decide the issue of agricultural income. Accordingly, the orders of the authorities below are set aside and the entire issue is remitted back to the file of ld. Assessing Officer. The Assessing Officer ,1444,1445/CHNY/2016 :- 4 -:

shall re-examine the issue and bring on record the land holding of the assessee and the nature of cultivation after verifying the Adangal Register of the village, and thereafter decide the matter on merit on the basis of material that may be filed by the assessee after giving proper opportunity of hearing to the assessee.

5.

In the result, the appeals of the assessee for assessment years 2003-04 & 2005-06 are allowed and the appeal of the assessee for assessment year 2011-12 is allowed for statistical purposes.

Order pronounced on 06th March, 2018, at Chennai.

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