D.b. Income Tax Appeal v. The Commissioner Of Income Tax-Iii, Jaipur & Another

1 D.B. INCOME TAX APPEAL NO. 288/2010 & D.B. INCOME TAX APPEAL NO. 260/2010 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JAIPUR BENCH, JAIPUR JUDGMENT (1) D.B. INCOME TAX APPEAL NO. 288/2010 SMT. SUSHILA MEENAVS. THE COMMISSIONER OF INCOME TAX-III, JAIPUR &ANOTHER. AND (2) D.B. INCOME TAX APPEAL NO. 260/2010 SMT. SUSHILA MEENAVS. THE COMMISSIONER OF INCOME TAX-III, JAIPUR &ANOTHER. DATE OF JUDGMENT : 18.04.2012 '-HONBLE MR. JUSTICE NARENDRA KUMAR JAINIHON'BLE MR. JUSTICE MAHESH BHAGWATI Mr. Naresh Gupta, for the appellant. Ms. Mahi Yadav on behalf of Mr. Sameer Jain,for the respondents. Heard learned counsel for the parties. 2.Both the appeals of appellant are directed against common order dated16.06.2010 passed by Income Tax AppellateTribunal, Jaipur Bench 'SMC', Jaipur (hereinafter referred to as 'the Tribunal')relating to Assessment Years 2003-04 and2004-05, therefore, the same are beingdisposed by this common judgment. D.B. INCOME TAX APPEAL NO. 288/2010D.B. INCOME TAX APPEAL NO. 260/2010 & 3.D.B. Income Tax Appeal No. 260/2010relates to Assessment Year 2003-04 and D.B.Income Tax Appeal No. 288/2010 relates toAssessment Year 2004-05. The appeal relatingto Assessment Year 2004-05 has been disposedoff by Commissioner of Income Tax(Appeals) onthe basis of appellate order passed inAssessment Year 2003-04, therefore, the factsof D.B. Income Tax Appeal No. 260/2010,relating to Assessment Year 2003-04, arebeing given. 4.Assessee filed return declaringincome of Rs. 93,622/- plus agricultureincome of Rs. 2,83,976/-. The assesseesubmitted revised return of income declaringincome of Rs. 93,622/- plus agricultureincome of Rs. 4,07,822/-. The assessingofficer has mentioned the details ofagriculture income and expenses shown by theassessee in Para No. 6 of the assessmentorder. The assessing officer came to aconclusion that depreciation claimed of Rs.75,977/ seems to be not justified, as theassessee is doing dairy farming businesssince 1994-95, but till financial year 2000-01, she did not claim any depreciation andshe has only two cows and buffaloes,therefore, looking to the past history of the 3 D.B. INCOME TAX APPEAL NO. 288/2010 & D.B. INCOME TAX APPEAL NO. 260/2010 case and facts of the case, disallowed thedepreciation of Rs. 75,977/-. 5.The assessee shown Rs. 65,000/- asother misc. income on account of sale ofanimals, dogs, addu leafs, padi, wood etc.,but the same was not accepted by theassessing officer on the ground that sale ofabove items are not covered as agriculturalproducts, therefore, other misc. income ofRs. 65,000/- included in the agriculturalincome by assessee was treated as income ofthe assessee from undisclosed sources andtaxed as income from other sources. 6.Same is the position in the Assessment Year 2004-05. Depreciation of Rs.67,873/- claimed by the assessee wasdisallowed by the assessing officer. Othermisc. income of Rs. 62,250/-, included inagriculture income, for sale of animals,dogs, addu leafs, padi, wood etc. was treatedas income of the assessee from undisclosedsources and taxed as income from othersources. 7.Being aggrieved with the assessmentorder, the assessee preferred an appeal. TheCommissioner of Income Tax(Appeals)-III,Jaipur[hereinafter referred to as 'CIT(A)']disallowed the claim of the assessee in D.B. INCOME TAX APPEAL NO. 288/2010 &D.B. INCOME TAX APPEAL NO. 260/2010 Assessment Year 2004-05. Depreciation of Rs.67,873/- claimed by the assessee wasdisallowed by the assessing officer. Othermisc. income of Rs. 62,250/-, included inagriculture income, for sale of animals,dogs, addu leafs, padi, wood etc. was treatedas income of the assessee from undisclosedsources and taxed as income from othersources. 7.Being aggrieved with the assessmentorder, the assessee preferred an appeal. TheCommissioner of Income Tax(Appeals)-III,Jaipur[hereinafter referred to as 'CIT(A)']disallowed the claim of the assessee in D.B. INCOME TAX APPEAL NO. 288/2010 &D.B. INCOME TAX APPEAL NO. 260/2010 respect of depreciation, as the appellant didnot produce the original bills relating topurchase of air coolers etc. and it was heldthat assessing officer was justified indisallowing the depreciation claimed on thepurchase of building and air coolers. Theorder passed by the assessing officer wasconfirmed. The same finding was recorded byCIT(A) in respect of Assessment Year 2004-05. 8.So far as treating of Rs. 65,000/-of appellant's undisclosed income as incomefrom other sources, is concerned, the CIT(A)held that the assessing officer was notcorrect in treating the same as income fromother sources. However, CIT(A) examined thematter in respect of 'production expenses'and after detailed discussion in respect ofappellant's agricultural income, came to aconclusion that balance amount of Rs.1,07,417/- is to be treated as assessee'sincome from other sources. 9.On further appeal by the assesseebefore the Tribunal, the Tribunal vide itsorder dated 16.06.2010 held that so far asissue of depreciation is concerned, the sameis restored back on the file of the assessingofficer. So far as question regarding D.B. INCOME TAX APPEAL NO. 288/2010 &D.B. INCOME TAX APPEAL NO. 260/2010 'production expenses' incurred on agriculturereceipts is concerned, the Tribunal observedthat CIT(A) has enhanced the agriculturalincome, therefore, it cannot be said thatthere is an enhancement of taxable income.The finding of CIT(A) in respect of estimateof agricultural income was held to be fairand reasonable. Para No. 12, 23 and 25 ofthe order passed by the Tribunal arereproduced as under: “12. Hence the issue ofdepreciation is restored back onthe file of the A.O., to considerExpl. 5 to section 32 and givesopportunity to assessee toproduce original vouchers ofcooler and exhaust fan and toconsider the valuation report inrespect of building if vouchersare not produced. For verifyingthe quantum of expenditure &period of construction the A.O.will be at liberty to refer thematter to valuation cell as perlaw. 23. I have considered thesubmissions of the Ld.A/R andthat Ld.D/R. The agricultureincome was estimated by Ld.CIT(A)at 3,00,405/- as against Rs.2,55,171/- estimated by A.O.Hence the agricultural income hasbeen enhanced by the Ld.CIT(A)and hence it cannot be said thatthere is an enhancement oftaxable income. Taxable incomeas a result of increase inagricultural income as computedby A.O. has been reduced byLd.CIT(A) and hence there is nocase of enhancement. 25. From above sequence of billsand showing of fruit sales in the 23. I have considered thesubmissions of the Ld.A/R andthat Ld.D/R. The agricultureincome was estimated by Ld.CIT(A)at 3,00,405/- as against Rs.2,55,171/- estimated by A.O.Hence the agricultural income hasbeen enhanced by the Ld.CIT(A)and hence it cannot be said thatthere is an enhancement oftaxable income. Taxable incomeas a result of increase inagricultural income as computedby A.O. has been reduced byLd.CIT(A) and hence there is nocase of enhancement. 25. From above sequence of billsand showing of fruit sales in the last fortnight of March, it isclear that entries in books ofaccountdonotinspireconfidence. I have also gonethrough the photocopy of salebills of food grains and expensesand I feel that entries in booksof account do not inspireconfidence. Hence one was leftto estimate the expenses to findoutestimatedagriculturalincome. The method adopted byLd.CIT(A) can not be had asincorrect as the Ld.CIT(A) hasfairly estimated the expenses. Ifeel that finding in respect ofestimate of agricultural incomeis fair & reasonable and theaction of Ld.CIT(A) is requiredto be confirmed.” 10. We have considered the submissions of learned counsel for the parties in thelight of reasons assigned by CIT(A) as wellas the Tribunal and we find that thequestions involved in the present appeals arerelating to questions of facts and nosubstantial question of law is involved inthese appeals. Income tax appeal can beadmitted only on substantial question of lawand in our view, no substantial question oflaw is involved in these appeals. Hence,both the appeals are dismissed with no orderas to costs. 11.A copy of this judgment be placed onrecord in connected file. (MAHESH BHAGWATI),J. (NARENDRA KUMAR JAIN-I),J. Manoj. D.B. INCOME TAX APPEAL NO. 288/2010 &D.B. INCOME TAX APPEAL NO. 260/2010 “All corrections made in the judgment/order have beenincorporated in the judgment/order being emailed.” MANOJ NARWANI JUNIOR PERSONAL ASSISTANT.