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2018 (1) TMI 851 - AT - Income TaxAgricultural income not accepted - assessee submitted some voucher mentioned the cash receipts of sale of such potatoes - AO was not sure about the genuiness of the vouchers - Held that - As decided in assessee s own case for Asst. Year 2001-02 2012 (1) TMI 337 - ITAT AHMEDABAD the accounts maintained by the assessee for agricultural activities suffer from certain defects. The agricultural income declared by the assessee deserves reduction. Respectfully following the aforesaid judgment of the co-ordinate bench, we treat ₹ 5,00,000/- as agriculture income and rest of the income to be treated as income from other sources . Disallowance of tender fees paid to GSFC - Held that - CIT(A) has rightly treated the above said amount as capital expenditure because same was spent for expending the business. Addition on sum received from Post Office - AO held that assessee has not produced any documentary evidence to show that it was refund of monthly saving scheme - Held that - As AR has shown us Passbook of Post Office containing the entry in question; therefore, we allow this ground of appeal in favour of the assessee. Disallowance being 1/5th of car maintenance expenses and depreciation on motor car - CIT(A) has held that in his opinion personal use of car cannot be ruled out - Held that - In the absence of any evidence, ld. CIT should not have given such findings. On the basis of whims no disallowance can be made. Therefore, we allow this ground of appeal in favour of the assessee. Addition of conveyance allowance u/s.10(14) ignoring 1/5th of car expenses and depreciation is concerned - Held that - AO no other withdrawal for expenses were made by the appellant. As per the AO since the appellant has not incurred any amount of conveyance allowance and therefore he was requested to explain as to why the claim of deduction of ₹ 52,000/- be not disallowed. Ld. CIT(A) confirmed the action of the AO and disallowed the conveyance of allowance of ₹ 52,000/-. The appellant in his submission himself submitted that above allowance is being received from company every month as part of remuneration and hence the same partakes the character of special allowance contemplated in section 10(14) of the act. However, the appellant has not been able to prove that the allowance has been received by him to meet the expenses incurred wholly, exclusively and necessarily in performance of his duties. Therefore, we dismiss this ground of appeal. Disallowance in respect of Court Fee Refund - AO added this amount on the ground that the appellant has deducted court fees refund but he did not furnish the details and reasons for such claim - Held that - Since appellant has failed to furnish the details and reason from such claim during the course of assessment proceedings as well as before the CIT(A). Therefore, we dismiss this ground of appeal. Insurance claim - Held that - AO in the assessment order for the year under consideration had mentioned that the appellant had received ₹ 15,410/- as insurance premium and had shown in other income. As per the AO in the revised return of income, the appellant had claimed the same as deduction and had not furnished any reason from the same. In our opinion insurance claim is revenue receipts and lower authority has rightly confirmed the addition
Issues Involved:
1. Legality of the notice issued under Section 251(2) after a significant lapse of time. 2. Treatment of agricultural income as income from other sources. 3. Disallowance of income from the sale of potato seeds. 4. Confirmation of additions and enhancements made by the Assessing Officer (AO). 5. Disallowance of tender fees as capital expenditure. 6. Addition of Post Office Monthly Saving Scheme receipts as concealed income. 7. Disallowance of car maintenance expenses and depreciation. 8. Disallowance of replacement of truck tires as revenue expenditure. 9. Disallowance of conveyance allowance under Section 10(14). 10. Initiation of penalty proceedings under Section 271(1)(c). Detailed Analysis: 1. Legality of Notice Issued under Section 251(2): The appellant argued that the notice issued under Section 251(2) for enhancing the assessment was illegal due to the significant time lapse. The Tribunal dismissed this ground, stating that the Income Tax Act does not prescribe a time limit for the Commissioner of Income Tax (Appeals) to decide the appeal. 2. Treatment of Agricultural Income: The main contention was the AO's rejection of the agricultural income declared by the assessee, particularly the inclusion of ?6,33,592 from the sale of potato seeds. The AO disallowed this income due to doubts about the genuineness of the vouchers provided. The CIT(A) further enhanced the income by treating ?56,49,542 as income from other sources. The Tribunal referred to a previous ITAT order for AY 2001-02, which had accepted similar agricultural income claims. Consequently, the Tribunal allowed ?5,00,000 as agricultural income and treated the rest as income from other sources. 3. Disallowance of Income from Sale of Potato Seeds: The AO disallowed ?6,33,592 from the sale of potato seeds due to doubts about the authenticity of the vouchers. The CIT(A) confirmed this disallowance. The Tribunal, referring to a previous ITAT order, allowed ?5,00,000 as agricultural income and treated the remaining income as income from other sources. 4. Confirmation of Additions and Enhancements: The CIT(A) had treated ?56,49,542 as income from undisclosed sources due to the appellant's failure to produce relevant records and documentary evidence. The Tribunal, referring to previous ITAT orders, allowed this amount to be treated as agricultural income. 5. Disallowance of Tender Fees as Capital Expenditure: The CIT(A) treated ?33,000 paid as tender fees to GSFC as capital expenditure, which was upheld by the Tribunal, reasoning that the expenditure was for expanding the business. 6. Addition of Post Office Monthly Saving Scheme Receipts: The AO added ?22,633 received from the Post Office Monthly Saving Scheme as concealed income. The Tribunal allowed this ground of appeal in favor of the assessee after being shown the relevant passbook entries. 7. Disallowance of Car Maintenance Expenses and Depreciation: The CIT(A) disallowed ?14,442 and ?12,756, being 1/5th of car maintenance expenses and depreciation, assuming personal use of the car. The Tribunal overturned this disallowance, stating that no disallowance should be made on mere assumptions without evidence. 8. Disallowance of Replacement of Truck Tires: The CIT(A) disallowed ?52,200 for the replacement of truck tires, treating it as capital expenditure. The Tribunal upheld this disallowance, noting that the appellant had capitalized the amount and had not claimed it as revenue expenditure in the return of income. 9. Disallowance of Conveyance Allowance under Section 10(14): The AO disallowed ?52,000 as conveyance allowance, and the CIT(A) confirmed this disallowance. The Tribunal upheld the disallowance, noting that the appellant failed to prove that the allowance was received to meet expenses incurred wholly, exclusively, and necessarily in the performance of duties. 10. Initiation of Penalty Proceedings under Section 271(1)(c): The CIT(A) confirmed the action of the AO in initiating penalty proceedings under Section 271(1)(c) for furnishing inaccurate particulars of income and concealing income. The Tribunal did not interfere with this finding. Conclusion: The appeals were partly allowed, with some grounds being upheld in favor of the assessee while others were dismissed. The Tribunal's decisions were largely based on precedents from previous ITAT orders for similar issues in earlier assessment years.
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