9911796707
TMI Blog2014 (12) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, the due date for filing the appeal before the Income Tax Appellate Tribunal was 19/04/201. An appeal could not be filed within the due date on account of the following factors: 2.1 There was no regular Commissioner posted at Kottayam at the time of the receipt of the order. The Commissioner of Income-tax, Ernakulam was holding the additional charge granted approval for filing the appeal. Immediately, thereafter, Commissioner of Income-tax, Ernakulam handed over the additional charge of Kottayam to the Commissioner of Income-tax, Trivandrum. Since then the Assessing officer and the other official concerned were on Election duty. Following the elections, there were continuous holidays. Based on these grounds and considering the fact that the delay in filing appeal is only 7 days, the Ld. DR requested that the delay in filing the appeal may be condoned and appeal accepted. 3. The Ld. AR has not raised any serious objection for condonation of delay in filing the appeal by the Revenue. 4. We have heard both the parties and perused the record. We find that there exists reasonable cause for not filing the appeal in time and the reasons advanced by the Revenue for the delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timation of income of Rs. 6 lakhs from 150 acres, bringing to tax the balance of Rs. 17,07,737/- as income from 'Other Sources'. 7.1 Before the CIT(A), the assessee submitted that the estate was located in remote area and therefore the only mode of settlement was by cash and in such a situation, the commission agent was produced before the Assessing officer who confirmed that he purchased coffee and other cash crops from assessee on cash basis. It was also submitted that the plantation of the assessee is located in the traditional area and the average production per hectare is 0.88 MT and the gross production for the area of 150 acres is 44 MT whereas the Assessing officer estimated the production at 0.116 MT per hectare which is without basis. 7.2. In the remand report, the Assessing officer found that the assessee's estate was located in an area which has the least yield and therefore the estimation of 5.94% is reasonable. 7.3 After going through the remand report and the submissions of the assessee, the CIT(A) observed that the estate owned by the assessee was within the Annamalai region and the extent of the estate was 150 acres. According to the CIT(A), the Assessing office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome earned by the assessee. As per the remand report, the extent of coffee planted area is much less than what was claimed by the assessee and also the yield of coffee is very low in that area. Being so, the Ld. DR submitted that the order of the Assessing officer is to be confirmed. In support of his contention, the Ld. DR relied on the following case law: i) Sumati Dayal vs. CIT (1995 AIR 2109) (SC). ii) CIT vs.Durga Prasad More (82 ITR 540) (SC). iii) Vazhakala Estate vs. State of Kerala (1994) 210 ITR 451) (Ker.) 11. We have heard both the parties and perused the record. There is no doubt that the assessee is cultivating coffee plantation in 150 acres. The Assessing officer estimated the agricultural income at Rs. 4000/- per acre which worked out Rs. 6 lakhs as against the estimation of income by the assessee at Rs. 23,07,737/-. Against this, the CIT(A) considered the agricultural income at Rs. 8252/- per acre working out at Rs. 12,37,850/-. In our opinion, when the assessee has not maintained proper books of accounts regarding actual income generated from the coffee plantation, it is inevitable that the estimation of income is to be done. The CIT(A), after considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any reason to interfere with the finding of the Assessing officer. According to the CIT(A), the Assessing officer had noticed disproportionate increase in expenditure when compared to the earlier year and he has allowed a part of the said increase as genuine. According to the CIT(A), the disallowance was made on account of lack of proper evidence/documents to vouch for the expenses especially in the face of a disproportionate increase. Accordingly, the CIT(A) confirmed the action of the Assessing officer in allowing only 20% of the increase and telescoping the same against the agricultural income treating the same as income from "Other Sources". 16. We have heard both the parties and perused the record. The disallowance was made by the Revenue authorities on account of lack of proper evidence like vouchers/bills produced by the assessee in support of the expenditure. When the assessee claims any expenses, it is the duty of the assessee to prove that the expenses were actually incurred for the purpose of earning income. In this case, there is every chance of inflating expenses incurred for agricultural purposes to business purposes. If the assessee has placed necessary evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the CIT(A), the assessee submitted that operative result for the year ended 31/03/2006 was very positive and net income has increased by Rs. 71.77 lakhs. According to the Ld. AR, the fixed deposits from members has increased by Rs. 51.61 crores but interest on deposit has come down by Rs. 1.95 crores compared to previous year as there was decrease in the rate of interest when compared to previous year. The Ld. AR also submitted that there were variations in the expenditure based on the increased business volume and operation of the company. The salaries and disallowances registered almost Rs. 40 lakhs increases compared to previous year. This was mainly due to increase in staff strength consequent to new regional offices and additional vigilant and internal audit department as this was required for high value security of gold ornaments. The Ld. AR submitted that the above facts were not considered by the Assessing officer and made the disallowance. 19.1 Thus, the assessee submitted that the Assessing officer's disallowance of apportion of the expenditure and telescoping the same with the agricultural income may be deleted. 20. The CIT(A) found that all expenses were duly vouc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch/2010 is also dismissed. 22. The second ground in assessee appeal in I.T.A. No. 241/Coch/2011 is with regard to disallowance of foreign travel expenses. 23. The brief facts of the case are that the assessee has incurred Rs. 7,57,749/- towards traveling expenses of the directors. The details of this were called for during scrutiny. The assessee informed that Rs. 3,99,910/- was incurred towards Business Development Tour of the Directors to USA. However, it was found that the assessee has not produced any document to show that the trip was for purposes of business and no details about the placed visited, people met and their relationship to the business have been produced. The assessee's business is confined to Kerala and therefore the trip to USA could not have been for purposes of business. Accordingly, the Assessing officer disallowed the expenses claimed by the assessee. 24. Before the CIT(A), the assessee submitted that that the assessee's business originated from Kozhencherry in Pathanamthitta district and a considerable amount of fixed deposit is generated from local people who are all non-residents and settled in USA. According to the assessee, in order to have a close in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany are used by the employees and therefore, there was no justification in disallowing the depreciation on an assumption that vehicles were used for personal purpose. 29. On appeal, the CIT(A) confirmed the finding of the Assessing officer that personal elements cannot be ruled out on the use of motor cars and has disallowed only 1/4th of the total expenses. Against this, the assessee is in appeal before us. 30. We have heard both the parties and perused the record. The assessee is a limited company. The lower authorities have disallowed 1/4th of the total expenses on vehicles. The assessee is a limited company and the vehicles are used by the Company for frequent visits to its 78 branches in Kerala for business purpose. Being so, disallowance is not warranted towards depreciation on vehicles for personal use. More so, the running expense of vehicle was allowed by the Assessing officer and it was held that the expenses were incurred solely for the purpose of business. Accordingly, this ground of the assessee in I.T.A. No. 241/Coch/2011 is allowed. The appeal of the assessee in I.T.A. No. 241/Coch/2011 is partly allowed. 31. The first ground in Revenue appeal in I.T.A.No.291/Coc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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