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TMI Blog2009 (12) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... e according to him agriculture expense of Rs.13,297/- is incurred to earn agricultural income of Rs.3,61,477/- requires a detailed verification. 3. In reply to the aforesaid notice, the assessee vide letter dated 18.12.2008 submitted as under :- We had submitted all the details relating to agriculture income and agriculture expenses alongwith proof of holding of agriculture land and on this basis only the Assessing Officer had come to conclusion and which has been stated by him in the body of assessment order itself all this fact are apparent and on the record in view of this we request you Sir not disturb the assessment order passed by the Assessing Officer in support of this we rely on the following decisions :- (1) CIT -vs.- Arvind Jewelers (2003) 256 ITR 502 (Guj.); (2) Manjunathesware packing products and camphor works. 4. On receipt of aforesaid reply, the ld. CIT, Valdsad vide order dated 16.03.2009 held that assessment completed on 20.09.2006 under section 143(3) of the Act is erroneous in so far as it is prejudicial to the interest of revenue for the reasons given in para 3 of the impugned order, which reads as under :- 3. On perusal of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITO has made the following observations:- The house-hold withdrawal shown amounting to Rs. Nil because his wife is a teacher and entire salary of her used for household expenses for the family of SIX members is found to be reasonable, looking to the standard of living of the assessee as also keeping in mind the fact that some of the basic requirement is being made out of the agriculture activities carried out by the asssssee, The A.O seems to be satisfied that the assessee has shown no withdrawal for household expenses because he was supported by the salary of his wife. He has also written that some of the basic requirements of the assessee's family of 6 members is met out of the agricultural activities carried out by the assessee. However, it may be pointed out that the source of agricultural income for the assessee is from sugarcane. Hence, it is not understood as to how some of the basic requirements of the family were being met out of this production. It is also seen from the records that a salary certificate in the name of Smt. S.S. Bhoya , Assistant Teacher, C.P.S. Silvassa, dtd.25.09,2006 is also on record. This certificate signed by the Educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in so far as it is prejudicial to the interest of the revenue u/s. 263. (2) There are other issues decided in the order u/s. 263 for which no notice u/s. 263 was given. 7. The assessee filed a paper book containing 19 pages, which inter alia includes show cause notice issued, reply of the assessee and details of agriculture expenses and agriculture income, copy of the letter dated 14.12.2005 addressed to the A.O. during the course of assessment proceedings. The ld. counsel of the assessee pointed out that as per notice under section 263 dated 21.11.2008, it is clear that proceedings were initiated only in respect of detailed verification of agriculture expenses of Rs.13,297/-, which can be seen what is mentioned in the show-cause notice under section 263. It was further submitted that this point was examined by the A.O, which is evident from the letters dated 18.12.2008 and 25.02.2009 to the ld. CIT, the assessee had stated as under :- 18.12.2008 We had submitted all the details relating to agriculture income and agriculture expenses along with proof of holding of agriculture land and on this basis only the assessing officer had come to conclusion and which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported in 98 TTJ 154, the Hon'ble ITAT, 'D' Bench, Ahmedabad held that when A.O. having examined all materials, therefore, the order of Assessing Officer cannot be said to be erroneous and prejudicial to the interests of revenue. (b) In the case of Charak Pharmaceuticals reported in 99 TTJ 1217, the Hon'ble ITAT, 'A' Bench, Mumbai held that when Assessing Officer having called for the details and explanations with regard to the claim for full deduction of expenses during the assessment proceedings and allowed the same after verifying the details, explanations, documentary evidence, etc., then his assessment order cannot be said to be erroneous and prejudicial to the interests of the revenue. (c) In the case of Mrs. Khatiza S. Oomemrbhoy reported in 100 ITD 173 (MUM.)/ 101 TTJ 1097,the Hon'ble ITAT, Mumbai held that powers vested in Commissioner under section 263 are extraordinary powers and completed assessment proceedings cannot be reopened unless there is some cogent material to show that there is total non- application of mind on part of Assessing Officer or that Assessing Officer has committed any glaring mistake of fact or law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- (i) This was second sugarcane crop on the same seeds which is referred to as Ratoon (lam). For growing sugarcane seeds are sown and after the first crop the sugarcane is cut and without again sowing second crop grows from the same roots. Therefore, no such expenditure was incurred. (ii) In all sugar mills runs on co-operative lines, atleast in Gujarat as the sugar mills are owned by agriculturist members the sugar factory itself bears the cutting and transportation expenses and deducts a reasonable amount from the sale, proceeds to be given to farmer-members. In this case, they are mentioned on page 14 and 15 of sale bill and the amount involved is Rs.5040 + Rs.670/- i.e. Rs.6,010/-. This is deducted from the sale bill as it is not incurred by the agriculturists. (iii) In Union Territory the Adivasis get subsidy from 25% to 40% in seeds and fertilizers. (iv) From Daman Ganga Lift Irrigation Project, water is available at a concessional rate of Rs.30/- per month regardless of the quantity taken. 10. From the above, it can be seen that in respect of agriculture land of the assessee, hardly any expenditure was required to be incurred. The expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requires details verification. However, in the impugned order under section 263, the ld. CIT observed that (1) On perusal of the assessment records it is seen that the assessee Shri Sitaram Bhai Jivyabhai Gavli was engaged in the business of running a Bar cum Restaurant in the name of Sakarvan Tourist Restaurant, Silvassa. (2) From a perusal of the trading and Profit Loss account it is seen that the assessee is barely eaming any net profit from this activity. In percentage terms it only amounts to 1.29% of the total turnover. The A.O. has made done any enquiries into this aspect of the assessee's business. He had accepted the profits shown without any application of mind. (3) From the balance sheet of the assessee it is seen that the assessee had a number of investments in land. No verification has been done to find out when the properties were purchased whether the correct value has been shown, It also needs to be examined whether the assessee is liable for wealth Tax. (4) In the assessment order, the A.O. stated that necessary details in respect of agricultural expenses had been filed by the assessee. But vide order sheet entry dated 25.09.2006, the A.O. had written ..... X X X X Extracts X X X X X X X X Extracts X X X X
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