The Commissioner of Income Tax and The Deputy Commissioner of Income Tax vs M.R. Sampanghiramaiah (HUF)

K.L. Manjunath, J.—The present appeal is by the revenue challenging the order in ITA No. 2346/Bang/2004 passed by the ITAT dated 2-6-2006. The appeal was admitted on following substantial questions of law:

Whether 1/10th amount of Rs. 220 lakhs declared by the assessee has its income derived from agriculture should be accepted despite the assessee not producing any evidence to show the actual expenditure incurred for generating such an income nor producing any evidence to show that this income was derived by the assessee from sale of products grown in these agricultural lands and consequently recorded a perverse finding?

Whether the Appellate Authorities were correct in not examining the evidence in support of the claim that the assessee had agriculture income during the current assessment year without there being any material in support of such a claim and by relying on mere conjectures and surmises of orders passed for earlier years when each assessment year was a separate entity and especially when agriculture income depended on various uncertain circumstances like water, weather, material, illness, yield, marketability of the product, market acceptance of the product etc, when there was no evidence to support such a claim and consequently recorded a perverse finding?

Whether the Appellate Authorities were correct in holding that the Assessing Officer has estimated the agriculture income of the assessee by considering the evidence collected for the earlier assessment year when the assessee has not produced any evidence to show that there was improvement in maintenance of the farm, excess land brought under agriculture operation, increase in productivity and increase in prices of agriculture produce compared to previous year?

Whether the Appellate authorities were correct in reversing the finding of the assessing officer that the conclusion that the excess agricultural income declared by the assessee was nothing but income of the assessee chargeable to tax under the head ''Income from other Sources'', as income derived by the assessee from other sources?

During the course of argument it was brought to our notice that in respect of the assessee family for the earlier year of assessment, this Court in I.T.A. No. 420/2001 dated 11-12-2007 has remanded the matter only to consider the income from selling the coconut considering the yield of 150 nuts per tree per year and confirmed the order of the Tribunal in respect of other horticultural fruits. In view of the same, the learned Counsel for the revenue contends that the present case also requires to be remanded to the Assessing Officer to consider the value of the coconut derived by the assessee during the relevant year taking the yield as 150 nuts per tree per year.

Per contra Mr. Shankar, learned Counsel for the assessee contends that there is no necessity for this Court to remand the matter to re-consider the case of the coconut as the documents had been produced before the First Appellate Authority to show the market value of the coconut which was net available in the case remanded earlier. At page 33 of the appeal papers, we notice that the assessee has adopted the rate of each coconut at Rs. 4/- during the relevant assessment year and HOPCOMS which is a recognised Government organisation has shown in its sales statistics the value of coconut at Rs. 6/- per nut during the relevant period. Based on the same the first Appellate Authority has accepted the valuation shown by the assessee. The same is also confirmed by the Tribunal. As rightly pointed out by Sri. Seshachala, if the Appellate Authorities had no occasion to consider the sales statistics maintained by the Government Department we could have remanded the matter to the Assessing Authority for fresh consideration in the present case also. Since such exercise has been done by the First Appellate Authority in the instant case and which has also been confirmed by the Second Appellate Authority, we are of the view that there is no necessity to remand the matter to the Assessing Officer to consider the value of the coconut during the relevant assessment year. Therefore, we do not see any merit in this appeal. Accordingly, following the order of this Court in ITA 420/2001 dated 11-12-2007 the present appeal has to be dismissed.

We have also noticed that in all there were 18 appeals before the Commissioner of Income Tax (Appeals) but as against 18 appeals, appeals are preferred only in 10 matters by revenue. In the remaining 8 matters the revenue has not challenged the orders passed by the authorities. All the 18 appeals before CIT(A) were filed by the co-owners of the agricultural lands and the agricultural income has been divided as per their respective shares. Therefore, if the revenue has accepted the orders of the CIT(Appeals), in respect of few co-owners they cannot be permitted to challenge the agricultural income in respect of the remaining co-owners. In view of the same the present appeal is dismissed.