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2016 (2) TMI 409 - KARNATAKA HIGH COURT

2016 (2) TMI 409 - KARNATAKA HIGH COURT - TMI - Addition on account of coffee income and pepper income - Held that:- It is clear that the assessee owns 84.12 acres of coffee in Belagodu area of Sakaleshpur Taluk, Hassan District. The Assessing Officer taking into consideration the climatic conditions and the season coupled with the average yield of the previous three seasons in an area of 84.12 acres in a zone known for high coffee yield, determined the income from coffee. It is also noticed by .....

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assessee. This best judgment assessment made by the Assessing Officer is confirmed by the First Appellate Authority and the Tribunal after extensively considering the arguments of the assessee in the light of the Judgments relied on by the assessee.

As regards the estimate of income from Pepper, it has come to the notice of the Assessing Officer only during his visit to the estate of the appellant on 19.11.2008. Though subsequent to the crop year, presence of the yielding Pepper Vines .....

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ies. It is pertinent to note that the Assessing Officer was assisted by the Managing Partner of the assessees at the time of his visit to the estate and gathered information regarding the yielding Pepper Vines and it is only thereafter, determined that 20% of the Pepper Vines would be given allowance as being affected by yellow disease and arrived at ₹ 5,60,000/- estimating 5 kgs to each vine and valued the same at ₹ 70/- per kg i.e., 1600 Pepper Vines out of 2000. The said assessmen .....

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requirement of Sub-clause (IV) of Rule 9-A, that itself would not be suffice to accept the claim of the assessee regarding the yield of coffee unless the corresponding expenditure towards the labour and other expenses are shown in the account books to substantiate the yield declared. Decision rendered on the factual matrix by the fact finding authorities cannot be disturbed at this stage. - Decided against assessee - CRP No.189/2012 - Dated:- 25-1-2016 - NK PATIL & S SUJATHA, JJ For the Pet .....

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fee income at ₹ 13,53,275/-. The Assessing Officer after issuing notice and hearing the assessee, made addition of ₹ 7,71,000/- to the coffee income and estimated ₹ 5,60,000/- towards pepper income, though pepper income was not declared by the assessee in the returns. Aggrieved by the same, the assessee preferred an appeal before the First Appellate Authority interalia raising other grounds pertaining to the relevant assessment year. The Appellate Authority allowed the appeal i .....

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TA No.205/2010 is challenged in this Civil Revision Petition by the assessee. 3. The petitioner/assessee has raised the following substantial question of law: "Whether on the facts and circumstances of the case, the Tribunal is justified in sustaining the addition of ₹ 7,71,090/- made on account of coffee income by the officer and an addition of ₹ 5,60,000/- made on account of pepper income?" 4. Learned counsel Sri S.P.Bhat appearing for the appellant would contend that the .....

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yield declared by the assessee, more particularly, the cash book is not acceptable for the reason that EB-2 register disclosed the yield of the coffee raised in the relevant assessment year and the cash book would in no way be relevant for determining the yield of coffee, utmost, it may give the estimation towards the expenditure incurred by the assessee. 5. Further, it is contended that the Pepper Vines were not ready for yielding during the relevant Assessment year. The Assessing Officer dete .....

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the yield. The best judgment assessment is based on assumptions and surmises. Accordingly, he seeks to answer the substantial questions of law raised, in favour of the assessee and against the respondent. In support of his contention, learned counsel placed reliance on the following Judgments: (1) B F VARGHESE vs STATE OF KERALA (1969(72) ITR 726 (2) STATE OF KARNATAKA vs M/S V N S CHIDAMBARAM (CRP No.1383/04 disposed off on 04.01.2005) 7. On the other hand, Sri T K Veda Murthy, learned Governme .....

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is declared only at the time of verification of yield by the Assessing Officer. The EB-2 register has no sanctity as it used to, when the Indian Coffee Act was in force. The Books of accounts as prescribed under Rule 9-A of the Rules are required to be maintained to prove the coffee yield during the relevant year. No material evidence was placed by the assessee to substantiate the yield declared by the assessee. In the absence of such material evidence, the Assessing Officer taking into account .....

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aging Partner regarding the yield, and the expenses, has given allowance to the extent of 20% of the Pepper Vines as being affected by yellow disease and estimated the income from Pepper Vines at ₹ 5,60,000/-. This estimation is made by the Assessing Officer only after ascertaining the relevant facts from the Managing Partner of the assessee and is not a guess work. As such, he seeks to dismiss the appeal and to confirm the orders passed by the Tribunal answering the substantial questions .....

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other claim made by the assessee, a revised return was filed by the assessee declaring the coffee at ₹ 39,99,435/-. The average yield of the previous three seasons as noticed by the Assessing Officer works out to 46,565 kgs but appellant has declared only 32800/- kgs during the relevant assessment year. The Assessing Officer taking into consideration the climatic conditions and the season coupled with the average yield of the previous three seasons in an area of 84.12 acres in a zone known .....

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assessed at ₹ 47,70,525/- as against ₹ 32,79,536/- declared by the assessee. This best judgment assessment made by the Assessing Officer is confirmed by the First Appellate Authority and the Tribunal after extensively considering the arguments of the assessee in the light of the Judgments relied on by the assessee. 10. As regards the estimate of income from Pepper, it has come to the notice of the Assessing Officer only during his visit to the estate of the appellant on 19.11.2008. .....

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ment year, which is not forth coming in the orders passed by the authorities. It is pertinent to note that the Assessing Officer was assisted by the Managing Partner of the assessees at the time of his visit to the estate and gathered information regarding the yielding Pepper Vines and it is only thereafter, determined that 20% of the Pepper Vines would be given allowance as being affected by yellow disease and arrived at ₹ 5,60,000/- estimating 5 kgs to each vine and valued the same at &# .....

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