2012 (2) TMI 668 - AT - Income Tax

Revenue's Appeal Allowed for Additional Evidence; Rule 46A Conditions Not Met. Agricultural Receipts, Land Possession, LTCG Exemption Disputed.

The Revenue's appeal was allowed for statistical purposes due to the admission of additional evidence without fulfilling the conditions laid down in Rule ... - Issues involved:The issues involved in this case are:1. Dismissal of additional evidence by CIT (A)2. Deletion of agricultural receipts as book entries3. Possession of agricultural land as per agreement4. Deletion of LTCG claimed exempt u/s 54B5. Change in utility of land from agricultural to residentialIssue 1: Dismissal of additional evidence by CIT (A)The Revenue appealed against the CIT (A)'s order dismissing additional evidence despite opportunities given to the assessee during assessment proceedings. The AO held that the onus was on the assessee to produce evidence, and if the assessee failed to do so, it was their mistake. The CIT (A) admitted the additional evidence without fulfilling the conditions laid down in Rule 46A, as per the judgment in the case of Manish Build Well Pvt. Ltd. Consequently, the revenue's appeal was allowed for statistical purposes.Issue 2: Deletion of agricultural receipts as book entriesThe AO found that the assessee made bulk sales of agricultural products to associate concerns on credit basis, acquiring shares in return. The AO treated these sales as income from other sources, not agricultural income, due to inflated figures. The CIT (A) allowed the assessee's appeal, but the Revenue contended that the assessee's claim was unfounded and denied the exemption.Issue 3: Possession of agricultural land as per agreementThe AO refused the assessee's claim for exemption on the sale of agricultural land in Ghaziabad, stating that the land's character had changed from agricultural to residential. The CIT (A) admitted additional evidence, but the Revenue argued that the admission was contrary to the conditions laid down in Rule 46A.Issue 4: Deletion of LTCG claimed exempt u/s 54BThe AO denied the assessee's claim for exemption on long-term capital gains, stating that the land was within municipal limits and the character of the land had changed. The CIT (A) allowed the appeal, but the Revenue contended that the exemption was not applicable.Issue 5: Change in utility of land from agricultural to residentialThe Revenue argued that the utility of the land had changed from agricultural to residential purposes, and the assessee had admitted to this change. The CIT (A) admitted additional evidence, but the Revenue contended that the admission was not in compliance with Rule 46A.In conclusion, the Revenue's appeal was allowed for statistical purposes due to the admission of additional evidence without fulfilling the conditions laid down in Rule 46A. The issues of agricultural receipts, possession of agricultural land, LTCG exemption, and change in land utility were all contested in this case.