TaxTMI 
TaxTMI 
2015 (2) TMI 537
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....take up assessment year 2004-05, ITA No. 3818/Mum/2013 as lead year and reproduce the grounds of appeal: 1. On the facts and circumstances of the case, although it is accepted that the assessee earns income from agriculture, the CIT (A) erred in accepting the entire income declared as Agricultural Income without appreciating the following - i. The AO had stated in the assessment order that books of account were not found either in Mumbai office of the assessee or in the Farm. Thus the book results were not reliable. ii. The partnership deed shows that the land belonging to the partners was 168.39 acres. However, as per 7/12 extracts submitted by the assessee during the course of remand proceedings, some land was stated to be owned by the employees shown as cultivators. Income from this land cannot be said to form part of the assessee's agricultural income in the absence of any agreement to that effect. No satisfactory explanation was provided by the assessee as to why income from such portion of land should be included in the assessee's hands. iii. A chart showing a portion of the land as pure grass land and without any mention of fruit trees was provided in the....
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.... after considering the same, the AO disallowed the claim of agricultural income and expenses incurred. The AO therefore brought the entire income of Rs. 96,96,725/- to tax. 8. In the survey operation, the AO also found that on the farm house there were 9 horses in the stable and a well made up farmhouse. The AO found that the house and horses were not shown in the books and, he therefore, added as sum of Rs. 1,00,00,000/- u/s 69 of the Act. 9. The assessee approached the CIT(A), who after considering the entire material produced before him, observed, "On the facts & in the circumstances of the case, it is observed that the appellant has disclosed as agricultural income & claimed the exemption u/s 10(1) of Income Tax Act, 1961 in the return filed by appellant dated 19/10/2004 and resubmitted the same return of income u/s 153C on 19/01/2010. 1 The appellant has submitted latest 7/12 extract by land revenue authority which gives details of ownership of land in the name of partners of firm and details of no. and kind of trees in agricultural farm during the year under consideration. 2 The appellant has submitted all details pertaining to ownership of agricultural land along....
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....al subsidy which is credited directly in the bank account of the appellant received from Govt. from the Govt. of Maharashtra The learned AO has completely ignored the fact that the appellant has received Subsidy of Maharashtra certifying that agriculture activity was carried out. 3. Assessment Order for A.Y. 20032004 passed u/s 143(3) of the Income Tax Act, 1961 dated 23/12/2005 showing assessed income as 'Nil' No mention of the said assessment order passed u/s 143(3) by the ITO WD 16(1)(1)-. 4. Assessment Order for A.Y. 20062007 passed u/s 143(3) of the Income Tax Act, 1961 dated 17/11/2008 showing assessed income as 'Nil'. This assessment year falls within the search period No mention of the said assessment order passed u/s 143(3) by the ITO WD 16(1)(1)- 5 Credit sales-Party Confirmations were filed on record during remand proceedings The learned AO ignored all these positive facts of the appellant which clearly establish that agriculture activity were carried out by the appellant. The AO is relying on one fact for denying the benefit of exemption that the appellant is not cultivator. 6. Quantitative details and expenses details....
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....he remand report 11. Fresh Fruits and Vegetables are exempt from sales tax The learned AO ignored all these positive facts of the appellant which clearly establish that agriculture activity were carried out by the appellant. the AO is relying on one fact for denying the benefit of exemption that the appellant is not cultivator 12. Books of Accounts The learned AO has not offered or discussed the said issue, so it is presumed that there is no defect in the Books of Accounts and the learned AO accepts the same. The Book of accounts was maintained manually & whenever it was called for the same was produced the Land AO requested for soft copy so one if was ready they said was made available to him. 7.3 In light of the above discussion, I am of the opinion that the addition made on this account is not proper because the ownership of land and the agricultural activities carried out on these lands are found to be genuine. Hence, the addition made on this ground is deleted. 8. GROUND III: "The learned DCIT also erred in assuming the construction of Bungalow, Swimming Pool, Outhouse and stable for 9 horses at the farm house estimated Rs. 1,00,00,000 was constructed by the ....
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....he revenue authorities, which included 7/12 extracts etc. 16. The AR also defended the order of the CIT(A) in regard to deletion of addition made u/s 69 at Rs. 1,00,00,000/-, that the farm house was purchased with already existing house, etc. including the stable and nine horses. 17. The AR, therefore, submitted that the order of the CIT(A)did not suffer from any infirmity and was correct and deserves to be sustained. 18. We have heard the arguments and have perused the material placed on record and the orders of the revenue authorities. Except for the order of the CIT(A) wherein he mentions about the partners, nowhere do we find as to what is the constitution of the firm. We also do not find from any record as to which partner of the firm owned how much land. We also do not find as to when the agricultural land was purchased and what was there in the sale agreement. All these documents are important and primary, without which it would be difficult to proceed. We find revenue authorities have independently proceeded to pass the orders without reference and elaboration of these primary facts. 19. In the light of the above, we deem it fit that the orders of both the reven....