TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 492
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....e on 28.11.2003 and 01.11.2004 declaring income of Rs. 18,63,160/- and Rs. 26,20,650/- for the assessment years 2003-04 and 2004-05 respectively. Assessments were completed under section 143(3) of the Act. While completing the assessments, Assessing Officer disallowed agricultural expenses to the extent of Rs. 4,98,385/- and Rs. 5,66,276/- holding that assessee credited the agricultural income to its profit and loss account and also debited agricultural expenses and net result being loss in agricultural operations as the loss is not allowable. The Assessing Officer further observed that assessee was cultivating vegetables and such vegetables are utilized in the restaurants maintained by the assessee and therefore assessee cannot make income out of itself. Alternatively, the Assessing Officer held that loss from agricultural activity cannot be allowed as deduction in view of the provisions of section 14A of the Act. The Assessing Officer observed that loss from agriculture being expenditure over income is nothing but an expenditure incurred which is earning an income that is exempted from tax. The assessee filed appeal before the Commissioner of Income Tax (Appeals). Commissio....
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....enance is required and tea plantation yields for a period of 10 to 15 years. iii. The appellant has not maintained or produced books of account for the income/expenditure. Though huge sums ought to have gone through bank transactions, the appellant failed to show by way of bank transactions. iv. The appellant's claim of expenditure for cultivation of vegetables in 2 acres Rs. 13,66,265/- is too far high and even if expenditure on tea plantation is taken into account the said expenditure is on the higher side. v. On posing all the above issues, the appellant was silent over these issues. Alternatively even if the appellant's contention is to be considered the loss from agriculture invite disallowance u/s 14A as the expenditure is not allowable as deduction as it is attributable to earning exempt income. 5.1 During the appeal proceedings the appellant filed letter dated 17.08.2011 enclosing profit and loss account and balance sheet of Vagamon Hide Out and submitted that the consolidated form of vegetable, honey, dairy, farm and poultry is given and all income are from the guests who came to the resort. He argued that the statement of account so submitted are attested by the audit....
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....of the Assessing Officer in allowing depreciation at 5%. 9. Counsel for the assessee before us submits that assessee erected temporary structure and it was demolished in view of the notice given by the corporation. He submits that structures were only temporary structures and therefore claim of depreciation at 100% is justified. Before us, the assessee could not substantiate as to whether the structures are temporary and what kind of construction was erected and when it was demolished, therefore in the absence of any such details the Assessing Officer appears to be justified in restricting the claim of depreciation to 5%.Thus, the grounds raised by the assessee on this issue are dismissed. 10. The last issue in the grounds of appeal of the assessee for the assessment year 2003-04 is that Commissioner of Income Tax (Appeals) erred in holding that matter relating to interest under section 244A is not appealable. In the course of appellate proceedings the assessee raised additional ground contending that Assessing Officer is not justified in withdrawing excess interest granted under section 244A of the Act. The Commissioner of Income Tax (Appeals) dismissed the grounds of appeal of ....
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....der the circumstances, we only consider it fit and proper to, setting aside the impugned order, restore the matter back to the file of the A.O. to allow the assessee an opportunity to plead its case with reference to grant of interest u/s.244A; we having not examined the issue on merits at all, and who shall decide the same per a speaking order; the matter being appealable. We decide accordingly." 12. Thus, in view of the decision of the Mumbai Bench of this Tribunal cited above, the grounds of appeal raised by the assessee is a valid one warranting adjudication by the Commissioner of Income Tax (Appeals). Since the Commissioner of Income Tax (Appeals) has not gone into merits and held that matter is not appealable, we restore the issue back to the Assessing Officer to decide the issue in accordance with law, after providing adequate opportunity to the assessee. 13. The second issue in the appeal of the assessee for the assessment year 2004-05 is that Commissioner of Income Tax (Appeals) erred in confirming the disallowance of advertisement & publicity expenses and office expenses. The Assessing Officer while completing the assessment disallowed Rs. 2,14,700/- under the head 'adv....