2017 (5) TMI 712

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... several grounds in her appeal, however, the crux of the issue is that the learned Commissioner of Income-tax (Appeals) has erred in confirming the order of the learned Assessing Officer who had rejected the claim of the assessee for having earned agricultural income of Rs. 10,66,010 by treating it as income from other sources. 3. The brief facts of the case are that the assessee is an individual earning income from business and profession filed her return on income on February 3, 2011 for the relevant assessment year admitting income of Rs. 13,65,979 which comprised of agricultural income Rs. 10,49,510. The case was selected for scrutiny and finally assessment was completed under section 143(3) of the Act on March 20, 2013, wherein the le....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssessee and her associates in order to avoid dividend tax. The learned Assessing Officer also came to the conclusion that the amount received by the assessee along with her associates is nothing but dividend received from the companies and therefore brought the amount of Rs. 10,66,010 to tax under the head "Income from other sources". 5. On appeal, the learned Commissioner of Income-tax (Appeals) after examining the issue in detail confirmed the order of the learned Assessing Officer by observing as under : "15. I have considered the remand report furnished by the Assessing Officer and the counter arguments of the appellant against the findings of the present Assessing Officer. After analysing all the relevant facts and the evidences on ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....resting to note that the sale proceeds of agriculture produce for the earlier years too have not reached the appellant so far. The agriculture income which the assessee has reflected in her return of income is the notional income only. 16. Hence, keeping in view the above facts and the circumstances of the case and also considering the findings of the Assessing Officer in the assessment order and the remand report, I am of the considered opinion that the appellant is neither the owner of the agricultural land nor did she carry out any agriculture operations directly or directly under her supervision which could have enabled her to claim the amount of Rs. 10,49,510 as agriculture income. As a result, the action of the Assessing Officer is ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... cannot be termed as illegal, however it appears to be sham because of the following reasons : "(1) The lease rent paid to the land holding companies/HUF by the assessee and the other individuals who had taken the land on lease is only Rs. 500 per acre per annum, which is too low and not in parity with the agricultural income earned by the lease holders. (2) All the shareholders of the land holding companies are the lease holders of the land owned by the companies which is in proportion to the shares held by them. (3) The decision of the company to lease the land is not in the interest of the company which is a distinct legal entity for profit but a modus operandi to pass on the income derived from agricultural operation from the land....