2019 (6) TMI 591

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rder dated 01.01.2019. 3. Aggrieved by the order of CIT(A)-3, Bangalore, dated 01.01.2019 for Assessment Year 2014-15, the assessee has preferred this appeal wherein it has raised the following grounds: 1. General Ground 1.1. The learned Income Tax Officer, Ward- 1, Ramanagar ('A0') has erred in passing the assessment order under section 143(3) of the Income Tax Act, 1961 ('the Act') in the manner passed by her and the Commissioner of Income Tax-(Appeals)-3 ('CIT(A)') has erred in confirming the said assessment order. The said order being bad in law is liable to be quashed. 2. Re-categorization of agricultural income as non- agricultural income chargeable under the head Income from other Sources - Tax effect - Rs. 8,85,675 2.1 The learned CIT(A) has erred in law and facts by re-characterizing the income amounting to Rs. 37,50,000 claimed to be earned by the assessee from agricultural operations and recomputing the agricultural income of the appellant at Rs. 7,97,750 and treating the balance amount of Rs. 29,52,250 as income from other sources. 2.2. The learned CIT(A) has erred in relying on the RTC and the MA to conclude that no agricultural activity wa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uring acer and 5 guntas and the appellant would he buying and selling cocoons (trading) in so far as the remaining income is concerned. 2.11. The learned CIT(A) has erred in law and facts to the extent of concluding that the income from sericulture activity as partially agricultural in so far as being related to cultivation of mulberry leaves on an ad hoc basis. 2.12.The learned CIT(A) has erred in concluding that expenses upto*40 percent to 50 percent are incurred in earning income from sericulture activities, without any basis and further concluding that no such income can be earned without the help of labour. 2.13. The learned CIT(A) has erred in not appreciating that income from sale of coconuts did not entail any expenses as a result of the contract for the removal, sale, upkeep and transportation of the coconuts being given to outside parties. Therefore, the income received is offered as such. 2.14. The learned CIT(A) has erred in concluding that the appellant has other sources of income merely on presumptions, surmises and conjunctures and that the same has been falsely claimed as agricultural income. 2.15. The learned CIT(A) has erred in levying interest unde....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ned AR placed reliance on the decision of the Hon'ble Karnataka High Court in the case of S. L. Basavaraj Vs. ACIT (2015) 61 taxmann.com 67 (Karn) to contend that the agricultural income declared by the assessee cannot be rejected if there is only a marginal increase in the said income during the relevant year as compared to earlier years. Reliance was also placed on the decision of the Hon'ble Allahabad High Court in the case of CIT Vs. Landmark Innovation (P) Ltd., (2013) 38 taxmann.com 217 (Allahabad) to contend that where agricultural activities on land was accepted for earlier years, same could not be doubted in the subsequent year in the absence of cogent evidence. 6.1.2 The learned AR, referring to the details filed by the assessee in Paper Book (pages 1 to 170), submitted that the AO conducted enquiries with the Village Accountant by issuing notice under section 133(6) of the Act dated 07.12.2016 calling for details of crops grown by the assessee, as there was no crop information mentioned in the RTC's i.e., the land records. In reply thereto, report dated 12.12.2016 was submitted by the Revenue Inspector, Village Accountant; including the Mahazar report by the Village Ac....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....essee regarding the carrying out of agricultural activities and sale of agricultural produce. The CIT(A) was also of the view that the AO has not based his / her conclusions on the fact that any agricultural operations carried out on such land, could not be considered agricultural activity. This finding of the CIT(A) has not been disputed by Revenue. Therefore, the fact that the JDA was entered into and the agricultural lands were converted for non-agricultural purposes has no relevance in the case on hand. 6.4 The next issue for consideration is whether the assessee HUF carried out agricultural operations during the year. In this regard, it is seen that the AO, in the course of assessment proceedings, conducted enquiries with the village accountant by issue of notice under section 133(6) of the Act dated 07.12.2016 calling for details of crops grown in each survey number of agricultural land. In response thereto, the Village Accountant and Revenue Inspector have submitted their reports dated 12.12.2016 giving survey number wise details of cultivation carried out / crops grown; including other details along with statements of neighbouring cultivators to the effect that the assess....