2006 (7) TMI 728

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....on 143(3) of the Act. The assessee was assessed on total income of Rs. 1,58,325. 3. By order dt. 30th March, 1993 the CIT initiated proceeding against the assessee under Section 263 of the Act. On 4th Nov., 1994 the CIT remanded the case back to the AO by holding that he has not conducted any enquiry as regards to agricultural income of the firm. As per assessee-firm some agricultural income was earned by them individually, which was shown in the capital account. As per the CIT, the ITO should have enquired whether the agricultural income is the income of the assessee-firm or is of the partners of the firm and remanded the matter to the AO. This order was challenged by the assessee-firm by filing an appeal before the Tribunal. The Tribun....

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....learned Counsel for the respondent has vehemently urged that the income of the partners and the income of the firm are two separate income. According to him, the agricultural income, which is shown in the capital account is the independent income of the partners and cannot be assessed in the hands of the present assessee. However, from perusal of the return, it appears that in the return which is at p. 31 of the paper book before the Tribunal, the agricultural land having a value of Rs. 4,41,071 is shown as assets of the assessee. Once the land is shown to be the land owned by the assessee, then the income which is derived from such land normally should be assessed in the hands of the assessee. 8. Shri Ankur Modi, learned Counsel for the....