2023 (6) TMI 83

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....eal:- "1. On facts and circumstances of the case and in law, Ld. CIT (Appeals) erred in law in deleting the addition of Rs.9,45,04,432/- made by the AO treating the agriculture income declared by the assessee as Business income. 2. On facts and circumstances of the case and in law, Ld. CIT(A) erred in law in deleting the addition of Rs.6,72,537/- made by the AO in respect of outstanding liabilities of sundry creditors u/s 41(1) of Income Tax Act 1961. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs.95,84,849/- made under rule 8D(2)(iii) by holding that, for the purpose of calculation of Average value of investment only the investments yielding non t....

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....gricultural land which is utilized by the assessee to cultivate the sugar cane seeds and sell them in the open market. Therefore, it was contended that since income from sale of sugar cane seeds is derived from agricultural land the same has to be treated as agricultural income and as exempt under section 10(1) of the Act. The assessee placed reliance on the decision of the Hon'ble Andhra Pradesh High Court dated 21.02.2014 in ITA. 88/2014 and also the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang Vs. CIT [193 ITR 321 (SC)]. Not convinced with the submission of the assessee the Assessing Officer treated income of Rs.9,45,04,432/- from the sale of sugar cane seeds under the head income from business as against the c....

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....e income as defined under-section 2(1A) of the Act, 1961. Importantly, the income derived from similar and identical activities in the past previous years has been accepted by the revenue without any adverse finding and the same has been treated as agriculture income. The details of the same extracted from submission of the appellant is as follows: A.Y. Income Returned In INR (Loss) Income Assessed In INR (Loss) Agriculture Income as per ITR Accepted Agriculture Income under assessment Assessed under section 2011-12 (21,41,829) (21,41,829) 2,18,80,000 2,18,80,000 143(3) 2012-13 (4,07,19,780) (4,07,19,780) 2,98,34,098 2,98,34,098 143(1) 2013-14 NIL NIL 5,22,46,970 5,22,46,9....

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....ue the matter any further but in respect of some assessment years the matter was taken up in appeal before the Bombay High Court but without any success. That being so, the Revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather than spend the tax payers' money in pursuing litigation for the sake of it," I am of considered view that the impugned addition of Rs.94504432/- treating as business of income against the claim of Appellant as agricultural income and exempt u/s 10(1) of the Act is not justified. Therefore, addition of impugned amount on these grounds is directed to be deleted. Appellant succeeds in these grounds." 6. On a careful perusal of the order of the ld. CIT (Appeals) we do ....

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.... deleted the addition observing as under:- "8.1 I have considered the fact of the case and contention of the AR of the appellant. I have gone through the submission and details of creditors on record. The Law as per the provisions of Section 41(1) of the Act read with judicial pronouncements provide that when a loss on expenditure or trading liability which has been allowed as deduction shall be charged to income in case the assessee has obtained sum benefit in respect of such trading liability by the way of remission or cessation thereof etc. The write off by the assessee in the Books of Accounts unilaterally shall also amount remission or cessation thereof. 8.2 The facts on record provide that there was situation that th....

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.... the creditor, it is not possible for the authority to come to a conclusion that the debt was barred and had become unenforceable. There may be circumstances which may enable the creditor to come with a proceeding for enforcement of the debt even after expiry of the normal period of limitation as provided in the Limitation Act. The principle that expiry of period of limitation prescribed under the Limitation Act cannot extinguish the debt but it will only prevent the creditor from enforcing the debt is well- settled. Mere entry in the books of account of the debtor made unilaterally without any act on the part of the creditor would not enable the debtor to say that the liability had come to an end. Apart from that that would not by....