2024 (7) TMI 653

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....in the circumstances of the appellant's case. 2.1 The learned CIT[A]/NFAC failed to appreciate that the income derived by the appellant is from agriculture operations, which is exempt u/s. 10[1] of the Act read with explanation of section 2[1] of the Act and consequently, the learned CIT[A]/NFAC ought to have deleted the addition made in the assessment order and accepted the Nil income reported by the appellant. 2.2 The learned CIT[A]/NFAC is not justified in holding that the appellant had not furnished any submissions alongwith documentary evidence against the finding of the A.O., although the appellant had filed written submissions along with the documentary evidences, which are reproduced in the appellate order and thereby is not justified upholding the addition of Rs. 87,39,282/- under the facts and in the circumstances of the case. 2.3 The learned CIT[AJ/NFAC failed to appreciate that the income derived by the appellant from agriculture operations were accepted in a scrutiny assessment for the immediately preceding year and therefore, there was no justification to reject the claim of the appellant for exemption u/s. 10[1] of the Act under the facts and in the circums....

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....of the assessee by observing as follows: - "The company has incurred expenditure exceeding Rs. 20,000/- per day and paid it in cash, however, name of the person, address etc., have not been furnished. The company is in the habit not providing any information sought for from the department. The quality of the print take by the company of bank statement is very difficult to identify the date, cheque no, name of the person and amount involved. No supporting documents in support of Note No 2(2) to 21 of 44AB report has not been furnished with the letter dated 27.12.2019. In view of this payment for sales received by the company through cheque could not be verified as the information was also given only on 27.12.2019 just three days before the time barring date for completion of assessment by 31.12.2019. In the absence of the relevant documentary evidences the claim for income from Agriculture cannot be accepted. For these reasons the income of the company is brought to tax under the income from other sources. Accordingly, the assessment is concluded by making an addition of Rs. 87,39,282/- under the income from other sources and thereby disallowing the claim of income from Agricult....

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....d Accountant. The AO has also accepted the source of agricultural income in the past and also brought to our attention to pages 31 to 38 of the paper book wherein the copy of the order of the Hon'ble ITAT 'B' Bench, Bangalore in the own case of the assessee for the AY 2009-10 in ITA No. 879/Bang/2014 dated 28.12.2015, as held to be agricultural income. Further, the learned A.R. drew our attention to pages 43 to 45 of the paper book, i.e., the assessment order made U/s 143(3) for the AY 2016-17 dated 13.12.2018 passed in the own case of assessee in which the same income is held to be agricultural income under the similar facts and circumstances and submitted that the rule of consistency should by followed by the Revenue. 7. The learned D.R., on the other hand, supported the orders of the authorities below and submitted that as no details were furnished before the AO with regard to the nature and source of income accordingly the source could not be properly explained by the assessee. The authorities below has rightly treated the income under the head 'Income from Other Sources' amounting to Rs. 87,39,282/-. 8. We have heard the rival contentions and perused the material on reco....

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....of the Act is not dependent on a claim made through a return of income, since a charge of tax can only be on total income and total income cannot include therein any agricultural income. Explanation 3 to Section 2(1A) of the Act which defines agricultural income clearly states that income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income. Said Explanation has been inserted by Finance Act, 2008, w.e.f. A. Y.2009-10. Impugned assessment year being 2009-10, Explanation was squarely applicable. However, what we find is that none of the lower authorities had gone into the claim of the assessee that income from saplings and seedlings grown in a nursery was eligible for exemption u/s. 10(1) of the Act, has already been mentioned above. Question of disallowance of any expenditure may become irrelevant if income of the assessee is considered agricultural in nature. Similarly the question of computation of book profit may also not arise once income of the assessee is held to be agricultural in nature, since it would not come within the scope of total income. Nevertheless since none of the lower authorities have considered these issues, I am of th....