TaxTMI 
TaxTMI 
2025 (12) TMI 1039
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..... 3. The only issue to be decided in this appeal for AY 2015-16 is as to whether the ld CIT(A) was justified in confirming the addition made by the ld AO in the sum of Rs. 15,63,030/- by treating the agricultural income shown by the assessee as taxable income under the head income from other sources in the facts and circumstances of the instant case. 4. We have heard the rival submissions and perused the material available on record. The assessee is a proprietor of M/s. Shakti Automobiles engaged in the business of dealer of Escorts Tractor, motorcycle and lubricants. The assessee filed his return of income for AY 2015-16 on 30.09.2015 admitting the total income at Rs. 41,44,270/-. The ld AO observed that assessee has shown agricultural income of Rs. 20,14,790/- in the return of income. The assessee owns 50.47 bighas of agricultural land. The assessee informed before the ld AO that he had also cultivated 44.19 bighas of agricultural land owned by his brother. The ld AO however observed that since the assessee is engaged in business of sale and purchase of Escorts Tractors, motorcycle and lubricants, it would not be possible for him to cultivate his own agricultural land to th....
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.... agricultural land being subjected to cultivation of crops and deriving agricultural income thereon is not doubted by the revenue. Hence, we are inclined to accept the agricultural income shown by the assessee on proportionate basis to the extent of agricultural lands owned by assessee alone and treat the differential sum as income from other sources in the hands of the assessee. Accordingly, the taxable income and agricultural income of the assessee for AY 2015-16 shall be as under:- Agricultural income shown in the return Agricultural income accepted by ITAT Taxable income 20,14,790 11,30,292 (2014790 X 56.47 / 100.66) 8,84,498 7. Accordingly, grounds raised by the assessee are partly allowed in the above mentioned terms for AY 2015-16. ITA No. 70/AGR/2025 - AY 2017-18 8. The assessee has raised a preliminary legal ground challenging the validity of assumption of jurisdiction u/s 147 of the Act. 9. We have heard the rival submissions and perused the material available on record. The return of income for AY 2017-18 was filed by the assessee on 28.10.2017 declaring taxable income of Rs. 45,54,880/-. The assessment for AY 2017-18 was originally complete....
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.... no tangible material available with the ld AO suggesting some escapement of income so as to enable the ld AO to form a belief that income of the assessee had escaped assessment warranting reopening within the meaning of Section 147 of the Act. For these vague reasons being recorded, the ld Addl. CIT had accorded approval u/s 151 of the Act in a mechanical manner. This is classic case of reopening of assessment being made for making fishing and roving enquiries which is impermissible in the eyes of law. Factually the ld AR submitted that all the unsecured loans were not even received during the year by the assessee. The balance of Rs. 1,23,46,358/- represent unsecured loan received in earlier year and the same are being carried forward to the current year and no addition could be made validly by invoking the provision of Section 68 of the Act. Further, we find that in the proforma reproduced above for seeking approval u/s 151 of the Act, in response to Question No. 7, the ld AO had mentioned that the provision of Explanation 2(b) of Section 147 of the Act would be applicable. On perusal of the Explanation 2(b) of Section 147 of the Act, we find that the same would be applicable onl....
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.... c. Decision of Hon'ble Delhi High Court in the case of PCIT Vs. NC Cables Ltd reported in 391 ITR 11 on the aspect of mechanical approval being granted by the competent authority u/s 151 of the Act ; d. Decision of Hon'ble Madhya Pradesh High Court in the case of CIT Vs. S. Goyenka Lime and Chemical Ltd reported in 56 taxmann.com 390 on the aspect of mechanical approval being granted u/s 151 of the Act which becomes fatal to the entire assumption of jurisdiction u/s 147 of the Act. It is pertinent to note that the Special Leave Petition preferred by the revenue against this decision has been dismissed by the Hon'ble Supreme Court reported in 64 taxmann.com 313; e. Decision of Hon'ble Delhi High Court in the case of SBC Minerals Pvt. Ltd Vs. CIT 475 ITR 360 on the aspect of mechanical approval by holding that the same is not a mere empty formality and the competent authority must apply his mind independently before granting or sanctioning approval u/s 151 of the Act; f. Decision of the Hon'ble Bombay High Court in the case of Vodafone India Ltd Vs. DCIT reported in 464 ITR 385 on the aspect of mechanical approval granted u/s 151 of the Act; ....