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2011 (10) TMI 484 - ITAT COCHINValidity of reopening of assessment on ground that assessee is indulged in purchase & sale of land resulting in business income whereas assessee disclosed the same as capital gains - Capital asset or agricultural land - Held that:- A perusal of transactions, revealed that assessee have failed to report three sale instances for an aggregate value of Rs. 43.79 lakhs, with the declared transactions aggregating to Rs. 18.06 lakhs. There was no mention of the same in the return of income. It is clarified that only items unconnected with the escapement of income for which the notice is given, would be excluded, so that the AO shall have to issue a fresh notice u/s. 148. However, in instant case, the same are clearly connected, with the AO finding the undisclosed transactions only from the details of the land sales entered into by the assessee for the year. Reopening is held to be valid - Decided against the assessee. Capital asset vs agricultural land - Held that:- The land/s under reference has not been shown as used for agricultural purposes. There is nothing to exhibit that any agricultural activity was carried out by the assessee at any time. Neither the returns of income for the current year or the preceding years nor the cash flow statement submitted bore any agricultural income. In fact, both the manner of the land sale (area, measure, price, transferee) depicts that the land was not sold as an agricultural land; the price fetched itself making it unfeasible for agricultural purpose. In fact, it would not be sufficient if the land/s was once an agricultural land, i.e., being actually cultivated . The land/s under reference was, in our opinion, not an agricultural land, at least at the relevant time, i.e., of its sale, and stands rightly treated by the Revenue as non-agricultural land. We decide accordingly - Decided against the assessee. Interest is rightly applied u/s 234B and 234C since date of filing of the letter conveying that the return filed earlier be treated as a return in response to the notice u/s. 148, has to be treated as the date of compliance of the notice u/s. 148. Also, the delayed filing of the return would not impact the levy of interest u/s. 234B but only u/s. 234A - Decided against the assessee.
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