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2019 (11) TMI 1243 - ITAT COCHINAssessment u/s 153A - whether the assessment orders are barred by limitation - whether the CIT(A) erred in confirming the addition of 50% of agricultural income returned by the assessee as “income from other sources”? - - HELD THAT:- In the instant case, it is clear from the assessment order that no transfer of document is required since the Assessing Officer in the case of searched person and the assessee is same. The search was conducted on 31.10.2011 and hence the last date for completion of assessment was 21 months from 31.03.2012, being the end of the financial year in which the search was carried out. Therefore, the assessment orders ought to have been passed on or before 31.12.2013. However, in these cases, the assessment orders were passed only 31.03.2014. Hence, these assessment orders are prima facie barred by limitation. On merits we find that the assessee is the owner of more than 75 acres of land in Madikeri. In Madikeri, the assessee’s land is cultivated with coffee, cardamom, pepper etc. The assessee is also having land in Kozhikode, where coconut trees are planted. Copies of the record rights, crop information, sale invoices etc. are placed on record to prove that the land in Kudagu was owned by the assessee as well as agricultural operations were carried out regularly. The cost of asset remains fixed and the inflation index only reckons the indexed cost for the same asset based on the index which is notified by the Central Government. The concept of reverse indexation is not prescribed in the Income-tax Act. This method is wholly unsuitable when the yield for a particular year for each type of crop cultivated and its unit price varies from season to season in a year based on many uncertain and unpredictable variables like weather, market demand and supply etc. Therefore, we are of the view that the CIT(A) was not justified in directing that the agricultural income for all assessment years has to be determined on the basis of reverse indexation of income estimated for the calendar year 2018. Moreover, the Assessing Officer to assume jurisdiction u/s 153C he has to be satisfied that the documents or material found during the course of search belong to a person other than the searched person. In this case, there is no mention in the assessment order as to what document or valuable were found in the premises of the searched person that belonged to the assessee. There is no material belonging to the assessee which were unearthed during the search. This is clear from the fact that additions were made to the income returned in the respective assessment orders u/s 153C of the I.T.Act, by disbelieving 50% of agricultural income returned by the assessee and treating it as income from other sources (which was done on estimate basis) and the addition u/s 2(22)(e) of the I.T.Act. It is now well settled position of law that proceedings u/s 153C of the I.T.Act against the person who is not searched cannot be initiated unless incriminating documents or valuables belonging to such person were detected during the search In the instant case, the assessments were completed u/s 153A r.w.s. 153C of the I.T.Act. Therefore, in the absence of any incriminating evidence regarding details or documents, showing introduction of unaccounted income in the guise of agricultural income, the addition of a portion of agricultural income as income from other sources cannot be justified. Such an assessment is clearly unsustainable as the assessing authority has wrongly assumed jurisdiction u/s 153C of the I.T.Act as it was held in the case of Sinhgad Technical Education Society v. CIT [2017 (8) TMI 1298 - SUPREME COURT] . Additions made as income from other sources by disbelieving 50% of agricultural income returned by the assessee in the respective assessment years is uncalled for and we delete the same - Decided in favour of assessee
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