TMI Blog2022 (12) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee has declared agricultural income varying from Rs.25,000/- to Rs.1,80,000/- and as per revenue records, the assessee has grown crops in the land and earned some agricultural income. The assessee is able to prove that the land is kept for agricultural activity and it has actually carried out agricultural activity, as the evident shows. In view of these facts and circumstances, we are of the view that the CIT(A) has rightly treated this land as agricultural land and held that the same is not assessable to capital gains. We affirm the findings of CIT(A) on this issue and Revenue s appeal is dismissed. Addition u/s.43B towards service tax - assessee before us submitted that the matter can go back to the file of the AO for verification, whether the assessee has paid this amount or not within the due date, as prescribed under Service Tax Act - HELD THAT:- CIT-DR has not objected. We also noted that the CIT(A) has confirmed the disallowance only on the absence of any evidence not produced by assessee in regard to payment of service tax within the due date. Since, the assessee is now requesting for producing evidence, we are setting aside this issue to the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sset u/s 2(47) r.w.section 45. 2.2 The CIT(A) failed to note that the assessee has not filed the conveyance deed for acquiring as well as for disposal of the impugned lands before the AO either during the assessment proceedings or when the issue was remanded to the AO. 2.3 The CIT(A) failed to note that the conditions stipulated in section 2(14) cannot be established unless the particulars of the land are known. 2.4 The CIT(A) failed to appreciate that the assessee did not produce any documentary evidence for the agricultural activity carried out by the assessee, sale of agricultural produce etc. 2.5 It is verified from the returns filed by the assessee that the assessee company has not offered agricultural income for the AYs 2009-10, 2010- 11, 2011-12 and in this assessment year and the CIT(A) failed to note this important fact. 3. The brief facts of the case are that the assessee sold 33.92 acres of agricultural land at Mannur near Sriperumbudur for a total sale consideration of Rs. 19.60 Crores. The assessee has declared the book value at Rs. 1.01 Crore in the assessee company s books of accounts. The A.O noted that the difference of Rs. 18.58 Crores was directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in fact earned on the said lands and proof of sale of agricultural produce etc. The profit on sale of land should have been credited .to profit and loss account, even if the assessee wants to claim any exemption from tax. The book depreciation chart also does not reveal whether this asset is included in the WDV of hand. Further, there is no break-up and details for Long term capital assets and short term capital assets. The assessee has not produced any documentary evidence in support of their claim despite specifically calling for vide this office letter u/s. 142(1) dated 09.01.2015 and also during the course of assessment proceeding. Moreover, no agricultural income was admitted in the return of income to claim that electrical goods manufacturing company has been carrying on the agricultural operation nor produced any certificate from revenue authorities or any documentary proof whatsoever in nature to claim this as a capital asset and profit therefore is a capital receipt. In the absence of concrete documentary proof, it is clear that section 2(47) r.w.s 45 attracts in this case and hence profit no sale of the asset is bought to tax under the head Capital Gain . I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entary proof for the agricultural activity carried out during the relevant period was furnished by the appellant were not sufficient to establish that the land is agricultural in nature. 4.4.1. The Hon ble Supreme Court in the case of Smt. Sarifabibi Mohamed Ibrahim v. CIT (204 ITR 361)(SC) declared as under: Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of the Supreme Court and the High Court, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them a process of evaluation. The inference has to be drawn on cumulative consideration of all the relevant facts. With regard to the diverse guidelines issued by various Courts, I find that the appellant conforms to a majority of these. As regards the character of the land and capacity of being used as agricultural land are concerned, these are in favour of the appellant as seen from the details of agricultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdictional High Court in the case of CIT v Mansi Finance Chennai Ltd (388 ITR 514)(Mad.) wherein it was observed that where a land has been classified as agricultural land and such land was not converted into non-agricultural land prior to its sale then it can be concluded that the land retained its character as agricultural land till the time of the sale. After a cumulative consideration of all the relevant facts as above, I hold that the land in question has to be treated as agricultural land for the purposes of v Section 2(14) and the appellant is not liable for any capital gains tax on the sale. The addition of Rs.18,58,00,000/- made by the Assessing-Officer in this regard is deleted. The appellant succeeds on this ground. Aggrieved, the Revenue is in appeal before the Tribunal. 6. We have heard rival contentions and gone through facts and circumstances of the case. The facts of the case are that the assessee company has been carrying on business of manufacturing and trading of electrical goods. The AO noted that in this assessment year, the assessee has sold 33.92 acres of agricultural land at Mannur near Sriperumbudur for a sale consideration of Rs.19.60 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural income varying from Rs.25,000/- to Rs.1,80,000/- and as per revenue records, the assessee has grown crops in the land and earned some agricultural income. The assessee is able to prove that the land is kept for agricultural activity and it has actually carried out agricultural activity, as the evident shows. In view of these facts and circumstances, we are of the view that the CIT(A) has rightly treated this land as agricultural land and held that the same is not assessable to capital gains. We affirm the findings of CIT(A) on this issue and Revenue s appeal is dismissed. C.O.No.109/CHNY/2017 7. Coming to cross objection of the assessee, the first effective issue is as regards to the order of CIT(A) partly sustaining the addition u/s.43B of the Act towards service tax of Rs.2,33,237/-. 8. We have heard rival contentions on this issue and gone through facts and circumstances of the case. The ld.counsel for the assessee before us submitted that the matter can go back to the file of the AO for verification, whether the assessee has paid this amount or not within the due date, as prescribed under Service Tax Act. To this proposition, the ld.CIT-DR has not objected ..... X X X X Extracts X X X X X X X X Extracts X X X X
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