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2007 (12) TMI 310 - AT - Income TaxValidity of the assessment framed under section 144 - Best judgment assessment - Addition made u/s 68 on non confirmation of sundry creditors - Income from nursery activity considered as agricultural income ?. Validity of the assessment framed under section 144 - HELD THAT:- In our opinion there is no merits in the submissions of the Ld. Counsel made in this regard inasmuch as the same is not supported by any material on record. Mere filing of an affidavit does not substantiate the claim of the assessee that firstly the hearing had been adjourned from 27-3-2000 to 30-3-2000 on the direction of the Assessing Officer and secondly that the Assessing Officer had directed the counsel for the assessee to file the reply at 6.05 PM though AR had reached the office at 2.30 PM. Neither the affidavit of the AR of the assessee who had purportedly been issued directions to file the reply at 6 PM on 30-3-2000 has been placed nor any reasons have been stated that for non-filing of the affidavit of the AR of the assessee. Even otherwise, CIT(A) on examination of the assessment records has noted that the Assessing Officer has specifically mentioned on the said letter filed on 30-3-2000 that "place on file, order already passed, no cognizance can be taken". Therefore, evidence on record clearly suggests that the letter was filed after the order of assessment had already been made which evidence has not been rebutted by any evidence much less independent evidence. In the circumstances the decision relied upon in the case of Mehta Parikh & Co. v. CIT [1956 (5) TMI 4 - SUPREME COURT] are not applicable to the facts of the case of the assessee. We, therefore, hold that the assessment made under section 144 of the Act was justified. Addition on unexplained cash credit under section 68 - HELD THAT:- Applying judicial pronouncement in the case of Electra (Jaipur) (P.) Ltd. v. IAC [1987 (12) TMI 76 - ITAT DELHI-A], which are fully applicable to the facts of the assessee, we hold that the CIT(A) was not justified in not admitting the confirmation from M/s. Vijay Udyog as additional evidence. The Ld. CIT(A) has held reading the aforesaid confirmation that there is a difference in the balances as per confirmation and as per the books of account of the assessee. He has noted that balance as per the confirmation was Rs. 70,862 whereas the balance as per the books was Rs. 52,889 and therefore the difference was Rs. 11,962 could not be explained. The said basis is also unjustified for the mere fact that details explaining the difference in balance has been filed at page 109 of the paper book, which clearly shows that this difference of Rs. 11,972.27 was in respect of goods returned during the financial year 1995-96 for which credit was not given by M/s. Vijay Udyog. Therefore, the closing balance of M/s. Vijay Udyog in the books of assessee stands fully explained and as such the addition made untenable. We, therefore, direct to delete the same. Income from agricultural activity - agriculture income or income from other sources - HELD THAT:- The assessee’s case is that she holds agriculture land in Jonapur and on the said piece of land she planted a nursery. Therefore, it is the agriculture land wherein agriculture operations are being carried on, seeds are being sowed in the land and other agriculture operation are being done with the help of human skill and labour. The plants after they have attained its growth and are in a salable condition are then sold to customers. Therefore, income earned by this process has to be called agriculture income. Since the assessee is doing both basic as well as subsequent operation while carrying out its business activities and as such applying the ratio of the decision in the case of Raja Benoy Kumar Sahas Roy [1957 (5) TMI 6 - SUPREME COURT], the business of the assessee is agriculture within the meaning of section 2(1A) of the Act. We, therefore, direct to treat the income as the agriculture income of the assessee. In the result, the appeal filed by the assessee is partly allowed.
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