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2014 (7) TMI 1145 - AT - Income TaxValidity of proceeding u/s 153C - unexplained credit u/s 68 - Held that:- On the date notice was issued u/s 153C of the Act, there is no assessment proceeding pending before the assessing officer for the aforesaid assessment year. Therefore, in absence of any incriminating material showing concealed/undisclosed income of the assessee, the assessing officer could not have proceeded to assess income which has already been reflected in the books of accounts and disclosed in the return of income filed by the assessee. Even otherwise also, conclusion drawn by the assessing officer in the assessment order that the agricultural income is unexplained also found to be not on cogent material, because of the fact that the CIT(A) has accepted 50% of the income shown as agricultural income against which the department is not in appeal. Further, in the remand report, the assessing officer himself has accepted that the assessee has earned income from coconut trees and casurina plantation which can be considered as agricultural income. In aforesaid view of the matter, the proceeding initiated u/s 153C of the Act in absence of any incriminating material and only on the basis of the material already disclosed by the assessee is invalid and consequently the assessment orders passed are also unsustainable in law. Accordingly, we quash assessment orders passed in all these assessment years - Decided in favour of assessee Disallowance of agricultural income - Held that:- While completing assessment u/s 143(3) of the Act for the impugned assessment year, the assessing officer rejected assessee’s claim of agricultural income and treated it as unexplained credit u/s 68 of the Act. The CIT(A) allowing partial relief modified the addition made by the assessing officer. While considering identical nature of dispute in case of M/s. Avinash Estates and Resorts Ltd. Vs. DCIT [2014 (10) TMI 668 - ITAT VISAKHAPATNAM ] and other group companies, this bench has directed the assessing officer to disallow 25% out of the agricultural income declared by the assessee. Respectfully, following the same, in the present case also we direct the AO to disallow 25% out of the agricultural income declared by the assessee.
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