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2014 (7) TMI 519 - AT - Income TaxRestriction of agriculture income – AO treated the income as business income - Held that:- No basis has been spelt out by the AO to arrive at the conclusion that out of the total income declared by assessee, part of the income was business income - no enquiry was made by the AO either by himself or through the inspectors to verify and examine the land holding of the Assessee, the nature of crops cultivated on the land, whether the land was irrigated or what were the facilities available for irrigating the land, the yield of the land during the relevant period - no enquiry with Surpanch or Patwari or any other Revenue Authority was made either by AO or CIT(A) nor the Revenue records were called for to ascertain yield of crops and the factual position - the details like the land holding under agriculture, nature of irrigation facilities on the land, the crops grown on the land in the relevant period, record of crops grown in the Revenue records needs to be verified – thus, the matter is remitted back to the AO for examination – Decided in favour of Revenue. Treatment of tax of the profit earned on sale of land - Business income or capital gains - Held that:- Assessee has claimed deduction u/s. 80IB of the Act for the development of housing projects meaning thereby that the Assessee was engaged in the business of development of housing projects in those years. - A.O has rightly treated the profit from sale of land bearing plot no 91 as "business income". - Decided against the assessee. Profit of sale of land not disclosed in the books of accounts - Held that:- The submission of the Assessee that the non recording of land in the individual balance sheets was on account of mistake in accounting was also not accepted by CIT(A). Before us the Assessee could not demonstrate as to how the mistake continued for so many years more so, when the accounts of the firm and the Assessee were audited year after year. - taxable as business income - Decided against the assessee. Addition u/s. 41(1) of the Act - Advance received against land sale - A.O as of the view that when the deed of conveyance proved that the transaction was over and each party had taken over the possession of property/consideration, the liability of ₹ 1,27,83,333/- ceased to exist. - revenue submitted that, CIT(A) has wrongly presumed that against the liability, Assessee would have received the amount and such amount would have been offered for tax as there was no material for arriving at such conclusion. He therefore submitted that in the absence of any evidence, A.O has rightly made the addition. - Held that:- the order of the CIT(A) needs to be re-examined, thus, the matter is remitted back for the fresh adjudication - Decided in favour of Revenue.
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