Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 591 - AT - Income TaxCharging of Interest u/s 234B and 234C - HELD THAT:- The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon’ble Apex Court in the case of Anjum H. Ghaswala [2001 (10) TMI 4 - SUPREME COURT] therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234B and 234C Recategorization of Agricultural income as Non-Agricultural income under the head ‘Income from Other Sources” - JDA was entered into and the agricultural lands were converted for non-agricultural purposes - assessee is a HUF comprising of 13 members from agricultural backgrounds owning agricultural lands of approx. 28 acres; with 17 acres being ancestral lands and approx. 11 acres of agricultural lands purchased by the HUF over a period of time - HELD THAT:- It is not in dispute that the assessee HUF owned agricultural lands in the year under consideration. AO was of the view that the assessee had entered into a joint development agreement (JDA) and converted for non-agricultural purposes, the CIT(A) was of the view that the entire analysis of the AO is based on the evidence produced by the assessee regarding the carrying out of agricultural activities and sale of agricultural produce. CIT(A) was also of the view that the AO has not based his / her conclusions on the fact that any agricultural operations carried out on such land, could not be considered agricultural activity. This finding of the CIT(A) has not been disputed by Revenue. Therefore, the fact that the JDA was entered into and the agricultural lands were converted for non-agricultural purposes has no relevance in the case on hand Whether the assessee HUF carried out agricultural operations during the year ? - The notice issued by the AO, copy of reports given by the Village Accountant, Revenue Inspector and translated copies thereof on appraisal thereof, in the period relevant to Assessment Year 2014-15, the assessee HUF was growing various crops and fruits like ragi, mangoes, bananas, vegetables, coconut, etc., and thereby derived agricultural income. In these factual circumstances, the very basis of the AO to hold that the assessee HUF did not carry on agricultural operations during the year is factually incorrect; being contrary to the facts on record. In respect of agricultural income from cultivation / sale of bananas and sericulture, the AO has estimated the income, expenditure, etc., on the basis of enquiries made with Senior Assistant Director, Horticulture Department and Sericulture Extension Officer. However, it is an undisputed fact, as per the material on record, that the assessee was carrying on agricultural operations during the year under consideration as per the reports of the Village Accountant and Revenue Inspector submitted in response to information called for by the AO under section 133(6) of the Act. AO was not correct in estimating the agricultural income and expenditure incurred to earn the same; to make the impugned additions. As fairly conceded by the learned AR, income from sale of cocoons cannot be regarded as agricultural income in view of the decision in the case of K. Lakshmanan & Co. Vs. CIT ( [1998 (2) TMI 10 - SUPREME COURT] wherein it was held that income derived by the assessee from sale of cocoons raised by it by feeding mulberry leaves to silkworms is not agricultural income. As already been held in this order that the AO was not correct in estimating, both the agricultural income as well as the expenditure thereon, when the facts on record establish that the assessee HUF had carried on agricultural operations; including the growing of Mulberry plants and sericulture; during the year under consideration. As the income from sericulture as declared by the assessee amounting to ₹ 15,42,199/- is to be accepted and 50% thereof, amounting to ₹ 7,71,100/- is held to be attributable to the sale of cocoons, which is chargeable to tax. - Decided partly in favour of assessee.
|