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2023 (6) TMI 83 - AT - Income TaxCharacterization of income - Treating the agriculture income declared by the assessee as Business income - CIT (A) deleted the addition observing that the income derived from similar activities in the past previous years had been accepted by the Revenue without any adverse finding and the same has been treated as agricultural income - HELD THAT:- No valid reason to reverse the findings of the CIT (A) for the reason that in the past assessment years while making scrutiny assessments u/s 143(3) AO has accepted the stand of the assessee that activities of cultivating of sugar cane seeds as agricultural activity and the income derived therefrom is agricultural income. No valid reasons to deviate from the stand taken by the revenue from earlier years as there was no change in facts. Ratio of the decision of Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] was rightly applied by the CIT (Appeals). Thus, we sustain the order of the ld. CIT (Appeals) and reject the ground raised by the Revenue. Addition u/s 41(1) - outstanding balances in sundry creditors accounts - CIT (A) following the decision of Sugauli Sugar Works (P.) Ltd [1999 (2) TMI 5 - SUPREME COURT] deleted the addition - HELD THAT:- In the absence of the creditor, it is not possible for the authority to come to a conclusion that the debt was barred and had become unenforceable. There may be circumstances which may enable the creditor to come with a proceeding for enforcement of the debt even after expiry of the normal period of limitation as provided in the Limitation Act. The principle that expiry of period of limitation prescribed under the Limitation Act cannot extinguish the debt but it will only prevent the creditor from enforcing the debt is well- settled. Mere entry in the books of account of the debtor made unilaterally without any act on the part of the creditor would not enable the debtor to say that the liability had come to an end. Apart from that that would not by itself confer any benefit on the debtor as contemplated by the section. Therefore, as right in holding that the assessee's unilateral entry in the accounts transferring the amount to the capital reserve account would not bring the matter within the scope of section 41. - Decided against revenue. Addition u/s 14A r.w.r. 8D(2)(iii) - CIT (Appeals) considering the submissions of the assessee that only 0.5% of average value of investments which yielded the exempt income should be considered for the purpose of disallowance under Rule 8D(2)(iii), held that the AO wrongly computed the disallowance and deleted the excess disallowance - HELD THAT:- As in view of the decision of Vireet Investment (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] and also the decision of ACB India Ltd. Vs. CIT [2015 (4) TMI 224 - DELHI HIGH COURT] only those investments which yielded Tax free dividend income should be considered for disallowance under Rule 8D(2)(iii). Therefore, we see no infirmity in the order passed by the ld. CIT (Appeals). The ground raised by the Revenue is rejected.
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