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2008 (8) TMI 434 - AT - Income TaxAddition of agricultural income - Income From Tea Plantation - HELD THAT:- In the present case, the assessee's holding company has carried out the basic operations. The land was leased out to assessee company. The assessee company has also carried out certain activities in the nature of basic operations plus secondary operations including maintaining and harvesting of the crops. The holding company has not claimed any agricultural income from the said property leased out to the assessee company. The assessee company as a lessee has carried out all the necessary activities to run the tea estate. The assessee company has carried out certain basic operations like filling and pruning. It has applied manure; it has applied pesticides; it has taken all measures to protect the crop. It is after these processes, it becomes ripe for harvesting. Therefore, it is crystal clear that income earned by the assessee is agricultural income. Therefore, we hold that the sum declared by the assessee company as agricultural income has to be accepted. The consequential disallowance and addition are deleted. This issue is decided in favour of the assessee. Disallowance of provident fund and ESI contributions - Even though the payments were not made before the due dates under the respective Acts, the payments were in fact made before the due date of filing of return of income. Therefore, the claim of the assessee has to be accepted. The disallowance is deleted. The AO is directed to deduct those amounts while computing the taxable income. This issue is decided in favour of the assessee. Levy of interest u/s 234D - the levy is applicable only from AY 2004-05 onwards as held by Special Bench in the case of ITO vs. Ekta Promoters (P) Ltd. [2008 (7) TMI 452 - ITAT DELHI-E]. In the present case. the AY is 2002-03. Therefore, s. 234D will not apply and the levy is not sustainable. It is deleted. This issue is also decided in favour of the assessee. The assessee is successful in its appeal filed before us. Written off liability - Existence/genuineness of liabilities - There is no doubt that the assessee has not written off any liability in its books of account. Therefore, irrespective of the question when in future the said amount was written off by the assessee, the question is whether the said amount could be treated as income of the impugned AY 2002-03. The simple answer is "no" because the AO has not brought anything on record to prove that those liabilities cease to exist as on 31st March, 2002. In such circumstances, the said liability does not partake the character of income for the impugned assessment year. Therefore, the ground raised by the Revenue is liable to be dismissed. In result, the appeal filed by the assessee is allowed and the appeal filed by the Revenue is dismissed.
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