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2015 (7) TMI 396 - ITAT HYDERABAD

2015 (7) TMI 396 - ITAT HYDERABAD - TMI - Treatment of agricultural income as 'Income from other sources' - proceedings u/s.153A - Held that:- There is no dispute with reference to the fact that assessee owned land of 29 acres 4 guntas purchased way back in 1997 and holding the possession from then onwards. Even though on the basis of orders of the Principal Jr. Civil Judge, Siddipet, the registration took place in 2012, assessee has been offering agricultural income in earlier years. In fact, t .....

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er assessment years, assessee's contentions that the lands were being cultivated by cultivators and assessee gets only net income requires examination. Neither the Assessing Officer enquired into this aspect nor CIT(A) even though contended before her, did not order the Assessing Officer to make enquiries. Books of Accounts as seen from the assessment order, are stated to be with the department only. Therefore, in the interest of justice, we set aside the orders in AYs.2003-04 to 2005-06 and 200 .....

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-I, Hyderabad dated 28-07-2014. 2. The only issue agitated by assessee in these appeals is with reference to the treatment of agricultural income as 'Income from other sources'. Assessee has filed returns of income and declared incomes as under: A.Y. Date of filing Income (In Rs.) Agricultural Income (In Rs.) 2003-04 20-11-2003 22,450 3,03,744 2004-05 30-12-2004 30,100 3,03,744 2005-06 30-04-2006 91,800 3,29,077 2006-07 10-12-2006 95,730 3,43,954 2007-08 27-08-2008 4,51,900 4,95,373 2008 .....

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d the agricultural income as non-agricultural income on the reason that there is no expenditure booked for agricultural activity and there are only regular receipts in the Books of Accounts. As there is no out go and assessee has not been able to produce any evidence for carrying out agricultural activities other than possession of agricultural land, the incomes declared by assessee was treated as 'income from other sources' by AO. 4. Before Ld.CIT(A) it was submitted that authorities di .....

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found during the course of search, Assessing Officer was not justified in treating the agricultural incomes already declared as 'income from other sources'. 5. Ld.CIT(A) while accepting that assessee did own the land however, did not agree with the contentions and rejected the same by holding as under: "08.0 The assessment orders and written submissions and the sale deeds and the court decrees filed by the appellant have been carefully considered. First of all, it is noticed that t .....

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ation from the alleged cultivator or proof of cultivation of the land and agricultural produce or sale of the agricultural produce. It is not sufficient to establish the possession of agricultural lands to claim agricultural income but it is essential to establish that agricultural activity was carried out in those lands and the agricultural produce has been sold and there from agricultural income was derived. The appellant failed to establish that it carried out agricultural activity and derive .....

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four persons who gave the agricultural income on sharing basis to assessee. Assessee was deriving agricultural income and being declared in respective years and the fact was verified and accepted in AY.2006-07 by ITO, Ward-1(1) vide order dt.24-12-2008. It was further submitted that there was no incriminating material in the course of search and so Assessing Officer was not justified in treating the declared income as 'income from other sources'. 7. Ld.DR however, relied on the order of .....

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n the sources or to furnish the evidence in support of the agricultural income. Prima facie action of AO in treating the declared agricultural income as 'income from other sources' cannot be justified, as assessee was not given any proper opportunity. Be that as it may, even the accepted income in AY.2006-07 was also treated as 'income from other sources' without even referring the order u/s.143(3) passed by the predecessor Assessing Officer. this fact was brought to the notice o .....

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epted in AY.2006-07. Therefore, in AY.2006- 07, treating the agricultural income which was assessed as such as 'income from other sources' cannot be upheld. Concluded matters cannot be re-agitated in the proceedings u/s.153A unless there is evidence to the contrary. Since there is no incriminating material during the search, the treatment of the said income as income from other sources in AY.2006-07 is set aside. As far as AY.2006-07 is concerned, assessee's grounds are allowed. 10. .....

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