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TMI Blog2013 (12) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the said order of the Commissioner, assessment was completed under section 143(3) on a total income of Rs. 48,85,230/- after making the following additions/disallowances. (i) Treating of the income from letting out of poultry sheds as income from house property as against business claimed by the assessee Rs. 2,80,000/-. (ii) Treating the sale of agricultural lands as long term capital gains Rs. 46,05,230/-. 3. On appeal against the assessment made as above, the CIT(A) though concurred with the Assessing Officer in so far as assessment of rental income under the head 'House Property', deleted the addition made by the Assessing Officer in respect of capital gains on sale of agricultural land. 4. Aggrieved by the relief of Rs. 46,05,230/- granted by the CIT(A), Revenue is in appeal before us vide ITA.No.457 & 458/Hyd/2012. Whereas, assessee through its appeal ITA.No.360/Hyd/2012 contested the addition of Rs. 2,80,000/- made by treating the rental income as income from house property, sustained by the CIT(A) . 5. We may first take-up for consideration Revenue's appeal ITA.No.457/Hyd/2012. 6. As stated above, the ground of the Revenue in this appeal relates to treatment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was being used for poultry farm and lease rentals had been offered to tax. He also stated that the land was situated within 8 kilometers from the limits of Bibinagar. 9. During the appeal proceedings before CIT(A) the assessee contended that there was a factual error in the order of Assessing Officer as well as in the order of CIT-IV, Hyderabad passed u/s.263 of the Act. It was contended that the land which was sold was agricultural land and was different than the lands on which poultry business was being carried out. To prove this point, a certificate from Tahisildar, Bibinagar, MOU regarding the lands sold and certificate from Sarpanch, Gram Panchayat, Raheemkhanguda were produced as additional evidence before CIT(A) during the appeal proceedings. The CIT(A) sent additional evidence along with written submissions to the Assessing Officer for a remand report which was received by him on 3.11.2011. The remand report was confronted to the appellant, who gave his counter comments on 25.11.2011. 10. The CIT(A) observed that with respect to nature of land the contention of the assessee is that the land in question have been sold bearing survey no.636, 716 and 717 of Kondamadugu Vil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the addition made by the Assessing Officer and dismiss the departmental appeal vide ITA.No.457/Hyd/2012 for the assessment year 2005-2006. 13. In the result the department appeal is dismissed. 14. ITA.No.360/Hyd/2012 (Assessee's Appeal) : The only grievance is with regard to treatment of rental income from letting out of property as 'Income from House Property' instead of 'Business Income'. 15. Brief facts are that the assessee is in the business of poultry farms. Assessee leaded out poultry sheds for 8 months starting from August, 2004 on a monthly rent of Rs. 50,000/-. Assessing Officer brought the said rental income for 8 months to tax under the head "Income from house property". In that process, the Assessing Officer disallowed the assessee's claim for deduction from that rental income the business expenditure of Rs. 1,15,485/- on the ground that no business activity whatsoever was carried out. 16. On appeal before the CIT(A), the assessee contended that the assessee has constructed the poultry sheds with all facilities, infrastructure together with servant quarters. It is not a simple case of letting out of simple house property and the poultry sheds and their maintena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court and others on the point in dispute, including the decision of Apex Court in the case of Shambhu Investments (supra) relied upon by the learned Counsel for the assessee before us, we find no infirmity in the Order of the CIT(A). 20. We accordingly, uphold the Order of the CIT(A) on this issue and reject the grounds of the assessee in its appeal. Assessment year 2006-2007 : 21. In the appeal of the Revenue for the assessment year 2006- 2007 (ITA.No.458/Hyd/2012) the first issue involved relates to treating the sale of agricultural land as resulting in capital gains and consequently making an addition of Rs. 78,83,030/-. Facts and circumstances leading to the addition in question being identical to the one discussed by us in the context of Revenue's appeal for the assessment year 2005-2006, for the detailed reasons discussed in para No.10 hereinabove, we uphold the Order of the CIT(A) and reject the ground of the Revenue on this issue. 22. The next issue involved in this appeal relates to disallowance of depreciation of Rs. 8,09,487/- on poultry lands. Effective ground of Revenue on this issue reads as follows : "The CIT(A) is not correct in directing the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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