TMI Blog2016 (3) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court in Singhai Rakesh Kumar (2000 (11) TMI 2 - SUPREME Court) and All India Tea and Trading Co. Ltd. (1996 (3) TMI 4 - SUPREME Court ) which was followed by the decision of Cochin Bench of this Tribunal in Nilgiri Tea Estates Ltd. (2012 (2) TMI 553 - ITAT COCHIN ). The CBDT has also subsequently clarified that the profit on sale of the land has to be treated as agricultural income and will not constitute “revenue” within the meaning of Section 2(1A)(a) of the Act. In view of the above, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly found that the profit on sale of the land has to be classified as agricultural income. - Decided in favour of assessee Computation of profit u/s 115JB - Minimum alternate ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als of the assessee and Revenue are directed against the same order of the Commissioner of Income Tax (Appeals)-1, Chennai, dated 05.08.2015 and pertain to assessment year 2012-13. We heard both the appeals together and disposing of the same by this common order. 2. Dr. Milind Madhukar Bhusari, the Ld. Departmental Representative, submitted that the assessee-company sold agricultural land measuring 15.14 acres at Keezhakottaiyur and Mambakkam Village for a total consideration of ₹ 56,24,95,297/- to M/s Smart Value Homes Limited, Mumbai. The assessee claimed the profit on sale of the land as exempt under Section 2(14) of the Income-tax Act, 1961 (in short 'the Act'). By considering the exorbitant price for which the land was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural income in regular course. It is not the case of the Assessing Officer that the land is not subjected to cultivation. The only objection of the Assessing Officer is that the assessee sold the land at an exorbitant rate and the purchaser is a real estate dealer. Placing reliance on the judgment of Madras High Court in Sri M.S. Srinivasa Naickar (supra), the Ld. representative submitted that on identical set of facts, the Madras High Court examined the issue. The case before the Madras High Court is that the assessee cultivated the land; the adangal register showed that the land was agricultural land wherein the assessee carried on agricultural operation till the date of sale of the land. The purchaser applied for conversion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative for the assessee has also placed reliance on the decision of Cochin Bench of this Tribunal in Harissons Malayalam Ltd. v. ACIT (2009) 32 SOT 497 and submitted that the amount of income to which the provisions of Section 10 of the Act applies, if any such amount is credited to the Profit Loss account, shall be reduced from the book profit for the purpose of Section 115JB of the Act. Referring to Section 10(1) of the Act, the Ld. representative submitted that in computing the total income of a previous year of any person, agricultural income shall not be included therein. Referring to the copy of circular issued by CBDT in No.550 dated 1st January. 1990, a copy of which is available at page 59 of the paper-book, the Ld. repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer found that the assessee has sold the land in question for an exorbitant price of ₹ 56,24,95,297/- to M/s Smart Value Homes Limited, Mumbai, a real estate dealer. Therefore, the Assessing Officer rejected the claim of the assessee for exemption as agricultural income. The fact that the land is classified as agricultural land is not in dispute. It is also not in dispute that the assessee has returned agricultural income year after year. The adangal extract, which is available at pages 29 to 34 of the paperbook, clearly shows that the land in question was subjected to agricultural operation. Therefore, it was obvious that the land is an agricultural land. Therefore, the profit arising out of such land has to be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as discussed earlier, the profit on sale of the land has to be treated as agricultural income. Therefore, if any such income is credited to the Profit Loss account, the same has to be reduced from the book profit while computing income under Section 115JB of the Act. Therefore, this Tribunal is unable to uphold the order of the CIT(Appeals) on this issue. By following the order of Cochin Bench of this Tribunal in Harrisons Malayalam Ltd. (supra), the orders of the lower authorities are set aside. The Assessing Officer is directed to reduce the profit on sale of agricultural land from the book profit for the purpose of computing income under Section 115JB of the Act. 8. In view of the above discussion, the appeal of the Revenue is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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