TMI Blog2019 (11) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... ere coconut trees are planted. Copies of the record rights, crop information, sale invoices etc. are placed on record to prove that the land in Kudagu was owned by the assessee as well as agricultural operations were carried out regularly. The cost of asset remains fixed and the inflation index only reckons the indexed cost for the same asset based on the index which is notified by the Central Government. The concept of reverse indexation is not prescribed in the Income-tax Act. This method is wholly unsuitable when the yield for a particular year for each type of crop cultivated and its unit price varies from season to season in a year based on many uncertain and unpredictable variables like weather, market demand and supply etc. Therefore, we are of the view that the CIT(A) was not justified in directing that the agricultural income for all assessment years has to be determined on the basis of reverse indexation of income estimated for the calendar year 2018. Moreover, the Assessing Officer to assume jurisdiction u/s 153C he has to be satisfied that the documents or material found during the course of search belong to a person other than the searched person. In this case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated order. 3. Brief facts of the case are as follows:- The assessee, an individual, is Doctor by profession. He is also Managing Director of Moidu s Medicare Private Limited. There was a search u/s 132 of the I.T.Act conducted in the premises of KMCT Trust in which the assessee is a trustee. Subsequent to the search operation, assessments u/s 153A r.w.s. 153C of the I.T.Act were completed for assessment years 2006-2007 to 2012-2013. The assessee had declared agricultural income in the return filed by him for Asst.Years 2006-2007 to 2012-2013. The A.O. while completing the assessments u/s 153C of the I.T.Act for Asst.Years 2006-2007 to 2012-2013, disbelieved 50% of agricultural income declared by the assessee in respective assessment years and added back the same as income from other sources . The relevant finding of the Assessing Officer concerning assessment year 2006-2007 reads as follow:- Assessee has declared the income from agriculture to the tune of ₹ 27,88,000/- from midland coffee estate, Madikkeri, Karnataka for the A Y 2006-07. In order to find out the actual agricultural income from the above estate enquiries w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age Officer. The CIT(A), on the basis of the Village Officer s certificate, estimated the agricultural income for the year 2018 at ₹ 35 lakh and directed the A.O. to determine the agricultural income for assessment years 2006-2007 to 2012- 2013 by reversed indexation method. The relevant finding of the CIT(A) in this regard reads as follow:- Keeping in view the documents furnished by the appellant including some of the sale bills, demand drafts received and the certificate from the village office in Kedakal, it would be a fair estimate to presume that the agricultural income of the appellant can at best be estimated as ₹ 35,00,000/- per year for the calendar year 2018. The AO is directed to estimate the agricultural income of the appellant by reverse indexing the value of ₹ 35,00,000/- for 2018 to the CII of the relevant AY, to arrive at the net agricultural income of the concerned AYs and the difference in any can be treated as income from other sources. 6. The assessee being aggrieved by the order of the CIT(A), has filed these appeals before the Tribunal. Identical grounds are raised in all the appeals, except for assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the additional grounds now raised need to be admitted on record and adjudicated. The assessee has also filed a paper book enclosing notice issued u/s 153A r.w.s. 153C of the I.T.Act for all the assessment years, the CBDT Circular No.24/2015 dated 31.12.2015 regarding recording of satisfaction, details of land holding along with the English translation, specimen of agricultural produce, sales invoices, certificate from the Village Officer regarding estimation of agricultural income etc. The case laws relied on by the assessee is also enclosed in the paper book filed. 8. The learned Departmental Representative, on the other hand, strongly supported the orders of the Income-tax Authorities. 9. We have heard the rival submissions and perused the material on record. In all the assessment years concerned, only two issues arise for our consideration, namely, (i) whether the assessment orders are barred by limitation, and (ii) on merits, whether the CIT(A) erred in confirming the addition of 50% of agricultural income returned by the assessee as income from other sources . 9.1 As regards the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee as well as agricultural operations were carried out regularly. The CIT(A), in the impugned order, directed the Assessing Officer to estimate the agricultural income on reversed indexation method. The CIT(A) arrived at a figure of ₹ 35 lakh for the calendar year 2018 and accordingly directed the Assessing Officer to arrive at the agricultural income for the respective assessment years on the basis of reversed indexation method. The concept of cost of inflation indexation has been stipulated only for the purpose of neutralizing the impact of inflation on the cost incurred for the purchase of a capital asset for computation of long term capital gains. The cost of asset remains fixed and the inflation index only reckons the indexed cost for the same asset based on the index which is notified by the Central Government. The concept of reverse indexation is not prescribed in the Income-tax Act. This method is wholly unsuitable when the yield for a particular year for each type of crop cultivated and its unit price varies from season to season in a year based on many uncertain and unpredictable variables like weather, market demand and supply etc. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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