TMI Blog2023 (1) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the order cannot be stated to be erroneous although it may be prejudicial to the interest of the Revenue since according to the learned PCIT the agricultural income from 14.08 acres of land could not have exceeded Rs.10.00 lakhs. In the instant case, the office note of AO clearly shows that he has accepted the agricultural income declared by the assessee after due verification and due application of mind and therefore, it cannot be said that the order passed by the Assessing Officer is erroneous. Even if the order is prejudicial to the interest of the Revenue, however, the other condition that the order is erroneous is absent. Therefore, the learned PCIT, in our opinion, is not justified in assuming jurisdiction u/s 263 - it has been held in various decisions that merely because the PCIT does not agree with the view taken by the AO he cannot assume jurisdiction u/s 263 or thrust upon his view as against the view taken by the AO unless the view taken by the AO is perverse one or not a possible view. The view taken by the Assessing Officer in the instant case is a possible view. We, therefore, set aside the order passed by the learned PCIT and the grounds raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied with the local revenue authorities and the Tahsildar certified that the extent of assessee's agricultural land is 11 Acres 80 Cents. It was also certified by the Tahsildar that the annual income that can be derived from said extent of land is Rs. 5,00,000/- only. Thus, the assessee should have earned Rs. 10,00,000/- proportionately on cultivation of 24 acres 80 cents. Further, during the assessment proceedings, the assessee stated that he earned Rs. 20,01,360/- through paddy canvassing agent. In reply to show cause letter issued by the Assessing Officer, the assessee submitted that he cultivated various crops such as Mirchi, Mango, Tobacco, Sweet corn along with paddy and earned a net agricultural income of Rs. 20,01,000/-. The assessee also submitted that during the year under consideration, he did not sell any land. Therefore, even if it is presumed that the entire land was put to cultivation, he would have earned agricultural income of Rs.10,00,000/- approximately, but not Rs.20,01,386/-. Thus, the difference of Rs. 10,01,386/- should have been disallowed by the Assessing Officer and treated as excess claim of agricultural income which needs to be brought to tax. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the year under earned consideration, you did not sell any land. Therefore, even if it is presumed that entire land was put to Cultivation, you would have earned agricultural income of Rs.10,00,O00/ approximately, and not Rs.20,01,386/ Thus, the difference of Rs. 10,01,386/- should have been disallowed by the Assessing Officer and treated as excess Claim or agricultural income which needs to be brought to tax. Therefore, the order passed u/s 143(3) of the Income Tax Act, 1961 on 19-12-2017 is erroneous and prejudicial to the interest of the revenue. 3. In view of the above, I am of the opinion that the assessment order dated 19-12-2017 passed by the Assessing Officer us 143(3) of the Income Tax Act, 1961 is erroneous in so far as it is prejudicial to the interests of Revenue as the order was passed without making inquiries or verification which should have been done by the Assessing Officer. 4. Therefore, you are requested to show cause either by appearing personally or through an authorized representative in my office at the address given above on 21-03-2019 at 11.30 AM or by filing written submissions, as to why the above mentioned order for the Asst. Year 2015-16 should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn as agricultural land in the Revenue records. Thus, it is evident that both the replies are different and the assessee has not been able to substantiate the correct area of land. In this regard, the Assessing Officer is directed to verify the Partition deed and to do physical verification of land shown in the Pattadar passbook and derive at the correct area of land and decide the income tax implications accordingly. ii. Regarding the aspect that is presumed that even if the entire land was put to cultivation, the agricultural income would be approximately Rs. 10,00,000/- only and not Rs. 20,01,386/-, the assessee replied that Generally agricultural products sold at the time of price hike accordingly we sold these products at a higher rate and got the profit to the extent of Rs. 20,01,356/- local revenue authorities and tahsildar is Rs. 10 lakhs for the one year, but we consider the agricultural income was related to 2 years, i.e., 2013-14 2014-15 since we sold in the 2014-15 only and considered the same in IT return. In this regard, it is pertinent to mention here that agricultural produce have very less shelf life and are perishable. Assessee's contention that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 10. Referring to page 15 16 of the Paper Book, she drew the attention of the Bench to the notice issued u/s 142(1) dated 28.10.2020 wherein the Assessing Officer had asked the assessee to furnish certain details. 11. Referring to page 17 to 19 of the Paper Book, she drew the attention of the Bench to the order issued by the RDO, Eluru for converting his agricultural land of 5.19 acres for nonagricultural purposes. 12. Referring to page 26 27 of the Paper Book, she drew the attention of the Bench to the reply given by the assessee during the course of assessment proceedings explaining the details of agricultural income, details of crops grown, details of expenditure incurred and details of gross receipts and net receipts and further confirming that no agricultural land was sold. She accordingly submitted that when the Assessing Officer after due verification of the details furnished by the assessee substantiating the agricultural income has passed the order, the learned PCIT was not justified in revising/setting aside the same u/s 263 of the I.T. Act. 13. Relying on various decisions, she submitted that merely because the PCIT does not agree with the view tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case completed the assessment u/s 143(3) on 19.12.2019 accepting the returned income of Rs. 4,16,400/- and agricultural income of Rs.20,01,386/-. We find the learned PCIT called for the record and noted that as per the certificate issued by the Tehsildar, Chintalapudi Mandal of West Godavari Distt of Andhra Pradesh, the extent of assessee s agricultural land is 11.80m acres and not 24.80 acres as claimed by the assessee and therefore, the agricultural income earned by the assessee could not have exceeded Rs.10.00 lakhs. Therefore, the Assessing Officer had wrongly treated the difference of Rs.10,01,386/- as agricultural income which should have been brought to tax. He accordingly rejected the various explanations given by the assessee and invoking jurisdiction u/s 263 of the I.T. Act directed the Assessing Officer to redo the assessment after necessary verification. It is the submission of the learned Counsel for the assessee that during the course assessment proceedings the Assessing Officer after being satisfied that out of the total extent of 24.80 acres of land, 13 acres were converted into horticultural land during the financial year 2015-16 had accepted the agricultural inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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