2016 (1) TMI 1214 - AT - Income Tax

Income from the activity of the nursery - whether is agricultural income and exempt u/s.10(1)? - assessee s contention that he is the owner of the agricultural land on which he has grown nursery plants - Held that - Similar issue was considered by the Tribunal in assessee s own case for the assessment year 2007-08 2015 (11) TMI 586 - ITAT CHENNAI the decision taken by the CIT(Appeals) treating the income from nursery as agriculture income is justified and as in similar circumstances, in the case of CIT v. Soundarya Nursery (1998 (8) TMI 37 - MADRAS High Court ), the Jurisdictional High Court has held that the income from the sale of plants grown in pots and the sale of seeds derived on account of cultivation by the assessee was agricultural income. The facts of the present case are similar to that of the Jurisdictional High Court, we have no hesitation in following the same. - Decided in favour of assessee Reopening of the assessment based on audit objection - Held that - Reopening on the basis of audit objection was upheld as valid by the Supreme Court in CIT v. P. V.S. Beedies Pvt. Ltd (SC) (1997 (10) TMI 5 - SUPREME Court ). - Decided in favour of revenue

Summary

Issues:
1. Acceptance of agricultural income claim by the assessee.
2. Challenge against the reopening of assessment.

Analysis:
1. The appeals and cross objections were against the Commissioner of Income-tax(Appeals) orders for multiple assessment years. The Revenue contended that the assessee's income from nursery plants should not be considered agricultural income. However, the Tribunal referred to a previous decision and upheld the CIT(Appeals) decision, citing precedents where income from similar activities was deemed agricultural income. The Tribunal dismissed the Revenue's appeal based on these findings, emphasizing consistency with past judgments.

2. The assessee challenged the reopening of assessment within four years from the end of the relevant assessment year. The Tribunal referenced a Supreme Court ruling to validate the reopening based on audit objections, highlighting that factual errors or omissions pointed out by the audit party could warrant reassessment. Consequently, the Tribunal rejected the assessee's objection regarding the reopening of assessment. Ultimately, both the Revenue's appeals and the assessee's cross objections were dismissed by the Tribunal, concluding the case.