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TMI Blog2012 (12) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... a copy of Girdwari & certificate issued by the Sarpnach. As per these documentary evidences, the assessee had discharged its onus. Therefore, AO was not justified in rejecting assessee’s contention with regard to the said agricultural income. In favour of assessee - I.T.A. No.442(Asr)/2011 - - - Dated:- 18-7-2012 - SH. H.S. SIDHU AND SH. B.P.JAIN, JJ. Appellant by:Sh. R.L. Chhanalia, DR Respondent by:Sh. Satish Bansal, CA ORDER PER BENCH ; This appeal of the Revenue arises from the order of the CIT(A), Amritsar, dated 25.05.2011 for the assessment year 2008-09. 2. The Revenue has raised following grounds of appeal: 1. Whether on the facts and in the circumstances of the case, the CIT(Appeals), Amritsar was justified in deleting the addition of Rs.4,78,02,000/- made by the Assessing Officer to the returned income, as a business profit, instead of agricultural income. The Assessing Officer by giving sound reasoning in the assessment order passed has established that the land sold was not an agricultural land but it was a stock-in-trade and the profit so earned was business profit. 2. Whether on the facts and in the circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h transfer as accepted by the Stamp Valuation Authority and no dispute was raised. It was also argued that the assessee had sold 15K 18M land on January, 2008 as agriculture land which has been clearly mentioned in the registered sale deed and the rate of valuation as applicable to agriculture land was applied and accepted by the State Government Authority and no dispute was raised. It was further stated that the population of residents living in that area was less than 10000 as per certificate of Tehsildar, which has not been doubted and the distance of land situated from the outer limit of Municipal Corporation being more than 8km the sale proceed accrued as agricultural income to the assessee was covered u/s 2(1A) of the Act. It was further contended that the explanation to section 2(1A) restricts the income to be treated as Agricultural Income if the land sold is within 8 km from limits of municipal corporation or the population is more than 10000 as per last census as per section 2(14)(iii). It was stated that the AO supplied a copy of letter of District Town Planner Gurgaon on 28.12.2010 indicating that the distance between Village Fazilpur and Municipal Corporation is less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce between both the places is more than 8 km. Since no sufficient time was given to the assessee to rebut certificate which was not showing the correct distance as required under the law and the Assessing Officer relied upon said certificate, even though objected during the assessment proceeding, the certificate now given by Senior Town Planner showing the correct status may be accepted. 7.2. It was further argued before the ld. CIT(A) by submitting the explanation that the aassessee purchased the land as agricultural land and sold the land as agricultural land. The assessee had never applied for the permission to convert this land from agricultural to non agricultural. The land was cultivated for produce for self consumption. The surroundings of land had been carrying on mainly of agriculture activities. The land is situated outside municipal limits. 7.3. It was argued that on the basis of above facts, the assessee has treated the profit on sale of agriculture land as a agriculture income u/s 2(1A) of the Act. Section 1(1A)(a) reads as under: (a) any rent or revenue derived from land which is situated in India and is used for agricultural purposes; Explanation 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng documents during assessment proceedings: (i) Copy of Mutation as per Revenue records to confirm that it is an agricultural land as per revenue record. (ii) Distance Certificate issued by Tehsildar dated 28.10.2010 state that this land falls outside 8 km of municipal corporation limits of Gurgaon as on January, 2008. (iii) Another certificate issue by Tehsildar dated 30.12.2010 reconfirming the above fact. (iv) Surveyor Report from approved Surveyor on a detailed MAP of the area from M.C. till the land situated calculating the distance by more than 8KM. (v) The population certificate issued by Sarpanch Gram Panchyat confirming that the population of Village Fazilpur Jharsa is less than 10000. (vi) Certificate issued by Sarpanch Gram Panchyat Fazilpur Jharsa stating that the agriculture produced was grown on the said land in the year 2007. (vii) Memorandum of Income Expenditure Account of agriculture activities. (viii) Reply of assessee dated 15.11.2010 confirming that the Sarson was grown for the year under consideration. 7.7. It was argued that the AO has relied upon the letter by the District Twon Planner confirming that the motorable distance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities nor for the use of the land for agriculture activities. The report of Patwari confirmed that the land had grass at the time of inspection. It was argued that rather on the contrary it confirmed that prior to 2-3 years, the agriculture activities were carried out. The assessee relied upon the decisions of various courts of law in this regard. The remand report was taken from the additional evidence, in which the AO had repeated the findings in the original assessment order. The assessee had also submitted the explanation with regard to the remand report which are at pages 30 to 33 of ld. CIT(A) s order. 8. After considering the submissions of the assessee before the ld. CIT(A), the additional evidences, the remand report and the counter comments of the assessee and on perusal of the record, we concur with the views of the ld. CIT(A) contained in paras 6 7 of his order. In that during the assessment proceedings, the AO was required to comment upon assessee s exhaustive written submissions dated 17.02.2011 alongwith its enclosures and alongwith additional evidences i.e. copy of Girdawari dated 16.03.2011, copy of distance certificate bearing Memo No.2152 dated 08.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever taken placed on this agricultural land. b. In the revenue records, the land is appearing as agricultural land atleast till the date of sale of land. c. There is no material on record to show that in any of the revenue records, this land has been used for the purpose other than agricultural activities. d. Most of adjoining areas were being used for agricultural activities and were not developed for commercial activities. e. The applicant has never applied for change of land used either for whole or part of it from agricultural to non agricultural land. f. No part of this land was sold previously by the applicant for non agricultural activities. g. The land sold was on acreage basis and not on yardages. h. Even the ld. AO has considered it as a capital asset mentioned in the two notices dated 24.12.2010 issued by him as well as in the body of assessment order. i. No evidence has been brought on record to prove that the capital asset has been converted into stock in trade to treat as business income by ignoring section 45(2) of the Income-tax Act. j. Even the circle rates mentioned by the AO are for agricultural land in acreage. Selling of asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n within a short period of six months by acquiring a residential property at New Delhi. Therefore, the AO was not justified in making addition of Rs.4,78,02,000/- treating assesse s agricultural income, as business income. The same has rightly been deleted by Ld. CIT(A). 10. As regards treatment of agricultural income of Rs.40,000/- as undisclosed income, the assessee had furnished a copy of Girdwari pertaining to the earlier financial years 2005-06 2006-07 that crop of Sarson was grown and cultivated in the assessee s land-holdings and out of the said Sarson crops, some crop was retained to be used as Sarson seeds in the next years. Ex-Sarpanch of Gram Panchyat of Village Fazilpur Jharsa, Form J No.111 dated 15.03.2008 duly verified by Sh. Jasmeet Singh on 13.12.2010. As per these documentary evidences, the assessee had discharged its onus. These evidences cannot be brushed aside by the A.O. The assessee had been using the neighbourer s tube well for water purposes. The statement of original seller for development of land does not hold any significant and evidentiary value against the assessee. Therefore, as per copy of Girdwari and certificate issued by the Sarpnach, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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