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TMI Blog2013 (10) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein the Hon'ble High Court observed that, "Sections 153A, 153B and 153C were inserted in the Income-tax Act, 1961, with effect from June 1, 2003, in Chapter XlV. These sections are applicable to search operations or requisitions made after May 31, 2003. Simultaneously section 158BI was inserted in Chapter XIV-B. By virtue of section 158BI of the Act, the various provisions of Chapter XIV-B of the Act are made inapplicable to proceedings under sections 153A and 153C of the Act. The effect of this is that while the provisions of Chapter XIV -B of the Act limit the inquiry by the Assessing Officer to those materials found during the search and seizure operation, no such limitation is found in so far as sections 153A and 153C of the Act are concerned. Therefore, it follows that for the purposes of sections 153A and 153C of the Act, the Assessing Officer can take into consideration material other than what was available during the search and seizure operation for making an assessment of the undisclosed income of the assessee" and decide the matter in accordance with law. Due payment of admitted tax by the assessee for assessment year – Held that:- The CIT(A) without pointing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hyd/2012 for A.Ys. 2002- 03 to 2005-06. ITA Nos. 1704, 1705, 1706 and 1707/Hyd/2012: 4. The grievance of the assessee in these appeals is with regard to treating agricultural income as regular income of the assessee. The learned AR submitted that the assessee is regularly declaring agricultural income in the return of income and the same cannot be considered as non-agricultural income on account of search action u/s. 132 of the Act on 9.10.2007 at the residence of the assessee. He submitted that there is no seized material, whatsoever, found during the course of search to treat the agricultural income declared by the assessee in regular return of income as 'income from other sources' while framing assessment u/s. 143(3) r.w.s. 153C of the Act. He relied on the order of the Tribunal dated 27.9.2013 in the case of DCIT vs. Kishoresons Detergents Pvt. Ltd. in ITA Nos. 1817 to 1820/Hyd/2012 wherein held as under: "13. We have heard the arguments of both the parties, perused the record and have gone through the orders of the authorities as well as the decisions cited. Additions have been made by the AO for the reason that the assessee has not admitted the normal profits from its m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CIT(A) in directing the AO to delete the additions made by holding that the additions made based on the percentage of net over gross adopted by the AO are held to be without any basis that can be justified on factual or legal grounds and the order of the CIT(A) is hereby confirmed dismissing the grounds of appeal raised by the revenue in this regard in all the years under consideration. 16. In the result, all the appeals being ITA No. 1817, 1818, 1819 1820/Hyd/2012 filed by the revenue are dismissed." 5. On the other hand, the learned DR submitted that as far as the appeals for the years i.e. AY 2002-03 to 2005-06 are concerned, the only ground relating to agricultural income is common for all these years under appeal. According to the AO, the lands received by the assessee through oral partition were barren lands situated at Vattinagulapalli village where no crops were cultivated. The AO obtained revenue records of the land i.e., Pahanis from Mandal Revenue Office and found that these lands are vacant. He referred to the order of Tribunal Hyderabad Bench in the case of Shri Suresh Kumar D Shah in ITA Nos. 420 to 425 dated 16-12-2011 wherein similar issue came up for he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ours the agricultural income disclosed in these years under appeal. Accordingly, the claim of the assessee under agricultural income is rejected and the action of the AO in treating the amounts as income from other sources for all the years under appeal i.e., assessment year 2002-03 to 2005-06 is sustained. 6. We have heard both the parties and perused the material on record. The contention of the assessee is that there is no seized material to treat the agricultural income as non-agricultural income while framing the assessment u/s. 143(3) r.w.s. 153C of the Act. In our opinion, determination of income consequent to search action by framing assessment u/s. 143(3) r.w.s. 153C of the Act is different from regular assessment and it is not a substitute for regular assessment. Being so, the Assessing Officer shall frame the assessment on the basis of incriminating material found during the course of search action u/s. 132 of the Act and other material gathered subsequent to search action. In the present case, we are unable to appreciate on the basis on which seized material the AO came to the conclusion that the assessee has not earned agricultural income. In our opinion, it is appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 which goes to the root of the matter. This appeal was un-admitted by the CIT(A) on the reason that the assessee has not paid admitted tax. 9. The learned AR submitted that the assessee filed his return of income for A.Y. 2006-07 on 12th March, 2007 and paid admitted tax at Rs. 32,618. He also produced copy of return bearing acknowledgement No. 0501007093 and challan for payment of Rs. 32,618 paid in Bank of India on 9 March, 2007. 10. The learned DR relied on the order of the CIT(A). 11. We have heard both the parties and perused the material on record. In our opinion, there is due payment of admitted tax by the assessee for assessment year under consideration. Being so, the CIT(A) without pointing out the non-payment of admitted tax to the assessee, he is not justified in dismissing the appeal of the assessee in limine. Accordingly, we remit the entire issue back to the file of the CIT(A) to decide the issue raised by the assessee in his appeal on merit. Assessee's appeal is allowed on this ground. We decline to entertain the other grounds raised by the assessee as these grounds are not at all adjudicated by the CIT(A). The CIT(A) is directed to decide the grounds raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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