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TMI Blog2014 (11) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... compound wall with metallic gate on which the name Hariyalee Nursery was fabricated - The compound had some shade nets in which no plants were seen and some plants standing therein distinctly had appearance of plant brought from somewhere and stored - The Inspector has doubted about the genuineness of the agricultural income - The AO recorded the statements of the assessee’s son and he came to conclusion that assessee has not carried any agricultural activities and he has not produced any ornamental plants etc. - the CIT(A) has held that the assessee has carried out agricultural activities which has been verified by the AO - the CIT(A) was of the view that the assessee has carried out agricultural activities - as per the documentary evidence the land exists, therefore, proper course for the AO was to make enquiry from the respective land records officer and he should find out whether any agricultural activities was carried out or not - The AO failed to make the enquiry and he jumped to conclusion that no agricultural activities was carried out - assessee has produced all the documentary evidence to show that assessee has in fact carried out agricultural activities – the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer restored. 2.1. The assessee has filed the return of income on 30.09.2009 with total income at ₹ 6,13,536/- and claimed exemption on agricultural income of ₹ 24,27,770/-. The assessee has claimed the exempt income from agricultural activities carried on by him. The Assessing Officer tried to verify the holding of land (area survey nos., location-address) of self and family members; copy of form No. 1 and (xiv) in respect of each land showing recording of the crops done for kharif and vaingon seasons; details of lands held on lease, if any; name of the agricultural produce and quantity of produce; evidence for their sale proceeds, vouchers for the expenses incurred and copy of extract from the records of the competent authority in respect of crop(s) raised mode of transport of produce from the filed/farm, name and address of transport agency etc. During the course of assessment proceeding, the assessee has treated that assessee is proprietor of M/s Chandreshwar Farms which has its land at Cotombi, Chandor and cultivated ornamental plants. There ornamental plants were claimed to have been sold only to assessee s son Mr. Venkatesh Ganesh Prabhudesai, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion drawn by the A.O. is not based on facts and records but on guesswork, presumption and surmises, which cannot be sustained. The assessment has to be framed on the basis of entire records available with the A.O. and not on the bits and pieces taken out of them. In view of the above, the A.O. is directed to delete entire addition amounting to ₹ 47,85,000/- 2.3. The learned DR has submitted that Inspector has visited the plot at Cotombi, Chandor, Salete. The Inspector was rejected the plot at Cotombi, Chandor, Salcete and he found that at the visiting site there was no plants were seen and some plants standing therein distinctly had appearance of plants brought from somewhere and stored. The assessee has sold the plant to his Son who is PHD in Horticulture. The assessee Chandreshwar Farm has not registered with Labour Department and the assessee has not obtained any licence under Goa Fruit and Ornamental Plant Nurseries (Regulation) Act, 1995 (Goa Act 13 of 1997), Therefore, this evidence goes to show that assessee has not sold any agricultural produce, i.e., ornamental plant since 2002. Therefore, the action of the AO doubted about the genuineness of the agricultural inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, Goa and has been leased to son of the assessee Shri. Venkatesh Ganesh Prabhudessai from whom the assessee has obtained consent to carry out the agriculture activities. Copy of the lease deed and consent enclosed - Annexure I. 2. The assessee has been carrying out agriculture activities on the land for more than 10 years and has been consistently filing their return of income. The books of accounts of the assessee has been audited by Chartered Accountant u/s 44AB of The Income Tax Act 1961 and the copy of the audit report along with the profit and loss account and balance sheet is enclosed - Annexure II. 3. Assessees son Shri. Venkatesh Ganesh Prabhudessai having academics of Ph.D. in Horticulture is proprietor of M/s. Hariyalee Nursery and he takes job works for landscaping, gardening and supply of plants from different parties in Goa. M/s. Hariyalee Nursery purchases most of its plants requirement from M/s. Chandreshwar Farms. M/ s. Hariyalee Nursery regularly accounts the purchases made by them from M/s. Chandreshwar Farms in the normal course of business and the income of M/s. Hariyalee Nursery is taxed as business income. Considering that 90% of the sales made by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Acalyphas, Ixora, Gaiphimia, Erenthemum, Alpinia, Ophiophogon, Dianella, Hamalia etc., and other foliage flowering varieties different Palm varieties , different varieties ground covers like Zebrina, Iresene, Alternenthera, various creepers varieties, grass varieties like Mexican, Doob grass, Bermuda Paspalawm, various varieties of Bomboos etc. 6. I also observed in the nursery, that big size plants like Cycas, Palms, ficus varieties and foliage and flowering plants are grown. 7. I also observed that plant varieties like varieties of lilys and bulbous plants are multiplied by germinating seeds and bulbs . -Copy of the report enclosed - Annexure V. D. All the above clearly states the existing of the farm at M/s. Chandreshwar Farms at Survey No. 11, Kinaya Xetavoril Muddi, Cotombi, Quepem, Goa. 5. Further, the assessee s non registering of the nursery for licence from The Goa Fruit and Ornamental Plant Nurseries (regulation) Act, 1995 (Goa Act 13 of 1997) should not restrict the assessee from claiming the income earned from agricultural activities as agriculture income. We rely upon the below decided judgments in the matter. [2008] 167 TAXMAN 151 (UTTARAKHAND) HIGH COURT O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome according to the A. 0., the A. 0. has not made any efforts to find out the real source of her income, which he has chosen to term as deposits made from undisclosed sources. There is nothing in the statement of Mr. Venkatesh also, which even remotely indicates that, plants were not grown by the appellant. The A.O. writes that appellant is a 71 year old retired teacher. What could be an undisclosed source for such an old lady? It is clear from the facts of this case that the A. 0. has completed assessment with a pre-meditated mind and the conclusion drawn by the A. 0. is not based on facts and records but on guess work, presumption and surmises, which cannot be sustained. The assessment has to be framed on the basis of entire records available with the A.O. and not on the bits and pieces taken out of them. In view of the above, the A.O. is directed to delete entire addition amounting to ₹ 47,85,000/- Further, all the above issues were raised by the assessee with the CIT (A) and also the documents were submitted during the course of the assessment proceedings as such assessee request for taking the above on record and disposal of the appeal while upholding natural just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 995 (Goa Act 13 of 1997). In the case of Assistant Commissioner of Income Tax vs. A.P. Forest Department, 23 Taxman.com it is held that if the assessee has not obtained any valid licence from concerned authority for carrying out nursery but if he proves that he has carried out agriculture activities, the assessee is entitled for exemption in respect of such agricultural activities. Therefore, the Assessing Officer s objection is already decided by the Tribunal that valid licence is not necessary for claiming the exemption for agriculture activities. The Assessing Officer has objected that assessee has not carried out any agricultural activities and no land is situated where the assessee claims to have grown the nursery plant. The assessee has submitted before us Deed of Lease on page 6 to13 of paper book. The assessee has taken plot of land for agriculture purpose from Devasthan and the lease agreement was for period of 20 years. The assessee is growing plant on this land. The assessee has obtained the licence from Directorate of Agriculture which is at page 48 of the paper book. The licence was obtained on 3.2.2012 and the assessee has obtained the licence for carrying out the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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