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TMI Blog2015 (1) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... on as required by the Investigating Officer during the post search and seizure operations. In response to the notice u/s 153A served upon the assessee, the assessee again filed return of income admitting an income of Rs. 1,83,980/- and agril.income of Rs. 1,65,000/- on 29.09.2011. The case was selected for scrutiny and a notice u/s 143(2) was served. In response to the notice, assessee provided all the information. The AO made an addition of Rs. 1,59,04,900/- on account of profit of sale of agricultural lands. The assessee preferred appeal before the CIT (A) and submitted that the agricultural lands were not being situated in any area within such distance not being more than 8 kms from the local limits of any municipality or cantonment board as specified by notification in official Gazette or in any area comprised within the jurisdiction or a cantonment board which has a population of not less than ten thousand and moreover not a capital asset under sec.2(14)(iii) of the I.T.Act. 3. The assessee submitted before the CIT(A) as follows: * Land admeasuring 16.24 acres of Deshmukh Village, Pochampalli Mandal, Nalgonda Distt. are agricultural lands. Copy of pattadar pass book issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a lands, mining is prohibited without taking/obtaining mining lease rights from the Directorate of Mines and Geology. Royalty and seionerage have to be paid to the Deptt. for each cubic metre of metal excavated/exploited. * The purpose for which the land was put to use by the byuer after the sale is immaterial. The buyer would take approvals for conversion of land and do plotting. This would not change the character of the land at the time of sale. * The total land is far away - around 18 kms from the municipal limits and even the cost of Rs. 10 lakhs per acre is not astronomical or "real estate rate". * The assessee also cited the following case laws in support of his contentions: (a) Officer Incharge, Court of Wards vs. Commissioner of Wealth Tax (72 ITR 552) (AP) (b) CIT vs. Siddharth J Desai (139 ITR 628 (Guj.) (c) CIT vs. Madhukumar N (HUF) - Karnataka High Court (d) CIT vs. Jitender Ram Mittal (162 ITR 371) (e) Hon'ble ITAT Delhi order dated 13.04.2012 in the case of Chand Prabha Jain (f) Manibhai Motibhai Patel vs.CIT (132 ITR 120) (Guj.) * The assessee was admitting agricultural income to tax from these lands all these years. * Further except 0.33 guntas purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for agricultural purposes and the agricultural income has been admitted year after year since their purchase which goes back to 1990-91. Copies of IT Return for A.Y 2000-01 to A.Y 2007-08 were enclosed. * The mere fact that the assessee could not produce any evidence in support of having conducted agricultural operation do not make the lands non-agricultural. On ths issue, the Hon'ble ITAT Hyderabad 'A' Bench in the case of Alapati Madhavi & Others vs. DCIT, Central Circle -6 Hyderabad stated that it is uncommon to keep any documentary evidence for agricultural expenditure or for sale of the agricultural produce. In the statement recorded by the AO on 29.10.2013, the assessee in response to Q.No.4 has stated as follows: "Q.No.4 Considering the absence of the details of agricultural operation in the documents submitted by you, how do you justify your claim? Ans: I don't have any evidence. However, I have carried on agricultural operations on this land and I have shown the agricultural income". * The land on the relevant date has not ceased to be put to agricultural use nor was it put to any alternative use. Out of the total, a small bit of acre 1.20 guntas was used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lture impossible for at least another 1 acre 20 guntas apart from the 1 acre 20 guntas set aside by the appellant. Also, after such usage, cultivation of land and growing of crops almost immediately is also not probable". 7. It was submitted that 1 acre 20 guntas could be taken as land put to use by each of the brothers and not 3 acres in the case of Raghavalu alone. We find merit in the arguments of the ld Counsel. The CIT (A) cannot presume that another 1 acre 20 guntas are to be set apart by the assessee over the above 1 acre 20 guntas used by the assessee for storage of metal stone crushers and stocking yard for spalls, metal, metal dust, labour quarters etc. The excess of 1 acre 20 guntas wrongly looked by the CIT (A) towards metal stone crushers and stocking yard for spalls, metal, metal dust, labour quarters etc.could be kept for the purpose of cultivation of land and growing of crops. It seems that the ld CIT (A) has got confused about the extent of 3 acres being jointly held by the brothers and hence observation. Therefore, we clearly conclude that in our opinion, 1 acre and 20 guntas of land are taxable in the case of Shri Raghavalu, while the rest are exempt as they are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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