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TMI Blog2013 (12) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... . Assessment was originally completed on 16.11.2007 under section 143(3) of the Act. However, assessment was set aside by the CIT vide his order under section 263 of the I.T. Act dated 24.09.2010. In pursuance of the said order of the Commissioner, assessment was completed under section 143(3) on a total income of ₹ 48,85,230/- after making the following additions/disallowances. (i) Treating of the income from letting out of poultry sheds as income from house property as against business claimed by the assessee ₹ 2,80,000/-. (ii) Treating the sale of agricultural lands as long term capital gains ₹ 46,05,230/-. 3. On appeal against the assessment made as above, the CIT(A) though concurred with the Assessing Officer in so far as assessment of rental income under the head House Property , deleted the addition made by the Assessing Officer in respect of capital gains on sale of agricultural land. 4. Aggrieved by the relief of ₹ 46,05,230/- granted by the CIT(A), Revenue is in appeal before us vide ITA.No.457 458/Hyd/2012. Whereas, assessee through its appeal ITA.No.360/Hyd/2012 contested the addition of ₹ 2,80,000/- made by treating the rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.49,96,750 Less: Cost of acquisition ₹ 3,47,474 Indexed cost of acquisition 3,47,474 x 480 ₹ 3,91,520 Long term capital gains on sale of land Rs.46,05,230 8. The AO stated that the main reason for holding that these lands are not agricultural were that the land in question was being used for poultry farm and lease rentals had been offered to tax. He also stated that the land was situated within 8 kilometers from the limits of Bibinagar. 9. During the appeal proceedings before CIT(A) the assessee contended that there was a factual error in the order of Assessing Officer as well as in the order of CIT-IV, Hyderabad passed u/s.263 of the Act. It was contended that the land which was sold was agricultural land and was different than the lands on which poultry business was being carried out. To prove this point, a certificate from Tahisildar, Bibinagar, MOU regarding the lands sold and certificate from Sarpanch, Gram Panchayat, Raheemkhanguda were produced as additional evidence before CIT(A) during the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced all the certificates issued by the Sarpanch, Gram Panchayat, Raheemkhanguda and Bibinagar in this order. From the evidence available, it is clear that the lands which were sold were agricultural land beyond 8 kilometers from the nearest municipality. Further, agricultural operations were carried out during the year in question i.e. when they were sold and lands were different from those on which poultry farming was done. Hence, we confirm the order of CIT(A) in deleting the addition made by the Assessing Officer and dismiss the departmental appeal vide ITA.No.457/Hyd/2012 for the assessment year 2005-2006. 13. In the result the department appeal is dismissed. 14. ITA.No.360/Hyd/2012 (Assessee s Appeal) : The only grievance is with regard to treatment of rental income from letting out of property as Income from House Property instead of Business Income . 15. Brief facts are that the assessee is in the business of poultry farms. Assessee leaded out poultry sheds for 8 months starting from August, 2004 on a monthly rent of ₹ 50,000/-. Assessing Officer brought the said rental income for 8 months to tax under the head Income from house property . In that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f actions to be undertaken for the purpose of earning income. As against this, in the facts of the present case, there is no element of any organized set of activities carried out by the assessee during the year and the only rental income is being received from the property. With these observations, the CIT(A) confirmed the action of the Assessing Officer in treating the rental income as Income from House Property . Since, the CIT(A) has elaborately discussed various decisions of Apex Court, jurisdictional High Court and others on the point in dispute, including the decision of Apex Court in the case of Shambhu Investments (supra) relied upon by the learned Counsel for the assessee before us, we find no infirmity in the Order of the CIT(A). 20. We accordingly, uphold the Order of the CIT(A) on this issue and reject the grounds of the assessee in its appeal. Assessment year 2006-2007 : 21. In the appeal of the Revenue for the assessment year 2006- 2007 (ITA.No.458/Hyd/2012) the first issue involved relates to treating the sale of agricultural land as resulting in capital gains and consequently making an addition of ₹ 78,83,030/-. Facts and circumstances leading to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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