9911796707
TMI Blog2023 (10) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... f agreement entered into for acquiring lands on Tenancy, along with copy of Pahini, Bill in support of sale of agricultural products and details of expenses to verify the genuineness of the agricultural income declared by the assessee. The bills produced does not bear the name of the assessee nor the name of the original land owner. According to the AO, assessee violated the Law of Karnataka Land Reforms Act, which was confirmed by the Tahsildar, Shivamogga vide his letter dated 10.12.2009. On this basis, the lower authorities observed that no Tenancy shall be created or continued in respect of any land nor shall any land be leased for any period as per section 5(1) of the Karnataka Land Reforms Act, 1974. Accordingly, lower authorities confirmed the treatment of agricultural income declared by the assessee as non-agricultural income i.e. income from other sources. In our opinion, violation of Karnataka Land Reforms Act cannot be reason to disallow the claim of assessee as agricultural income. - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER For the Appellant : Shri V. Srinivasan, A.R. For the Respondent : Shri Ganesh R. Ghale ORDER PER CHANDRA POOJARI, ACCOUNTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration was 1.58% as against 4.26% in immediate earlier assessment year i.e. 2006-07, it was declined due to high competition and inflation. It is also submitted that fluctuating of GP rate from year to year is not in assessee s hand in this line of business since the assessee is in the line of textile and cloth business where the fashion changes on day to day basis. The relevant GP and net profit rate in earlier 3 years is as follows: Asst. Year Sales Gross Profit G.P. Ratio Net Profit as per P L A/c Net Profit ratio 31.03.2006 68,08,844 6,25,067 9.18% 2,89,890 4.26% 31.03.2005 41,27,106 3,40,489 8.25% 1,88,018 4.56% 31.03.2004 21,29,353 2,81,327 13.21% 1,11,612 5.24% 3.1 In my opinion, the mistake was crept while preparing the stock inventory manually by sales girl that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses will be borne by the person who under takes the Cheni and other agricultural expenses will be borne by the land owner. The income earned from the Cheni will be business income and not agricultural income. The onus lies with the assessee to prove the agricultural income which is exempt from tax. In this case assessee has not proved that the agricultural income is really the agricultural income earned from the agriculture. The AO further stated that the assessee camouflaged his other income as agricultural income. The assessee's claim that he has earned the agricultural Income from the lands taken on Geni or Lease or Land tenancy cannot be acceptable for the following reasons: (a) The Geni' or Lease or Land tenancy of lands is not permissible under Section 5 of the Karnataka Land Reforms Act, 1974. (b) The agreements on a Stamp Paper of Rs. 2/- cannot be acceptable for the reason that considering the quantum of transactions, the agreements should have been made on the stamp paper by paying stamp value to the extent which was required as per Section 17 of the Karnataka Stamp Act, 1957 and the said agreement should have been Registered before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.24 Acres 2,03,260 4 Mallappa Shankarappa 3.20 Acres 1,78,400 5 Mallikamba 7.43 Acres 61,400 6 S. Mallappa Shekarappa 3.10 Acres 89,275 5.1 The assessee has filed the lease deed from these parties for taking the lands from above parties. The assessee was asked to produce the copy of agreement entered into for acquiring lands on Tenancy, along with copy of Pahini, Bill in support of sale of agricultural products and details of expenses to verify the genuineness of the agricultural income declared by the assessee. The bills produced does not bear the name of the assessee nor the name of the original land owner. According to the AO, assessee violated the Law of Karnataka Land Reforms Act, which was confirmed by the Tahsildar, Shivamogga vide his letter dated 10.12.2009. On this basis, the lower authorities observed that no Tenancy shall be created or continued in respect of any land nor shall any land be leased for any period as per secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to her. Being so, I direct the AO to accept income of Rs. 61,400/- as against agricultural income only. (vi) Mr. Mallappa Sekharappa Rs. 89,275/-, who has not appeared before AO and also not confirmed. Hence, income of Rs. 89,275/- to be treated as income from other sources because of non-confirmation. Addition confirmed. 5.2 Thus, the above issue is decided as follows: 1 B.P. Shadaksharaiah Rs. 96,515 Addition deleted 2 Hyder Ali Khan Rs. 1,99,760 Addition confirmed 3 J.L. Jayasheela Rs. 2,03,260 Remitted to AO for fresh consideration 4 Mallappa Shankarappa Rs. 1,78,400 Remitted to AO for fresh consideration 5 Mallikamba Rs. 61,400 Addition deleted 6 S. Mallappa Shekarappa Rs. 89,275 Addition confirmed. 6. In the result, the appeal of the assessee is partly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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