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TMI Blog2024 (6) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved various benches of the ITAT had considered the similar issue and decided the issue in favour of the assessee See HARRISONS MALAYALAM LTD. AND ORS. [ 2009 (5) TMI 124 - ITAT COCHIN] , GONTAK EXIMIS LTD. [ 2018 (5) TMI 1870 - ITAT DELHI] and NILGIRI TEA ESTATES LTD. [ 2012 (2) TMI 553 - ITAT COCHIN] wherein held once Assessing Officer has not treated the said gain for the purposes of book profit then by way of such ground the issue cannot be raised by the Department. Otherwise also when the income of agricultural land is exempt from tax, then the said exempt income cannot be added to the books profit while calculating the MAT u/s. 115JB - Decided in favour of assessee. - Shri S.Rifaur Rahman, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Assessee : Shri Amit Goel, CA, Sh. Pranav Yadav, Adv. For the Respondent : Shri Anshul, Sr. DR ORDER PER S.RIFAUR RAHMAN, AM: 1. This appeal has been filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [ Ld. CIT(A) , for short], dated 31/11/2023 for Assessment Year 2015-16. 2. The brief facts relating to the various grounds raised by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. CIT(A) dismissed the same and sustained the addition on merit made by the Assessing Officer. 6. Aggrieved with the above order, the assessee is in appeal before us raising the following grounds of appeal:- 1. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is non-est as it does not have DIN on the body of the assessment order and CIT(A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the rectification order passed u/s 154 by the assessing officer and the addition made therein are bad-in-law and without jurisdiction and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs. 1,65,27,700/- made by the assessing officer for the purpose of computation of book profit u/s 115JB is beyond the scope of provision of section 154 of the Act. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs. 1,65,27,700/-made by the assessing officer on account of gain on transfer of agriculture land for the purpose of computation of income w/s 115JB of the Act. 5. On the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issues which are debatable. In this regard, he relied on the following case laws:- -CIT vs. RTCL Ltd. (4) TMI 287-Delhi High Court -TS Balram, ITO vs. Volkart Brothers and Ors. 1971(8) TMI 3-Supreme Court 11. Further, he submitted that the case was selected for limited scrutiny and the issue of capital gain on sale of property being part of book profit u/s 115JB was not the issue/ground of selection of case under limited scrutiny. Therefore, such issue could not have been taken by invoking provisions of section 154 of the Act. In this regard, he relied on the following case law:- -CIT vs. Best Plastics Pvt. Ltd. [2006] (4) TMI 53- High Court Delhi -Shivalik Education and Placement Services Pvt. Ltd. vs. ACIT [2023] (12) TMI 1117 Delhi ITAT -Late Smt. Gurbachan Kaur vs. DCIT [2019] (12) TMI 495- Jaipur ITAT 12. On the other hand, the Ld. DR submitted that no doubt the case was selected for limited scrutiny and it is fact on record that the profit and sale of agricultural land is exempt from income tax, however, the profit earned by the assessee which are part of the book profit cannot be eliminated for determining the tax under MAT. Further, he submitted that the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on sale of agricultural land is agricultural income and the court further held that standing trees also form part of the immovable property and therefore contributed to agricultural income alone. The Hon'ble Supreme Court in the case of CIT v. All India Tea and Trading Co. Ltd. [1996 (3) TMI 4-SUPREME COURT) has held that the compensation received on requisition of agricultural land amounted to agricultural income. The Supreme Court again in the case of Singhai Rakesh Kumar v. Union of India (2000 (11) TMI 2-SUPREME COURT] has held that the income arising out of the transfer of such agricultural lands are not exigible to capital gains as they are in the nature of agricultural income. Assessee has sold a rubber estate with standing trees and all other paraphernalia known as Boyce Estate . There is no dispute that the said estate was in a rural area and outside the purview of any municipal limit. Therefore, in the light of the judgment of the Supreme Court and the hon'ble jurisdictional High Court in the case of CIT v. Alanickal Co. Ltd. [1986 (1) TMI 94- KERALA HIGH COURT), it is to be held that the profits arising from the sale of the rubber estate to the assessee on tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act do not, in our view, operate to extend the scope of total income' per section 5 on which the charge to tax u/s. 4 is attracted, but is only toward providing an alternative basis for computing the same. Reference by the Id. CIT(A) to the Circular No. 550 by the Board in this regard is in our view apposite, the receipt being admittedly a capital receipt. We therefore following the decision by the tribunal in the case of Harrisons Malayalam Ltd. vs. ACIT (supra). delete the inclusion of profit of 23.69 lakhs on account of sale of agricultural land, admittedly not a capital asset u/s. 2(14), in the computation of book profit u/s. 115JB of the Act. We decide accordingly Similarly, in the case of ITO vs. Gomantak Exims Ltd. in ITA No. 2708/Del/2012 dated 15/05/2018 in the Revenue appeal, the issue was decided in favour of the assessee:- 19. Coming to the issue of 115JB as raised in ground No. 3, we find that, firstly, neither the issue of computation or taxation of book profit u/s. 115JB has been raised by the Assessing Officer, nor such grounds were raised in the original grounds of appeal by the Department. Apart from that, once Assessing Officer has not treated the sai ..... 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