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10-01-2019, Anil Gowda, Section 234A, 234B, Tribunal Bangalore

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2 months 1 week ago #8336 by amit
Section - 234A, 234B
Order Date - 10-01-2019
Favouring - Assessee Partly
Court - Tribunal Bangalore
Appellant - Anil Gowda
Respondent - ITO
Justice - CHANDRA POOJARI AM
Citation - 119Taxpundit132
Appeal No. - ITA No.1316/Bang/2018
Asstt. Year - 2014-15

Order

PER : CHANDRA POOJARI

This appeal by the assessee is directed against the order dated 02.02.2018 of the CIT(Appeals)-10, Bengaluru for the assessment year 2014-15.

2. The assessee has raised the following effective grounds:-

1. The learned Respondent Assessing Officer has erred in law by rejecting the agricultural income declared by the Appellant as stated above, on the ground that the land relating there too was purchased in the F.Y 2014-15, whereas the fact is that the Appellant had entered into an agreement of sale and taken the possession of the land and the cultivation is made in the F.Y 2013-14 itself.

2. The learned Respondent Assessing Officer has erred in law by rejecting the agricultural income, on the ground that the Appellant cultivated only "Jowar and Ragi" while the Appellant cultivated "Banana and Ginger" which are Commercial crops.

3. The learned Respondent Assessing Officer has erred in law by rejecting the agricultural income to the extent of Rs.29,32,653/-, on the ground that the sale consideration of the property was Rs. 27,00,000/-, since the land yield Agricultural receipts to the tune of Rs. 29,00,000/- cannot be imagined to be sold for Rs. 27,00,000/- by the seller. But the Assessing Officer failed to appreciate the fact that the seller is an ordinary agriculturist growing historical crops without employing much capital into the cultivation. Whereas the Appellant employed sizable amount of capital into the cultivation and growncommercial crops like
banana and Ginger which are of high value crops. The yield derived from the developed land with the hightech agriculture applying professional way of cultivation cannot be compared with the consideration paid to a land which was not properly looked after. Thus the comparison is the mismatch.

4. The learned Respondent Assessing Officer has erred in the law by rejecting agricultural income based on the departmental enquiry reports as the said report was not forth before the Appellant for rebuttal.

5. The rejection of the agricultural income by the learned Assessing Officer, advancing various other reasons enumerated in the order is not correct for the detailed explanation furnished by the Appellant, as recorded in the impugned order, itself.

6. The learned Respondent Assessing Officer has erred in law by levying penalty u/s 234A of the Act and 234B of the Act, totally Rs. 4,35,888/-.”

2. The facts of the case are that the assessee filed his return of income for the A.Y 2014-15 on 09-10-2015 declaring income of Rs. 2,18,280/- under the head salary and Rs. 29,32,653/- as agricultural income. The case was taken up for scrutiny and the assessment u/s 143(3) was completed on 30-12-2016 on a total income of Rs. 31,50,933/- making disallowance of the claim of earning agricultural income amounting to Rs. 29,32,653/-.

3. The facts leading to the addition on account of rejection of the claim of earning agricultural income are that during the year under appeal, the assessee was employed with M/s. Greens Farmtech Pvt. Ltd. from which he received salary of Rs. 2,18,280/-. He claimed before the AO that he purchased agricultural land from Mr. Nived Prasanna for a consideration of Rs. 27 lakhs vide sale deed dated 24-04-2014. The AO noticed that the schedule to the sale deed showed the area of the land at 26 acres and 9 guntas and was a dry land. Further, the AO noticed that the land was purchased in the FY 2014-15, whereas the agricultural income was shown for the period of 2013-14. Before the AO, the assessee stated that he entered into an agreement dated 11-01-2013 on the basis of which the owner of the land gave possession to him.

4. However, the AO was not impressed with the assessee’s explanation and he rejected the claim observing that the assessee claimed to have paid Rs. 15 lakhs on 17-01-2013 and the balance amount of Rs. 12 lakhs on the date of registration of the property i.e., 24-04-2014. But the sale deed disclosed that the entire amount of Rs.27 lakhs was paid on the registration of the property i.e. on 24-04-2014. The sale deed brought out the fact that the land was handed over to the purchaser on the date of registration of the property i.e. 24-04-2014. Hence, it was concluded by the AO that taking possession of the land in the financial year 2013-14 was an afterthought.

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