CIT v. Namdari Seeds - Taxpublishers.in

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The Tax Publishers2012 TaxPub(DT) 0337 (Karn-HC) : (2012) 043 (I) ITCL 0576 : (2011) 203 TAXMAN 0421 : (2011) 064 DTR 0153 INCOME TAX ACT, 1961 --Head of income--Agricultural income or business incomeAssessee having no agricultural land as its owned--On the return of incomes filed by the assessee for the assessment years 2000-01, 2001-02 & 2002-03, the assessing officer has passed order which came to be revised by the CIT in exercise of the power under section 263, vide orders dated 31-3-2005. The said order passed by the CIT in exercise of revisional jurisdiction was subject matter of challenge by the assessee before the Tribunal in ITA Nos. 664-666/Bang/2005. The Tribunal set aside the revisional order of the Commissioner. Aggrieved by the said order of the Tribunal, revenue has come up in appeal in ITA No. 1282/2006, 1283/2006 & 1284/2006 referred to above. In the said appeals, this Court has set aside the orders passed by the Tribunal by answering the substantial question of law in favour of the revenue and against the assessee. Held: To give effect to the revisional order passed by the CIT, the assessing officer issued fresh notices to the assessee, considered the books of accounts produced as also contentions raised by the assessee and passed an order by treating the income earned as agriculture income which was claimed as business income. In view of finding given by this court that income earned by the assessee is not agricultural income and for the reasons set out therein and following the same, the substantial questions of law is answered in favour of the revenue and against the assessee. Income Tax Act, 1961 Section 14 Income Tax Act, 1961 Sections 10(1) & 28(i) INCOME TAX ACT, 1961 --Revision under section 263--Erroneous and prejudicial orderLack of proper inquiries--The assessing officer gave effect to the order passed under 263 by CIT and passed assessment order on 10-3-2006 which came to be set aside by the CIT(A) in ITA Nos. 2, 3 and 4/AC-II(1)/CIT(A)-I/06-07 on 11-8-2006 and same was affirmed by ITAT, Bangalore-B Bench in ITA Nos. 966, 967 and 968 (Bang)/2006, dated 14-9-2007. Aggrieved by these orders of the ITAT, revenue has preferred ITA Nos. 75, 71 and 76 of 2008 questioning the correctness and legality of the same. The further facts are that assessee was showing business income, earned from manufacturing and sale of agricultural hybrid seeds and claimed deduction under section 80HHC. Later on, in relevant assessment years the assessee claimed that the same was an agricultural income though assessee was not having agricultural land as its owned. *Held:* A perusal of the order of the assessing officer would not depict that he has chosen one from out of the two courses available or permissible. Thus on facts, the assessee himself having treated the income as 'business income' had suddenly changed to the heading 'agricultural income' and hence, there were no two views available to the assessing officer even if so, it is not stated in the order as to what are those two views and as to how he intends to adopt one out of these two views in view of the same and thus, the order passed by the Tribunal is set aside. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 0337 (Karn-HC) : (2012) 043 (I) ITCL 0576 : (2011) 203 TAXMAN 0421 : (2011) 064 DTR 0153

INCOME TAX ACT, 1961

--Head of income--Agricultural income or business incomeAssessee having no agricultural land as its owned--On the return of incomes filed by the assessee for the assessment years 2000-01, 2001-02 & 2002-03, the assessing officer has passed order which came to be revised by the CIT in exercise of the power under section 263, vide orders dated 31-3-2005. The said order passed by the CIT in exercise of revisional jurisdiction was subject matter of challenge by the assessee before the Tribunal in ITA Nos. 664-666/Bang/2005. The Tribunal set aside the revisional order of the Commissioner. Aggrieved by the said order of the Tribunal, revenue has come up in appeal in ITA No. 1282/2006, 1283/2006 & 1284/2006 referred to above. In the said appeals, this Court has set aside the orders passed by the Tribunal by answering the substantial question of law in favour of the revenue and against the assessee. Held: To give effect to the revisional order passed by the CIT, the assessing officer issued fresh notices to the assessee, considered the books of accounts produced as also contentions raised by the assessee and passed an order by treating the income earned as agriculture income which was claimed as business income. In view of finding given by this court that income earned by the assessee is not agricultural income and for the reasons set out therein and following the same, the substantial questions of law is answered in favour of the revenue and against the assessee.

Income Tax Act, 1961 Section 14

Income Tax Act, 1961 Sections 10(1) & 28(i)

INCOME TAX ACT, 1961

--Revision under section 263--Erroneous and prejudicial orderLack of proper inquiries--The assessing officer gave effect to the order passed under 263 by CIT and passed assessment order on 10-3-2006 which came to be set aside by the CIT(A) in ITA Nos. 2, 3 and 4/AC-II(1)/CIT(A)-I/06-07 on 11-8-2006 and same was affirmed by ITAT, Bangalore-B Bench in ITA Nos. 966, 967 and 968 (Bang)/2006, dated 14-9-2007. Aggrieved by these orders of the ITAT, revenue has preferred ITA Nos. 75, 71 and 76 of 2008 questioning the correctness and legality of the same. The further facts are that assessee was showing business income, earned from manufacturing and sale of agricultural hybrid seeds and claimed deduction under section 80HHC. Later on, in relevant assessment years the assessee claimed that the same was an agricultural income though assessee was not having agricultural land as its owned. Held: A perusal of the order of the assessing officer would not depict that he has chosen one from out of the two courses available or permissible. Thus on facts, the assessee himself having treated the income as 'business income' had suddenly changed to the heading 'agricultural income' and hence, there were no two views available to the assessing officer even if so, it is not stated in the order as to what are those two views and as to how he intends to adopt one out of these two views in view of the same and thus, the order passed by the Tribunal is set aside.