ITO, JAIPUR vs. HAR DEVI ASNANI, JAIPUR

PER SHRI KUL BHARAT, JM.

The Appeal by the Revenue, pertaining to the Assessment Year 2011-12, is

directed against the order of Ld. CIT (Appeals)-1, Jaipur dated 19 Dec. 2014.

The Revenue has raised the following grounds of appeal :-

“1. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs. 41,45,760/-, made on account of profit on sale of agriculture land.

assessment and the assessment u/s 143 of the Act, 1961(hereinafter referred to as

the Act.) was framed vide order dated 13/03/2014. While framing the assessment

the Assessing Officer noticed that during the year under appeal, the assessee had

2 ITA No.226/JP/2015 Smt. Har Devi Asnani, Jaipur.

claimed an amount of Rs. 41,45,760/- as exempt on the sale of agricultural land.

However, during the course of assessment, a revised computation of total income

was filed thereby the assessee offered profit of Rs. 4,82,675/- on sale of land

situated at Khasra No. 2086 at village- Rupangarh which was purchased from Smt.

Beena Jyaswal on 06.05.2010. This land was adjoining to assessee’s other land

which was sold during the year under appeal and the profit on sale of such land was

claimed to be exempt. However, the Assessing Officer proceeded to make addition

of the sale consideration pertaining to this part of land. Hence, made addition of Rs.

41,45,760/- on this account. Further, the AO rejected the claim of agriculture

income of Rs.8,66,056/-. Aggrieved by this, the assessee preferred an appeal before

Ld. CIT(A), who after considering the submissions, deleted both the additions. Now,

the Revenue is in further appeal before this Hon’ble Tribunal.

3 Ground no. 1, is against deleing the addition of Rs. 41,45,760/-. The Ld.

Departmental Representatives Shri R.A. Verma vehemently argued that the Ld.

CIT(A) fail to appreciate the fact in right perspective. He submitted that the Ld.

CIT(A) has just accepted the contention of the assessee without taking into account,

the fact that during the course of the proceedings the assessee herself had offered

profit on part of agricultural land, which was forming part of the same Khasra which

the assessee claim to be not taxable. The Ld. Departmental Representatives

submitted, under the facts of the present case when the assessee herself has

declared profit from sale of part of land. Therefore, the Ld. CIT(A) ought not to

have deleted the addition.

3 ITA No.226/JP/2015 Smt. Har Devi Asnani, Jaipur.

3.1 On the contrary, Ld. Counsel for the assessee supported the order of the Ld.

CIT(A) and submitted that there is not dispute with regard to the fact that the land

inquestion has been declared as ‘fixed asset’ by the assessee. He submitted that

distinguishing features between that the sale of the consideration of the part of the

land which was offered for taxation was in fact acquired a day before and the

holding period was just one day and in the case of the other part of the land it was

purchased in the year of 2005 and was no converted as ‘stock in trade’. He

submitted that there is not bar under the law that the assessee cannot keep two

portfolios, one in ‘investment’ and other being the ‘stock in trade’. He submitted

that in case of jeweler where he keeps jewellery as stock in trade and also keeps

jewellery as investment. In the present case admitted facts are that the part of land

has been declared by the assessee as fixed asset in the balance sheet. The

assessee has been carrying out agricultural activities on this land which is evident

from the record of the Revenue in the form of Khasra and Girdavari. He submitted

that even the agriculture income derived from such activities has been declared in

the income tax return of the assessee. Under these facts, the Ld. CIT(A) was

justified in deleting the addition.

3.2 We have heard the rival contentions, perused the material available on

record. The undisputed facts, which are available on the record are that the land in

question is an agricultural land and to this effect, finding is given by the Ld. CIT(A)

is not controverted by the Revenue. The Ld. CIT(A) has also given a finding that

this piece of land was not controverted into stock in trade to rebut this finding no

evidence is produced by the Revenue. Further, it is noticed that the contention of

4 ITA No.226/JP/2015 Smt. Har Devi Asnani, Jaipur.

the assessee is that agricultural activities were being carried out and the lands were

situated beyond the prescribed limit. This fact is also not rebutted by the Revenue

by placing any contrary material on record. Under these facts, we do not see any

reason to disturb the finding of the Ld. CIT(A), same is hereby affirmed. This

ground of the Revenue’s appeal is dismissed.

account of disallowance of agriculture income and taxing the same as income from

other sources. The Ld. Departmental Representatives has taken us, through the

assessment order and submitted that the AO made addition on the basis that the net

agriculture income as claimed by the assessee was not fully subject to verification.

He supported the order of the Assessing Officer.

4.1 On the contrary, the Ld. Counsel for the assessee reiterated the submissions

as made in the written submissions. He submitted that Assessing Officer drew

wrong inference of the registered documents i.e. purchase deed. He submitted that

subsequently the assessee installed the system of irrigation. He submitted that out

of agriculture income declared by the assessee of Rs. 8,66,056/- on account of

agriculture produce sold which was grown by the assessee herself. He submitted

that the AO has misconstrued the facts and failed to appreciate that a part of the

land was given on lease which fetched sum of Rs. 3,30,000/- and remaining part of

the land was under self cultivation and the crop as grown in that were duly reflected

in the Khasra Girdawari. In support of this the assessee had furnished sale vouchers

issued by the Krishi Upaj Mandi Samiti disclosing sale of agriculture produce to M/s

Maheshwari Traders. He submitted that Krishi Upaj Mandi Samiti is not under control

5 ITA No.226/JP/2015 Smt. Har Devi Asnani, Jaipur.

or connected with the assessee in anyway the Samiti is controlled and regulated by

the Government Regulation, there is no scope of manipulation. Under these facts,

he submitted that Ld. CIT(A) has rightly deleted the addition.

4.2 We have heard the rival contentions, perused the material available on

record. We find that Ld. CIT(A) deleted the addition has decided the issue in para

3.2.2 by observing as under:-

“3.2.2 I have duly considered AO’s contention and appellant’s submission, perused the materials on record, duly considered factual matrix of the case and also applicable legal position. Assessee contends that the aggregate income of Rs. 8,66,056/-, comprising of income from lease of agriculture land amounting to Rs. 3,30,000/- and income from agriculture produce amounting to Rs. 5,36,056/- has been disclosed in the return as exempt income. Assessee also submits that she did not show the stock of agriculture produce in her books of accounts nor record the expenses incurred by her for agricultural activities being carried on by her but has shown only the net receipts from sale of agriculture produce which is entered in her books of accounts and the cash so received is deposited in her bank account, over a period of time. This fact has been disclosed in here returns filed and the same has been admitted by the departmental in all the previous assessment made in here case. Assessee also contends that the excess stock of Jwar and Bajr, was stored at one of the assessee’s friend’s place on the farmer’s request which was subsequently sold to M/s Maheshwari Traders on 02.10.2010. In view of facts and circumstances stated above, I do not find any valid reason to disallow the claim and treat the same as income from other sources as has been done by the Ld. A.O. AO’s action in disallowing the agriculture income of Rs. 5,36,056/- and income from lease of agriculture

6 ITA No.226/JP/2015 Smt. Har Devi Asnani, Jaipur.

land of Rs. 3,30,000/- as exempt income by treating as ‘income from other sources’ and making addition of Rs. 8,66,056/- cannot be sustained.”

4.3 We find that Ld. CIT(A) has given a finding that the assessee has been

disclosing the only net receipts from sale of agriculture produce which is entered into

books of accounts and the cash of receipts is deposited in her bank account over a

period of time. This fact has been disclosed in earlier year has been accepted by

the Department. This finding is not rebutted by the Revenue by placing any

contrary material on record. Therefore, we do not see any finding into the order of

the Ld. CIT(A), same is hereby affirmed. This ground of the Revenue’s appeal is

dismissed.

Order pronounced in the open court on Friday, the 12th day of May 2017.

Sd/- Sd/- ( dqy Hkkjr) ¼foØe flag ;kno½ (VIKRAM SINGH YADAV) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 12/5/2017. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

7 ITA No.226/JP/2015 Smt. Har Devi Asnani, Jaipur.