COMMISSIONER OF INCOME TAX vs. RAJDHANI NURSERIES LTD

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ITA - 982 / 2009HC Delhi14 October 20093 pages
For Petitioner: R.D.JOLLY
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the income claimed as agricultural income was accepted by the Revenue in regular assessments, both before and after the search. No fresh material surfaced during the search to justify reopening the assessments.

What were the facts?

The assessee claimed income from ornamental and vegetative plants as agricultural income, which was accepted by the Assessing Officers in regular assessments. A search and seizure operation was conducted, leading to reassessments.

What were the issues?

Whether the reopening of assessment was justified based on the search operation when the income was already accepted as agricultural income in regular assessments.

Which sections of the Income-tax Act were involved?

Section 68

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Cases cited in this judgment(2)Show list

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1-6#

% 14.10.2009

Present:

Ms. Sonia Mathur for the appellant.

Mr. R.M. Mehta for the respondent in ITA Nos. 952, 956

976, 981 & 982/2009.

+ ITA No. 951/2009 & CM No. 13298/2009

ITA No. 952/2009 & CM Nos. 13299-300/2009

ITA No. 956/2009 & CM Nos. 13359-360/2009

ITA No. 976/2009 & CM Nos. 13381-382/2009

ITA No. 981/2009 & CM Nos. 13384-385/2009

ITA No. 982/2009 & CM Nos. 13386-387/2009

(Common Order)

The respondent/assessee herein, which was earlier known as M/s. Sudhatha Mercantile Ltd., is having income from production and sale of ornamental plants and other vegetative plants. As per the assessee, its owns 126.6 acres of agricultural land along with its subsidiaries and had also taken on lease vast areas of land from other related companies for undertaking its agricultural operations. It had been filing its return of income regularly, as per which the income from the aforesaid operations is exempted from the tax on the ground that it was an agricultural income. The Assessing Officers (AO), accepting this plea of the assessee, passed assessment orders treating the same as agricultural income.

A search and seizure operation was carried out at the office premises of the assessee on 23.12.2003. On the basis of this search, the assessment orders relating to the assessment years 1998-99, 1999-2000,

2009·DHC·13414\_DB

Commissioner of Income Tax, 193 ITR 321, as the income claimed the assessee as agricultural income was accepted by the Revenue in the course of regular assessments not only before the search, but even after the search.

- b) The aforesaid operation/activity would constitute agricultural activity. In this behalf, the Tribunal has discussed the nature of activity in detail and applying the principles laid down by the Supreme Court in the case of Commissioner of Income Tax, West Bengal v. Raja Benoy Kumar Sahas Roy, 32 ITR 466. - c) The Tribunal observed that during the search no fresh material surfaced and, thus, there was no basis for reopening the assessment in question.

Having regard to the aforesaid, we are of the opinion that no question of law arises for consideration in these appeals, which are accordingly dismissed.

۰۸۱۳۰ ۱۱۸۸۱, ۲۰ ۸

SIDDHARTH MRIDUL, J.

October 14, 2009 nsk

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