COMMISSIONER OF INCOME TAX vs. RAJDHANI NURSERIES LTD

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ITA - 976 / 2009HC Delhi14 October 20093 pages
For Petitioner: R.D.JOLLY
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the income was indeed agricultural income, supported by previous assessments and Supreme Court rulings. No new material was found during the search to justify reopening the assessments.

What were the facts?

The assessee claimed income from production and sale of ornamental and vegetative plants as agricultural income, which was accepted in regular assessments. A search operation was conducted, leading to reopening of assessments.

What were the issues?

Whether the income derived from the sale of ornamental and vegetative plants constitutes agricultural income and if reopening of assessment was justified based on the search operation.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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% 14.10.2009

1-6#

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,

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Commissioner of Income Tax, 193 ITR 321, as the income claims 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.

i.K. SIKRI, J

SIDDHARTH MRIDUL, J.

October 14, 2009

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