DCIT, New Delhi V. M/s. Rajdhani Nursuries Ltd., New Delhi

ITA 1042/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3613 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-07-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Assessee Lawyers: AMIT GOEL
• Keywords: Business income
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH F DELHI ] BEFORE SHRI RAJPAL YADAV, JM AND SHRI K. D. RAN JAN, AM I. T. APPEAL NO. 1042 (DEL) OF 2011 ASSESSMENT YEAR : 2007-08. DY. COMMISSIONER OF INCOME-TAX, M/S. RAJDHANI NURSERIES LTD., C E N T R A L C I R C L E : 8, VS. B30, LAWRENCE ROAD. INDUSTRIAL AREA, N E W D E L H I. N E W D E L H I. P A N / G I R NO. AAA CV 2832 Q. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI AMIT GOEL, C. A.; DEPARTMENT BY : MS. PRATIMA KAUSHIK, SR. D. R. O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 200 7-08 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)-II, NEW DELHI. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) HAS ERRED IN GIVING RELIEF OF RS.21,45,622/- ON ACC OUNT OF BUSINESS INCOME WHICH HAD BEEN TREATED AS AGRICULTURAL INCOME BY THE LD. CIT(A)-II, NEW DELHI. BASIC AGRICULTURAL OPERATION HAD NOT BEEN CARRIED OUT AS THERE WAS NO GROWING OF SEEDS AND THERE IS NO PRODUCE FROM THESE SPECIFIC PLANTS. THE LD. CIT(A)-II, NEW DELHI, HAS ERRED IN HOLDING THE SALE OF PLANTS AS AGRICULT URAL INCOME WHEREAS THE FACT IS THAT THE BASIC AGRICULTURAL OPERATIONS WERE NOT CAR RIED OUT IN THIS CASE. FURTHER PARAMETERS SET BY THE HONBLE SUPREME COURT IN THE CASE OF RAJA BENOY KUMAR SAHAS ROY REPORTED IN 32 ITR 466 (SC) WERE NOT FULF ILLED IN THIS CASE; 2 I. T. APPEAL NO. 1042 (DEL) OF 2011 2. THE ORDER OF THE LD. CIT (APPEALS)-II, N EW DELHI IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 3. THE ONLY ISSUE FOR CONSIDERATION RELATES TO TREA TING THE BUSINESS INCOME OF RS.21,45,622/- AS AGRICULTURAL INCOME BY THE LD. CIT (APPEALS), NE W DELHI. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME CLAIMI NG AGRICULTURAL INCOME OF RS.24,84,666/- AND DIVIDEND INCOME OF RS.21,70,622/- EXEMPT UNDER SECT ION 10 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE OF PLANTS AND RUNNING A NURSERY. THE INCOME EARNED FROM SALE OF PLANTS HAS BEEN TREATED BY THE ASSESSEE AS AGRICULTURAL INCOME. HOWEVER, THE ASSESSING OFFICE R TREATED THE INCOME AS BUSINESS INCOME. ON APPEAL THE LD. CIT (A) RELYING ON THE DECISION OF T HE ITAT IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 1998-99 TO 2004-05 TREATED THE INC OME AS INCOME FROM AGRICULTURE OPERATIONS. 4. AT THE OUTSET, THE LD. AR OF THE ASSESSEE SUBMIT TED THAT THE ASSESSEES CASE IS COVERED BY THE DECISION OF THE ITAT AND, THEREFORE, THE LD. CI T (A) IS JUSTIFIED IN TREATING THE INCOME AS AGRICULTURE INCOME. ON THE OTHER HAND, THE LD. SR. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 5.1 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. ITAT, DELHI BENCH F IN THE CASE OF ASSESSEE IN I.T.A. N O. 1969 (DEL) OF 2010 FOR ASSESSMENT YEAR 2006-07 TREATED THE INCOME AS AGRICULTURAL INCOME R ELYING ON THE DECISIONS FOR ASSESSMENT YEARS 1998-99 TO 2004-05. WHILE ALLOWING THE RELIEF THE ITAT OBSERVED AS UNDER:- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE F IND THAT THE DISPUTE IN THE PRESENT CASE IS REGARDING THE NATURE OF PLANTATION INCOME OF RS.40,29,667/-. THIS INCOME WAS DECLARED BY THE ASSESSEE AS AGRICULTURE INCOME IN THE RETURN OF INCOME FILED BY THE ASSESSEE, BUT THE ASSESSING OFF ICER HAS TREATED THE SAME AS BUSINESS INCOME. IT IS NOTED BY THE ASSESSING OFFI CER ON PAGE 11 OF THE ASSESSMENT ORDER THAT THE FACTS OF THE CASE ARE SIMILAR TO THO SE OF ASSESSMENT YEAR 2005-06 3 I. T. APPEAL NO. 1042 (DEL) OF 2011 WHEREIN AGRICULTURE INCOME DECLARED BY THE ASSESSEE WAS TREATED AS BUSINESS INCOME. HENCE, ADMITTEDLY THE FACTS IN THE PRESENT YEAR AND THE FACTS IN THE ASSESSMENT YEAR 2005-06 ARE SIMILAR. IN ASSESSMENT YEAR 2005-06 THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASS ESSEE AND HENCE WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT Y EAR. WE, THEREFORE, IN THE PRESENT YEAR ALSO CONFIRM THE ORDER OF THE LD. CIT (APPEALS) BY RESPECTFULLY FOLLOWING THE TRIBUNALS DECISION RENDERED IN THE A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06. 5.2 SINCE THE FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS OF THE CASE FOR ASSESSMENT YEAR 2006-07 AND EARLIER YEARS, WE DO NOT FIND ANY REASON TO DIFFER FROM THE EARLIER DECISIONS OF THE ITAT ON THE ISSUE. ACCORD INGLY, THE ORDER PASSED BY THE LD. CIT (APPEALS) IS UPHELD. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON THE CLOSE OF HEARING ON : 11 TH JULY, 2011. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11 TH JULY, 2011. * MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 4 I. T. APPEAL NO. 1042 (DEL) OF 2011 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.