K. Srinivasulu, Hyd, Hyderabad V. DCIT, Central Circle-6, Hyderabad

ITA 1683/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66293 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 27-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: S RAMA RAO
• Keywords: Capital asset; Business income; Search and seizure
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1682/HYD/2011 :ASSESSMENT YEAR 2002-03 ITA NO.1683/HYD/2011 : ASSESSMENT YEAR 2003-04 ITA NO.1684/HYD/2011 : ASSESSMENT YEAR 2004-05 ITA NO.1685/HYD/2011 : ASSESSMENT YEAR 2005-06 ITA NO.1686/HYD/2011 : ASSESSMENT YEAR 2006-07 ITA NO.1687/HYD/2011 : ASSESSMENT YEAR 2007-08 SHRI K.SRINIVASULU, HYDERABAD ( PAN - AIBPK 4574 E ) V/S DY. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 6, , HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SMT. AMISHA S. GUPT DATE OF HEARING 26.7.2012 DATE OF PRONOUNCEMENT 25/09/2012 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: THIS IS A BUNCH OF SIX APPEALS FILED BY THE ASSE SSEE FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08. THESE APPEALS ARE DIRECTED AGAINST THREE SIMILAR BUT SEPARATE ORDERS OF THE CI T(A)-I, HYDERABAD, ALL DATED 20.7.2011. SINCE FACTUAL BACKGROUND AND T HE ISSUES ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 2 INVOLVED IN THESE APPEALS ARE COMMON, THESE APPEALS ARE BEING DISPOSED OFF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FACTS OF THE CASE IN BRIEF, COMMON IN ALL THESE APPEALS, AS TAKEN FROM THE APPEAL FOR THE ASSESSMENT YEAR 2002- 03, ARE THAT A SEARCH AND SEIZURE OPERATION UNDER S.132 OF THE INC OME-TAX ACT WAS CONDUCTED IN THE CASE OF RADHA REALTY GROUP ON 17.1 0.2007. CONSEQUENTLY, NOTICE UNDER S.153C WAS ISSUED BY THE ASSESSING OFFICER, IN RESPONSE THERETO ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2002-03, ADMITTING TOTAL INCOME OF RS.22,000 AND AGRICULTURAL INCOME OF RS.12,000. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE A SSESSEE HAD SOLD AGRICULTURAL LAND AT PEDDA MANGALRAM VILLAGE, MOINA BAD MANDAL AND PROFIT FROM THE SAME AMOUNTING TO RS.4,73,800 WAS C LAIMED AS EXEMPT STATING THAT THE LAND SOLD WAS NOT CAPITAL A SSET WITHIN THE MEANING OF S.2(14) OF THE ACT. THE ASSESSING OFFIC ER FOUND THAT THE ASSESSEE HAD PURCHASED THE LAND, DEVELOPED THE SAME AND DIVIDED THE LAND INTO PLOTS AND DEVELOPED PLOTS WERE SOLD T O VARIOUS PARTIES. THE ASSESSING OFFICER THEREFORE, HELD THAT THE PROF IT GENERATED ON THIS ACTIVITY IS TAXABLE UNDER THE HEAD BUSINESS INCOME . ACCORDINGLY, REJECTING THE CLAIM OF THE ASSESSEE, THE ASSESSING OFFICER TREATED THE PROFIT ON SALE OF LAND OF RS.4,73,800 AS BUSINESS I NCOME. THE ASSESSING OFFICER FURTHER, REJECTED THE CLAIM OF TH E ASSESSEE WITH REGARD TO AGRICULTURAL INCOME OF RS.12,000 IN THE ABSENCE OF ANY EVIDENCE FURNISHED BY THE ASSESSEE IN SUPPORT OF SU CH AGRICULTURAL INCOME, AND ADDED THE SAME AS ASSESSEES INCOME FRO M OTHER SOURCE ASSESSABLE TO TAX. THE ASSESSING OFFICER THUS COMP LETED THE ASSESSMENT ON A TOTAL INCOME OF RS.5,07,800, RAISIN G A TAX DEMAND OF RS.2,60,955, VIDE ORDER OF ASSESSMENT DATED 31.1 2.2009 PASSED UNDER S.143(3) READ WITH S.153C OF THE ACT. ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 3 3. ON APPEAL, THE CIT(A), DEALING WITH ASSESSEES CLAIM OF AGRICULTURAL INCOME, OBSERVED THAT IN THE WRITTEN S UBMISSION THOUGH THE APPELLANT HAS STATED TO HAVE SUBMITTED COPIES O F THE DOCUMENTS EVIDENCING PURCHASE OF AGRICULTURAL LAND THE SAME W AS IN FACT NOT ENCLOSED. IN SIMILAR MANNER NO CERTIFICATE FROM TH E VILLAGE REVENUE OFFICER WAS FILED THOUGH IT WAS CLAIMED TO HAVE BEE N ENCLOSED WITH THE SUBMISSION. THE CIT(A) NOTED THAT IT WAS THE C ONTENTION OF THE APPELLANT THAT HE HAD PURCHASED AGRICULTURAL LAND F ROM SRI N.KRISHNA REDDY AND SMT. M.NIRAMALA ON WHICH AGRICULTURAL OPE RATION WAS CARRIED ON INITIALLY AND HENCE THE INCOME GENERATED WAS AGRICULTURAL INCOME. THE CIT(A) POINTED OUT THAT NO DOCUMENTS WERE FILED IN SUPPORT OF THE SAME. OTHERWISE ALSO EVEN IF THE DE SCRIPTION IN THE DOCUMENTS IS SHOWN AS AGRICULTURAL LAND, THAT ITSEL F CANNOT BE A CONCLUSIVE PROOF THAT AGRICULTURAL OPERATION WAS AC TUALLY BEING CARRIED ON BY THE APPELLANT AND NO PROOF OF ANY AGRICULTURA L OPERATION OR SALE O AGRICULTURAL PRODUCE HAS BEEN FILED BY THE A PPELLANT IN SUPPORT OF THE CLAIM OF AGRICULTURAL INCOME. THE CIT(A) OP INED THAT SINCE THE APPELLANT HAS CLAIMED AN INCOME WHICH IS EXEMPT FRO M TAX, IT IS FOR THE APPELLANT TO CONCLUSIVELY PROVE THAT THE LAND O WNED BY HIM HAD IN FACT GENERATED AGRICULTURAL INCOME. FURTHER, IT IS ON RECORD THAT THE APPELLANT HIMSELF HAD SUB-DIVIDED THE SAID LAND AS PLOTS AND SOLD TO VARIOUS PARTIES AND SO IT CANNOT BE SAID THAT THE I NTENTION OF THE APPELLANT WAS TO DERIVE AGRICULTURAL INCOME FROM AC QUISITION OF THE SAID LAND. THE CIT(A) CONCLUDED THAT THE INTENTION OF THE APPELLANT IS TO EARN BUSINESS PROFIT BY DEVELOPING AND SELLING T HE LAND AFTER DIVIDING INTO SMALL PLOT, AND IT IS ALSO AGREED BY THE ASSESSEE THAT HE HAS SUB-DIVIDED THE PLOTS AND SOLD. THE CIT(A) FU RTHER HELD THAT THE ASSESSEE HAD DIVIDED THE PLOTS AND GROWN FRUIT ORCH ARDS THEREON AND EVEN FOR DEVELOPING A FRUIT ORCHARD THERE WILL BE E XPENDITURE FOR WHICH NO EVIDENCE HAS BEEN FILED THAT THE APPELLANT HAS DEVELOPED FRUIT ORCHARDS ON THE LAND ACQUIRED BY HIM. THE CIT (A) OBSERVED THAT THE APPELLANT CONTENDED THAT INITIALLY HE WAS GROWI NG PADDY AND ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 4 OTHER CROPS AND LATER ON DEVELOPED ORCHARDS AND HEL D THAT THE FACT THAT HE HAD SOLD PART OF THE LAND IS ITSELF A POINT ER TO THE FACT THAT AGRICULTURAL OPERATION WAS NEVER THE INTENTION OF T HE APPELLANT. 4. IN VIEW OF THE AFORESAID FINDINGS OF THE CIT(A) AND ALSO FOLLOWING THE APPELLATE ORDER PASSED BY HIM IN THE CASE OF SHRI D.S.KARUNAKAR REDDY FOR ASSESSMENT YEAR 2002-03, CO NFIRMING SIMILAR ADDITION MADE BY THE ASSESSING OFFICER, ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) UPHELD THE AD DITION MADE BY THE ASSESSING OFFICER, DISBELIEVING THE AGRICULTURA L INCOME CLAIMED BY THE ASSESSEE. 5. AS FOR THE ADDITION OF RS.4,73,800 MADE BY THE ASSESSING OFFICER, TREATING THE GAIN ON SALE OF PLOTS OF LAND AS INCOME FROM BUSINESS, IT WAS PLEADED BY THE ASSESSEE THROUGH WR ITTEN SUBMISSIONS FILED BEFORE THE CIT(A) THAT THE ASSESSEE HAD SOLD THE AGRICULTURAL LAND THOUGH IN BITS OF 1000 SQ. YARDS AND AGRICULTU RAL OPERATIONS WERE BEING CARRIED ON PRIOR TO THE DATE OF TRANSFE R AND EVEN AFTER THE DATE OF TRANSFER. IT WAS CLAIMED THAT THE INTE NTION OF THE ASSESSEE WAS TO CARRY ON AGRICULTURAL OPERATION AND NOT TO TREAT THE SAME AS STOCK IN TRADE. HOWEVER, AS THE ASSESSEE W AS NOT IN A POSITION TO CARRY ON THE AGRICULTURAL OPERATION BY HIMSELF ON THE ENTIRE LAND DUE TO HIGH COST OF MAINTENANCE, HE PRO POSED TO SELL A PART OF SUCH LAND. AS NO PARTY WAS COMING FORWARD TO PURCHASE THE LAND IN ACRES, THE SAME WAS DIVIDED INTO BITS OF 10 00 SQ. YARDS WITH A VIEW TO SELL THE LAND EASILY. IT WAS ALSO STATED T HAT ANOTHER COMPANY M/S. PINK ESTATES PVT. LTD. WAS PREPARED TO DEVELOP THE ORCHARDS FURTHER AND PREPARED TO MAINTAIN THE SAME SUBSEQUEN TLY. HENCE THE LAND WAS SOLD IN BITS. IT WAS THEREFORE, CLAIMED T HAT THE INCOME WAS NOT ASSESSABLE AS INCOME FROM BUSINESS, BUT AS INCO ME FROM CAPITAL GAINS, AND FURTHER SINCE THE LAND WAS AGRICULTURAL IN NATURE, THE SAME IS NOT SUBJECT TO CAPITAL GAINS TAX. ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 5 6. THE CIT(A) HOWEVER, WAS NOT CONVINCED WITH THE ABOVE SUBMISSIONS OF THE ASSESSEE. HE HELD THAT THE THE ASSESSEE HAS PURCHASED THE LAND WITH AN INTENTION TO DO BUSINESS IN REAL ESTATE, AND THE FACTS ON RECORD SHOW THAT THE INTENTION OF THE ASSESSEE RIGHT FROM THE BEGINNING WAS TO DO BUSINESS IN REAL ESTAT E BY DIVIDING THE LAND INTO SMALLER PLOTS AND SELLING THE SAME TO PAR TIES WITH AN INTENTION TO EARN PROFITS. FOR THESE REASONS AND A LSO FOLLOWING THE APPELLATE ORDER PASSED BY ME IN THE CASE OF SHRI D. S.KARUNAKAR REDDY FOR ASSESSMENT YEAR 2002-03, CONFIRMING SIMIL AR ADDITION MADE BY THE ASSESSING OFFICER, ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) UPHELD THE ADDITION MADE BY TH E ASSESSING OFFICER, TREATING THE PROFIT ON SALE OF PLOTS AS IN COME FROM BUSINESS. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE PREFERRED THE PRESENT SECOND APPEAL, IN ALL THE ASSESSMENT YE ARS 2002-03 TO 2007-08 IN ITA NOS. 1682 TO 1687/HYD/2011. 8. EFFECTIVE GROUNDS OF APPEAL RAISED BY THE ASSE SSEE IN ITS APPEAL FOR ASSESSMENT YEAR 2002-03, BEING ITA NO.16 82/HYD/2011, READ AS FOLLOWS- 1) . 2) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN TREATING THE AGRICULTURAL INCOME OF RS.12,000/- DERIVED BY THE APPELLANT HEREIN AS THE INCOME FROM OTHER SOURCES. 3) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN TREATING THE PROFIT EARNE D ON SALE OF AGRICULTURAL LAND OF RS.4,73,800/- AS THE INCOME FROM BUSINESS. HE OUGHT TO HAVE CONSIDERED THE FACT THAT THE LAND HELD BY THE APPELLANT WAS A CAPITAL ASSET AND NOT A BUSINESS ASSET AND THE GAIN ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 6 ON SALE OF SUCH AGRICULTURAL LAND IS EXEMPT FROM CAPITAL GAINS TAX. 4) THE LEARNED CIT(A) ERRED IN CONFIRMING THE CHARG ING OF INTEREST UNDER S.234A AND 234B OF THE I.T. ACT. 5). 9. GROUNDS TAKEN BY THE ASSESSEE, IN APPEALS FOR A SSESSMENT YEAR 2003-04 IN ITA NO.1683/HYD/2011, FOR ASSESSMEN T YEAR 2005- 06 IN ITA NO.1685/HYD/2011 AND FOR ASSESSMENT YEAR 2006-07 IN ITA NO.1686/HYD/2011 ARE IDENTICAL, EXCEPT FOR THE AMOU NTS INVOLVED IN GROUNDS 2 AND 3 ABOVE. IN THE OTHER TWO APPEALS, V IZ. FOR ASSESSMENT YEAR 2004-05 IN ITA NO.1684/HYD/2011 AND FOR ASSESSMENT YEAR 2007-08 IN ITA NO.1687/HYD/2011 ONL Y TWO EFFECTIVE GROUNDS ARE TAKEN BY THE ASSESSEE AND THE Y ARE IDENTICAL TO GROUNDS NO.2 AND 4 ABOVE, AGAIN EXCEPTING FOR THE A MOUNT MENTIONED IN GROUND NO.2 ABOVE. 10. THE AMOUNTS OF ADDITIONS MADE BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE CIT(A) ON ACCOUNT OF DENYING T HE ASSESSEES CLAIM FOR AGRICULTURAL INCOME AND ADDITION MADE BY BRINGING TO TAX THE PROFIT ON SALE OF PLOTS OF LAND UNDER THE HEAD BUSINESS FOR ALL THE SIX YEARS UNDER APPEAL, ARE TABULATED HEREUNDER FOR READY REFERENCE- ASST . YEAR ADDITION MADE REJECT- ING THE CLAIM OF AGRICUL TURAL INCOME RS. ADDITION MADE UNDER THE HEAD BUSINESS FOR BRINGING TO TAX PROFIT ON SALE OF PLOTS RS. 2002-03 12,000 4,73,800 2003-04 11,200 89,800 2004-05 9,500 ------- 2005-06 10,750 1,69,800 2006-07 12,300 17,24,300- 2007-08 6,420 ----- ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 7 11. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S. R AMA RAO FILED WRITTEN SUBMISSIONS POINTING OUT THAT THE CASE OF S RI D.S. KARUNAKAR REDDY IN ITA NO. 752 TO 757/HYD/2011, WHICH WAS FOL LOWED BY THE CIT(A) IN DISMISSING THE ASSESSEES APPEAL IS ENTIR ELY DIFFERENT SET OF FACTS AND THE DECISION IS NOT APPLICABLE TO THE FAC TS OF THE CASE OF THE ASSESSEE. IT WAS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ENTIRE PROPERTY WAS PURCHASED BY SRI D.S. KARUNAKAR REDDY IN THE YEAR 2000 AND IMMEDIATELY IN THE SUCCEEDING YEAR HE PLOTTED AND SOLD THE LAND AND THIS HAS BEEN OBSERVED BY THE HONBLE TRIBUNAL AT PAGE 5 PARA 10 OF THE ITATS ORDER. 12. IN THE PRESENT CASE, THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE PROPERTY WAS PURCHASED VIDE SALE DEED REGISTERED AS DOCUMENT NO. 1849/95, DATED 31/07/95 FROM SHRI N . KRISHNA REDDY AND VIDE SALE DEED NO. 8227/98 DATED 23/10/19 98 FROM MAJJIGA NIRMALA. IT WAS ARGUED THAT AGRICULTURAL LA NDS WERE IN THE POSSESSION OF THE ASSESSEE FOR MORE THAN 5 YEARS AN D IT IS A FACT THAT THE LANDS WERE PURCHASED MUCH EARLIER TO THE DATE O F SALE. THE SECOND ARGUMENT TAKEN BY THE LEARNED COUNSEL WAS TH AT SRI D.S. KARUNAKAR REDDY WAS IN THE BUSINESS OF REAL ESTATE WHEREAS THE ASSESSEE IS AN AGRICULTURIST AND AT THE TIME OF TRA NSACTION OF SALE HE WAS ONLY AGRICULTURIST. THE LEARNED COUNSEL FOR TH E ASSESSEE POINTED OUT THAT IN THE CASE OF D.S. KARUNAKAR REDDY (SUPRA ) AT PAGE 6 PARA 10 OF THE ORDER, THE ITAT HAS OBSERVED THAT THERE W AS NO INTENTION OF CARRYING ON AGRICULTURAL OPERATIONS BY HIM WHEREAS IN THE CASE OF THE ASSESSEE AGRICULTURAL OPERATIONS WERE CARRIED ON FO R MORE THAN 5 YEARS AND THE TRANSACTION IN QUESTION IS SALE OF AG RICULTURAL LAND. ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 8 13. THE LEARNED DR SMT. AMISHA S. GUPT, ON THE OTHE R HAND, ARGUED THAT THE CASE OF SRI D. S. KARUNAKAR REDDY (SUPRA) SQUARELY APPLIES TO THE CASES OF THE ASSESSEE ALSO. 14. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REC ORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIN D MERIT IN THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE T HAT THE LANDS HAVE BEEN HELD AS AGRICULTURAL LANDS AND AGRICULTUR AL OPERATIONS HAVE BEEN CARRIED ON BY THE ASSESSEE TO EARN AGRICULTURA L INCOME. WE ARE INCLINED TO ACCEPT THE SUBMISSION OF THE ASSESSEE T HAT CIRCUMSTANCES HAD CHANGED SUBSEQUENT TO PURCHASE OF LAND AND IT WAS NOT POSSIBLE TO CARRY ON AGRICULTURAL OPERATIONS DUE TO HIGH CO ST OF MAINTENANCE AND ALSO DUE TO LABOUR PROBLEMS I.E., IN PROCURING FARM WORKERS, AND THE ASSESSEE HIMSELF HAD SUB-DIVIDED THE LANDS AS P LOTS OF 1000 SQ.YARD EACH FOR DEVELOPING THEM INTO ORCHARDS WIT H FRUIT BEARING TREES AND THE SAID BITS OF LAND WERE SOLD AS ORCHAR DS TO PINK ESTATES PVT. LTD., WHICH WAS MAINTAINED BY PINK ESTATES PVT . LTD. WITH FRUIT BEARING TREES ON BEHALF OF THE MEMBERS, WHO PURCHAS ED THE ORCHARDS. WE OBSERVE THAT THE CONDITIONS PREVAILING WITH RESP ECT TO MANAGING AGRICULTURAL OPERATIONS HAVE INDEED BECOME MORE DIF FICULT AND CHALLENGING THAT THE PERSONS WHO HAVE BEEN AGRICULT URISTS HAVE STARTED EXPLOITING THEIR LAND, FOR THE REAL ESTATE VALUE BY PLOTTING THEM. WE ARE OF THE OPINION THAT THE PRESENT CASE I S DIFFERENT FROM THE CASE OF SRI D. S. KARUNAKARA REDDY (SUPRA) RELI ED UPON BY THE CIT(A) AS THE ASSESSEE IN THE CASE UNDER CONSIDERAT ION WAS BASICALLY AN AGRICULTURIST AND WAS CARRYING ON AGRICULTURAL O PERATIONS FOR THE INITIAL 5 YEARS AND LATER ON CONVERTED THE SAME INT O ORCHARDS AND SOLD THEM TO PINK ESTATES PVT. LTD. HENCE, THE ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO REJECTING TH E CLAIM OF THE ASSESSEE AS AGRICULTURAL INCOME AND ADDITION MADE O N THE PROFIT ON SALE OF AGRICULTURAL LAND TREATING THE SAME AS BUSI NESS INCOME, CANNOT BE SUSTAINED. ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 9 15. FURTHERMORE, THE ASSESSEE HAS SOLD THE BITS OF LAND PLOTTED AS ORCHARDS CONSISTING OF 1000 SQ.YARDS EACH, STILL, H OLDING THE CHARACTER OF AGRICULTURAL LAND. FRUIT BEARING TREES EARNING A GRICULTURAL INCOME HAD BEEN MAINTAINED BY M/S PINK ESTATES PVT. LTD. A ND THE ASSESSEE HAS NOT RESORTED TO PLOTTING OF LAND FOR THE PURPOS E OF BUILDING HOUSES AS HOUSING PLOTS. IN THESE CIRCUMSTANCES, THE LAND HELD BY THE ASSESSEE IS A CAPITAL ASSET AND NOT A BUSINESS ASSE T AND THE SALE OF SUCH AGRICULTURAL LAND IS EXEMPT FROM CAPITAL GAINS TAX AND CANNOT BE TAXED AS BUSINESS INCOME. 16. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE ASSESSEES APPEALS ON BOTH THE GROUNDS RAISED BY TH E ASSESSEE NAMELY, I) TREATING THE AGRICULTURAL INCOME AS THE INCOME FROM OTHER SOURCES. II) TREATING THE PROFIT EARNED ON SALE OF AGRICULTU RAL LAND AS INCOME FROM BUSINESS. 17. THE ASSESSEE HAS RAISED BOTH GROUND NOS. I) AND II) AS ABOVE IN PARA NO. 16 IN AY 2002-03 BEING ITA NO. 1682/HYD/11 , 2003-04 BEING ITA NO. 1683/HYD/11, AY 2005-06 BEING ITA NO. 1685/HYD/11, AND IN AY 2006-07 BEING ITA NO. 1686/HYD/11 AND THE SAME ARE ALLOWED. 18. THE ASSESSEE HAS RAISED ONLY GROUND NO. (II) AS ABOVE IN PARA 16 IN AY 2004-05 BEING ITA NO. 1684/HYD/11 AND IN AY 2007-08 BEING ITA NO. 1687/HYD/11, IS ALSO ALLOWED. 19. THE LAST ISSUE INVOLVED IN THESE APPEALS RELATE S TO CHARGING OF INTEREST UNDER S.234A, 234B AND 234C OF THE INCOME- TAX ACT. ITA NO.1682 TO 1687/HYD/11 S HRI K.SRINIVASULU 10 CHARGING OF INTEREST UNDER THESE SECTIONS IS CONSEQ UENTLY IN NATURE, THEREFORE, THE AO IS DIRECTED ACCORDINGLY. 20. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 25/09/2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT/- 25 TH SEPTEMBER, 2012 COPY FORWARDED TO: 1. SHRI K.SRINIVASULU, C/O SHRI S. RAMA RAO, ADVOCA TE, FLAT NO. 102, SHRIYAS RESIDENCY, ROAD NO. 9, HIMAYATNAGAR, HYDERABAD. 2. 3. DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 6, HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS) I, HYDERABAD 4. COMMISSIONER OF INCOME-TAX(CENTRAL), HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S/KV