Shri Madan Mohan Das Shah (HUF), Secunderabad V. Dy.CIT., CentralCircle-2, Hyderabad

ITA 203/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87354 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 10-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Keywords: Capital asset; Search and seizure
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 202 & 203/HYD/2014 ASSESSMENT YEAR: 2004-05 & 2005-06 SHRI MADAN MOHAN DAS SHAH (HUF), HYDERABAD. PAN AAFHM5887E VS. DY. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 2, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS REVENUE BY : SHRI RAJAT MITRA DATE OF HEARI NG 16-02-2015 DATE OF PRONOUNCEMENT 20-02-2015 O R D E R PER SAKTIJIT DEY, J.M.: THESE APPEALS PERTAINING TO AYS 2004-05 AND 2005-0 6 BY ASSESSEE ARE DIRECTED AGAINST A COMMON ORDER DATED 27/01/14 PASSED BY LD. CIT(A)-I, HYDERABAD. 2. THE EFFECTIVE GROUNDS RAISED BY ASSESSEE, WHICH ARE COMMON IN BOTH THE APPEALS, ARE AS UNDER: 1. THE ORDER OF LD. CIT(A), HYDERABAD IS ASSESSING THE AGRICULTURE INCOME OF RS. 50,000 AS INCOME FROM OT HER SOURCES IS UNSUSTAINABLE BOTH UNDER LAW AND ON FACTS. 2. THE LD. CIT(A) FAILED TO NOTE THAT THE LANDS IN QUESTION WERE AGRICULTURAL LANDS AND ERRED IN ASSESSING THE INCOM E FROM AGRICULTURE UNDER THE HEAD INCOME FROM OTHER SOURCE S. 3. THE LD. CIT(A) RELIED ON EXTRANEOUS GROUNDS TO C OME TO THE CONCLUSION THAT THE LANDS IN QUESTION WERE NOT AGRI CULTURAL LANDS. 2 ITA NOS. 202 & 203/HYD/2014 SHRI MADAN MOHAN DAS SHAH(HUF) 4. THE LD. DCIT FAILED TO NOTE THAT IN THE PROCEEDI NGS OF DY. COLLECTOR AND MRO OF RAJENDRA NAGAR MANDAL ON 12/08 /2005 THERE IS A CLEAR FINDING THAT THE LAND SITUATED IN SURVEY NOS. 262 & 263 AT VATTINAGULAPALLY VILLAGE WERE AGRICULTURAL LANDS AND THEREFORE OUGHT TO HAVE CLEARLY HELD THAT THE LANDS IN QUESTION WERE AGRICULTURAL LANDS AND THE INCOME DISCLOSED AS ARISING THEREFORE WERE AGRICULTURAL INCOME. 3. AS CAN BE SEEN, THE ONLY ISSUE ARISING OUT OF TH E GROUNDS RAISED IS WITH REGARD TO DECISION OF THE DEPARTMENT IN TRE ATING AGRICULTURAL INCOME OF RS. 50,000 SHOWN BY ASSESSEE AS INCOME F ROM OTHER SOURCES. 4. AS FACTS ARE IDENTICAL IN BOTH THE APPEALS, FOR THE SAKE OF BREVITY, WE WILL REFER TO THE FACTS AS INVOLVED IN AY 2004-05. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL. THERE WAS A SEAR CH AND SEIZURE OPERATION IN THE RESIDENTIAL PREMISES OF ASSESSEE O N 09/10/07. IN PURSUANCE TO THE SEARCH AND SEIZURE OPERATION, A NO TICE U/S 153A OF THE ACT WAS ISSUED TO ASSESSEE ON 20/10/08 CALLING UPON HIM TO FILE HIS RETURN OF INCOME. IN RESPONSE TO SUCH NOTICE, A SSESSEE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 66,3 90 AND AGRICULTURAL INCOME OF RS. 50,000. IN COURSE OF THE ASSESSMENT P ROCEEDING, AO NOTICED THAT ASSESSEE WAS THE OWNER OF AGRICULTURAL LAND TO THE EXTENT OF ACRE 3.27 GUNTAS SITUATED IN SURVEY NO. 262 & 26 3 AT VATTINAGULAPALLY VILLAGE, RAJENDRA NAGAR MANDAL, WH ICH WAS SOLD TO M/S SPLENDID APARNA PROJECTS PVT. LTD., OUT OF WHIC H, LAND TO THE EXTENT OF ACRE 1.36 GUNTAS WAS ACQUIRED BY STATE GO VT. UNDER THE LAND ACQUISITION ACT ON PAYMENT OF COMPENSATION. AS SESSEE, HOWEVER, DID NOT DECLARE ANY CAPITAL GAIN ON SUCH T RANSACTIONS. AO NOTED THAT AGRICULTURAL INCOME DISCLOSED BY ASSESSE E IN THE IMPUGNED AY WAS NOT DISCLOSED IN THE EARLIER YEARS. AO FOLLO WING THE OBSERVATIONS MADE BY HIM IN THE ASSESSMENT ORDER PA SSED FOR AY 2006-07, WHEREIN IT WAS HELD THAT AGRICULTURAL INCO ME DECLARED BY ASSESSEE IS ONLY FOR CLAIMING EXEMPTION FROM CAPITA L GAIN TREATED THE INCOME SO DECLARED AS INCOME FROM OTHER SOURCES. BEING AGGRIEVED OF SUCH DECISION OF AO, ASSESSEE PREFERRED APPEAL B EFORE LD. CIT(A). 3 ITA NOS. 202 & 203/HYD/2014 SHRI MADAN MOHAN DAS SHAH(HUF) 5. LD. CIT(A) ALSO CONFIRMED THE VIEW OF AO BY HOLD ING AS UNDER: 9. FOR AYS 2004-05 AND 2005-06, THE APPELLANT HAS R AISED A GROUND THAT THE AO ERRED ON BOTH FACTS AND IN LAW I N TREATING THE AGRICULTURAL INCOME OF RS. 50,000 AS INCOME FROM O THER SOURCES. AT PARA-8 ABOVE, SINCE I HAVE AGREED WITH THE VIEWS OF THE AO THAT THE FILING OF RETURNS SHOWING AGRICULTU RAL INCOME FOR THE ABOVE TWO ASSESSMENT YEARS PRIOR TO THE SALE OF THE LANDS THROUGH DEVELOPMENT AGREEMENT WAS ONLY TO CLAIM EXE MPTION U/S 10(37)(II) OF IT ACT AND ALSO THE TREATMENT OF PROFITS ON SALE OF IMPUGNED LANDS AS RESULTING IN LONG TERM CAPITAL GAINS IS UPHELD, THE QUESTION OF AGRICULTURAL INCOME FROM TH E SAID LANDS DO NOT ARISE AND HENCE, THE ACTION OF THE AO IN TRE ATING THE AGRICULTURAL INCOME OF RS. 50,000 FOR AYS 2004-05 A ND 2005-06 AS INCOME FROM OTHER SOURCES IS CONFIRMED. 6. LD. AR SUBMITTED BEFORE US THAT AO AS WELL AS LD . CIT(A) WERE NOT JUSTIFIED IN DISALLOWING ASSESSEES CLAIM OF AG RICULTURAL INCOME ON FRIVOLOUS GROUND. LD. AR SUBMITTED THAT RIGHT FROM AY 1985-86 ASSESSEE HAD BEEN CONTINUOUSLY DECLARING AGRICULTUR AL INCOME IN THE RETURNS OF INCOME FILED FOR THE RESPECTIVE AYS. IN THIS CONTEXT, HE INVITED OUR ATTENTION TO THE COPIES OF INCOME-TAX R ETURNS, COMPUTATION OF INCOME SUBMITTED IN THE PAPER BOOK. LD. AR SUBM ITTED THAT WHEN THERE IS NO DISPUTE TO THE FACT THAT LAND OWNED BY ASSESSEE WAS AGRICULTURAL IN NATURE, WHICH IS ALSO PROVED FROM T HE PROCEEDING OF DY. COLLECTOR AND MRO, DATED 12/08/05, A COPY OF WHICH IS PLACED IN THE PAPER BOOK, THE DEPARTMENTAL AUTHORITIES ARE NOT CO RRECT IN HOLDING THAT THE AGRICULTURAL INCOME DECLARED BY ASSESSEE I S TO BE TREATED AS INCOME FROM OTHER SOURCES. LD. AR SUBMITTED THAT WHILE CONSIDERING SIMILAR ISSUE ARISING OUT OF THE DEPARTMENTS CLAIM THAT AMOUNT RECEIVED BY ASSESSEE TOWARDS SALE OF LAND IS NOT EX EMPT FROM CAPITAL GAIN AS IT IS NOT IN THE NATURE OF AGRICULTURAL LAN D, ITAT HAS DISAPPROVED THE VIEW TAKEN BY THE DEPARTMENT AND DI RECTED AO TO INSPECT THE LAND ALONG WITH ASSESSEE AND EXAMINE WH ETHER THE LAND IN QUESTION IS AGRICULTURAL OR NOT. LD. AR SUBMITTED T HAT IN SPITE OF SUCH DIRECTION, TILL DATE AO HAS NOT INSPECTED THE LAND TO ASCERTAIN THE NATURE OF LAND. THUS, IT WAS SUBMITTED BY LD. AR TH AT IN ABSENCE OF ANY POSITIVE EVIDENCE ON RECORD THAT ASSESSEE WAS N OT CARRYING ON 4 ITA NOS. 202 & 203/HYD/2014 SHRI MADAN MOHAN DAS SHAH(HUF) ANY AGRICULTURAL ACTIVITY, THE VIEW TAKEN BY DEPART MENT IN TREATING AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES IS NOT SUSTAINABLE. 7. THE LD. DR, ON THE OTHER HAND, SUBMITTED BEFORE US THAT AS ASSESSEE HAS NOT PROVED THE CARRYING ON AGRICULTURA L ACTIVITY OVER THE SAID LAND BY PRODUCING CORROBORATIVE EVIDENCE, CLAI M OF AGRICULTURAL INCOME CANNOT BE ACCEPTED. HE, FURTHER, DRAWING OUR ATTENTION TO THE FINDING OF AO, AS EXTRACTED IN PARA 4.1 OF LD. CIT( A)S ORDER, SUBMITTED THAT OTHER CO-OWNERS OF LAND HAVE DECLARED CAPITAL GAIN ON SALE/ACQUISITION OF SUCH LAND. THEREFORE, ASSESSEE S CLAIM THAT THE LAND WAS IN THE NATURE OF AGRICULTURAL LAND CANNOT BE ACCEPTED. 8. IN THE REJOINDER, LD. AR SUBMITTED THAT WHY AND UNDER WHAT CIRCUMSTANCES OTHER CO-OWNERS HAVE DECLARED CAPITAL GAIN IS NOT RELEVANT TO ASSESSEE AS ASSESSEES CLAIM HAS TO BE CONSIDERED ON ITS OWN FACTS. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. UNDISPUTED FACTS ARE, ASSESSEE WAS THE OWNER OF ACR E 3.27 GUNTAS OF LAND SITUATED IN SURVEY NO. 262 & 263 AT VATTINAGU LAPALLY VILLAGE, RAJENDRA NAGAR MANDAL. ON 27/01/06 HE ENTERED INTO AGREEMENT OF SALE WITH M/S SPLENDID APARNA PROJECTS PVT. LTD., FOR SALE OF THE LAND ADMEASURING ACRE 3.27 GUNTAS FOR A TOTAL CONSIDERAT ION OF RS. 2,60,60,000. THOUGH THE ENTIRE CONSIDERATION WAS PA ID BY M/S SPLENDID APARNA PROJECTS PVT. LTD. BETWEEN 27/08/05 AND 27/11/05, THE LAND WAS NOT REGISTERED IN THEIR NAME. IT IS AL SO A FACT ON RECORD THAT STATE GOVERNMENT FOR ITS ORR PROJECT, ACQUIRED THE LAND TO THE EXTENT OF ACRE 1.36 GUNTAS, OUT OF THE AFORESAID LA ND OF ACRE 3.27 GUNTAS ON PAYMENT OF COMPENSATION TO ASSESSEE. ASSE SSEE DID NOT DECLARE ANY CAPITAL GAIN ON THE PLEA THAT THE LAND BEING IN THE NATURE OF AGRICULTURAL LAND AND OUTSIDE THE PRESCRIBED LIM IT OF A NOTIFIED MUNICIPALITY IS NOT A CAPITAL ASSET, HENCE, EXEMPT FROM CAPITAL GAIN. AO, HOWEVER, DID NOT ACCEPT THE CLAIM OF ASSESSEE, WHICH WAS ALSO 5 ITA NOS. 202 & 203/HYD/2014 SHRI MADAN MOHAN DAS SHAH(HUF) CONFIRMED BY LD. CIT(A). WHEN ASSESSEE CAME UP IN APPEAL BEFORE THE TRIBUNAL FOR AY 2006-07 AND 2008-09, THE TRIBUN AL AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES AND EXAM INING THE EVIDENCES BROUGHT ON RECORD, HELD AS UNDER: 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND E XAMINED THE DOCUMENTS ON RECORD ALONG WITH THE ORDERS OF THE AUTHORITIES. FIRST OF ALL, WE HAVE TO ADMIT THAT THE ORDER OF THE A.O. SEEMS TO BE BASED ON SOME WRONG PRESUMPTIO NS AND BIAS AGAINST THE ASSESSEE FOR WHATEVER MAY BE THE REASON. THIS OPINI ON WAS FORMED ON NOTICING VARIOUS OBSERVATIONS OF THE A.O. STATED TO BE FINDINGS FOR REJECTING ASSESSEES CONTENTIONS. TO START WITH, A.O. MENTIONS THE FOLLOWING AS A FINDIN G OF FACT IN PARA -1. 1. THE PLAIN READING OF THE SAID AGREEMENT OF SALE THAT WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION R EVEALED A FACT THAT THE ASSESSEE HAS OFFERED TO SELL LAND ADMEASURING AC.3. 27 GTS SITUATED AT SURVEY NO. 262 & 263 OF VATINAGULAPALLI VILLAGE. THE AGREE MENT DID NOT MENTION THE FACT THAT IT WAS AN AGRICULTURE LAND. 11.1. CONTRAST TO THE ABOVE FINDING, THE AGREEMENT OF SALE, PLACED ON RECORD AT PAGE 215 OF THE PAPER BOOK, DATED 27.01.2006 HAS THE FOL LOWING SCHEDULE IN PAGE 4 OF THE DOCUMENT: SCHEDULE ALL THAT AGRICULTURAL LAND, ADMEASURING AC.3.27 GTS . IN SURVEY NOS. 262 & 263 SITUATED AT VATTINAGULAPALLI VILLAGE, RAJENDRANAGAR MANDAL, RANGA REDDY DISTRICT AND BOUNDED AS FOLLOWS : NORTH 20 ROAD SOUTH PART OF SY.NO.262 OF K. RADHIKA W/O. SRINIVAS A RAO EAST PART OF SY.NO.262 OF KRISHNA KUMAR DWARAKA DAS WEST PART OF SY.NO.263 OF SURESH KUMAR DWARAKA DAS. 11.2. THIS SCHEDULE IS PART AND PARCEL OF AGREEMENT AND CLEARLY INDICATES THAT THE LAND OF AC.3.27 GTS IN SURVEY NOS. 262 AND 263 ARE AGRIC ULTURAL LANDS. THEREFORE, THIS PARTICULAR FINDING OF THE A.O. THAT THE AGREEMENT DID NOT MENTION THE FACT THAT IT WAS AN AGRICULTURAL LAND IS PATENTLY WRONG. 11.3. VIDE PARA-2 IN PAGE 3, A.O. GIVES A FINDING THAT NEITHER SMT. LAKSHMI DEVI (MOTHER OF THE ASSESSEE) NOR COOWNERS WHO HAD PURCH ASED THE LAND IN 1967 ARE IN AGRICULTURAL OPERATIONS ON THAT LAND. THERE IS NO B ASIS FOR THIS FINDING AS ASSESSEE HAD ENCLOSED COPIES OF THE RETURNS FILED IN EARLIER A.Y S DISCLOSING AGRICULTURAL INCOME IN HIS RETURNS. ON WHAT BASIS THIS PARTICULAR FINDING WAS GIVEN IS NOT DISCERNIBLE FROM THE RECORD. A.O. ALSO RECORDS THAT HE HAS VISITED THE L AND AND FOUND THAT ENTIRE LAND WAS SURROUNDED WITH ROCKS AND MOUNTAINS AND NOT AMENABL E FOR CULTIVATION. THERE IS NO DATE OF INSPECTION NOR THE WITNESSES WHO CAME ALONG SO THAT THIS STATEMENT CAN BE ACCEPTED. IN FACT, ASSESSEE BROUGHT SOME PHOTOS, NO T PLACED ON RECORD, IN THE COURSE OF ARGUMENTS THAT THE LAND IS STILL UNDER CULTIVATION, PART OF THE LAND WHICH WAS NOT ACQUIRED. IF A.O. HAS VISITED AFTER ACQUISITION BY THE STATE GOVERNMENT AND SEEN PART OF 6 ITA NOS. 202 & 203/HYD/2014 SHRI MADAN MOHAN DAS SHAH(HUF) THE LAND ON WHICH ROAD WAS LAID THE ABOVE FINDING C OULD BE JUSTIFIED, BUT THERE IS NO SUCH CLARITY. THEREFORE, THE VERY FACT THAT A.O. VI SITED THE LAND COULD BE DOUBTED AS THERE IS NO OTHER CORROBORATIVE EVIDENCE THAT HE HA S VISITED THE SAID LAND. 11.4. NOT ONLY THIS, HIS FINDINGS IN PARA 5 ABOUT C ULTIVATION OF VARIOUS CROPS CAN ALSO BE REJECTED AS THEY ARE WITHOUT ANY BASIS. JUST BECAUS E ASSESSEE HAS MENTIONED THAT HE HAS CULTIVATED DIFFERENT TYPES OF CROPS, THE ARGUME NT CANNOT BE REJECTED WITHOUT ANY EVIDENCE TO THE CONTRARY. NO WHERE IT WAS MENTIONED THAT HE HAS CULTIVATED ONLY ON THE PIECE OF AC.3.27 GTS THAT ASSESSEE IS CULTIVATING T HE LAND BY GROWING VARIOUS CROPS. HE HAS MORE LAND AS STATED EARLIER TO AN EXTENT OF 15 ACRES. BE THAT AS IT MAY, ASSESSEE RELIED ON SOME PAHANI PATRIKAS OBTAINED AT A LATER POINT OF TIME WHICH INDICATE THAT THE LAND IS STILL AGRICULTURAL LAND. WHEREAS, THE A.O. SEEMS TO HAVE OBTAINED SOME PAHANIS FROM MANDAL REVENUE OFFICER, RAJENDRANAGAR MANDAL C OPIES OF WHICH ARE NOT PLACED ON RECORD. ASSESSEE SAYS THAT THESE WERE NEVER PUT TO THE ASSESSEE EXCEPT MENTIONING IN THE SHOW CAUSE NOTICE AS A.OS OBSERVATIONS. THI S ASPECT WAS ALSO VERIFIED BY US IN THE COURSE OF HEARING AND NOTHING WAS BROUGHT ON RE CORD ABOUT THE SOCALLED PAHANIES OBTAINED FROM MRO, RAJENDRANAGAR MANDAL. ASSESSEE I N FACT ASKED FOR CROSS- EXAMINATION OF THE SAID DOCUMENTS THROUGH THE MRO W HICH WAS DENIED STATING THAT THE AUTHORITY IS A GOVERNMENT AUTHORITY AND ASSESSE E NEED NOT CROSS-EXAMINE, WHILE A.O. REJECTING AT THE SAME TIME DOCUMENTS RELIED BY ASSESSEE. IN FACT, HE ALSO DOUBTED THE HORTICULTURAL OFFICERS REPORT GIVEN AT THE TIM E OF ACQUISITION OF LAND BY THE STATE GOVERNMENT, AS MENTIONED IN PAGE-6 ON THE REASON TH AT HORTICULTURE OFFICER WAS NOT AWARE OF THE SURVEY NUMBER AND NAME OF THE LAND LOR D WHEN HE QUESTIONED. THE ENTIRE TONE AND TENOR OF THE ORDER SEEMS TO BE TOTALLY BIA SED AGAINST THE ASSESSEE FOR REJECTING THE EVIDENCES FURNISHED BY THE ASSESSEE. 11.5. CONSIDERING THE FACT THAT ASSESSEE HAS SOLD A GRICULTURAL LAND WHICH IS AWAY FROM THE MUNICIPAL LIMITS ON WHICH THERE IS NO DOUBT AND FURTHER FACT THAT ASSESSEES LAND WAS ACQUIRED BY THE STATE GOVERNMENT AS AGRICULTURA L LAND AND BASED ON THE PAHANI PATRIKAS AND THE REPORT OF THE MRO AS WELL AS HORTI CULTURE OFFICER EVIDENCING THAT THESE SURVEY NUMBERS ARE HAVING AGRICULTURAL OPERAT IONS, WE CANNOT UPHOLD THE CONTENTIONS OF THE A.O. THAT THIS LAND IS NOT AGRIC ULTURAL LAND. PRIMA FACIE EVIDENCE INDICATES THAT ASSESSEE IS INDEED CULTIVATING THE L AND AND THE LAND IN QUESTION IS AGRICULTURAL LAND. SALE OF AGRICULTURAL LAND DOES N OT RESULT IN CAPITAL GAINS TAX AS AGRICULTURAL LAND IS NOT A CAPITAL ASSET UNDER THE DEFINITION OF CAPITAL ASSET IN THE INCOME TAX ACT. HOWEVER, SINCE THE A.O. DID NOT GIV E ANY OPPORTUNITY WHILE INSPECTING THE LAND NOR HE HAS GIVEN ANY OPPORTUNITY TO EXAMIN E THE MRO CERTIFICATES OBTAINED BY HIM, WE ARE OF THE OPINION THAT ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO SUPPORT HIS CONTENTIONS. ASSESSEE IS ALSO WILLING T O TAKE THE A.O. TO THE LAND TO SHOW THAT THE LAND IN QUESTION IS STILL AGRICULTURAL LAN D. THEREFORE, WE ARE OF THE OPINION THAT PHYSICAL VERIFICATION OF THE LAND WILL CLINCH THE I SSUE WITHOUT ANY DOUBT, SO THAT NOT ONLY ON LEGAL PRINCIPLES BUT ALSO FACTUALLY ALSO ASSESSE ES CONTENTIONS CAN BE PROVED OR DISPROVED. IN VIEW OF THIS, ORDERS OF A.O. AND LD. CIT(A) ARE SET ASIDE AND MATTER IS RESTORED TO THE FILE OF THE A.O. WHO SHOULD GIVE AN OPPORTUNITY TO THE ASSESSEE, INSPECT THE LAND ALONG WITH ASSESSEE AND EXAMINE WHETHER TH E LAND IN QUESTION IS/WAS AGRICULTURAL LAND OR NOT. A.O. IS DIRECTED NOT TO G ET PREJUDICED BY THE OBSERVATIONS OF THE A.O. IN EARLIER PROCEEDINGS AND SHOULD EXAMINE ALL THE CONTENTIONS DISPASSIONATELY WITHOUT ANY BIAS. IN CASE IT WAS PROVED THAT LAND I N QUESTION IS/WAS AGRICULTURAL LAND, CAPITAL GAINS ON THE SAID LAND DOES NOT ARISE AT AL L. ISSUE OF GIVING POSSESSION BECOMES ACADEMIC IN NATURE. THEREFORE, ASSESSEES GROUNDS A RE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 7 ITA NOS. 202 & 203/HYD/2014 SHRI MADAN MOHAN DAS SHAH(HUF) BEFORE US ALSO, IT IS THE CONTENTION OF THE LD. AR THAT TILL NOW THE BALANCE LAND, OUT OF ACRE 3.27 GUNTAS, IS STILL IN POSSESSION OF ASSESSEE AND AGRICULTURAL ACTIVITY IS BEING CARRIED ON. FURTHER, IT IS EVIDENT FROM RECORD ASSESSEE IN FACT IS DECLARING AGRICULTURAL INCOME FROM AY 85-86 ONWARDS. THE PROCEEDING OF DY. COLLEC TOR AND MRO DATED 12/08/05, A COPY OF WHICH IS AT PAGE 12 OF PA PER BOOK ALSO REVEAL THAT HE HAS OBSERVED THAT LAND SITUATED IN S URVEY NO. 262 ADMEASURING ACRE 3.27 GUNTAS IS AGRICULTURAL LAND A ND FRUIT GARDENS ARE EXISTING. THEREFORE, IN VIEW OF SUCH EVIDENCES SUBMITTED BY ASSESSEE AND ALSO THE FINDING OF THE COORDINATE BEN CH AS EXTRACTED HEREINABOVE, THE ALLEGATION MADE BY AO THAT ASSESSE E HAS NOT DISCLOSED ANY AGRICULTURAL INCOME PRIOR TO AY 2004- 05 AND 2005-06 APPEARS TO BE UNSUBSTANTIATED. BEFORE REJECTING ASS ESSEES CLAIM OF AGRICULTURAL INCOME AO MUST BRING MATERIAL ON RECOR D TO PROVE THAT NATURE OF LAND IS NOT AGRICULTURAL AND NO AGRICULTU RAL ACTIVITY IS/WAS CARRIED OUT ON SUCH LAND. THEREFORE, CONSIDERING TH E FACT THAT THE COORDINATE BENCH (SUPRA) HAS DIRECTED AO TO INSPEC T THE SUBJECT LAND AND ASCERTAIN WHETHER IT IS AGRICULTURAL LAND OR NO T, WE ARE INCLINED TO REMIT THE MATTER BACK TO THE FILE OF AO AND DIRECT HIM TO DECIDE THE ISSUE AFTER INSPECTION OF THE LAND. 10. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 20/02/2015. SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 20 TH FEBRUARY, 2015 KV 8 ITA NOS. 202 & 203/HYD/2014 SHRI MADAN MOHAN DAS SHAH(HUF) COPY TO:- 1) SHRI MADAN MOHAN DAS SHAH(HUF), SRI K.C. DEVDAS, 133/4, RP ROAD, SECUNDERABAD 500 003. 2) DCIT, CENTRAL CIRCLE 2, HYD. 3) CIT(A)-I, HYDERABAD 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.