DCIT, CHENNAI V. K.N.Pannirselvam, CHENNAI

ITA 2108/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8059 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 19-01-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 02-11-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Keywords: Reopening of assessment; Charitable institution; Audit objection; Tax effect
• Section: 80G

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , ! ' ! # . $% , & '( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NOS. 2108 TO 2111/MDS/15 & CO NOS. 6 TO 9/MDS/2016 (IN ITA NOS. 2108 TO 2111/M DS/15) / ASSESSMENT YEARS : 2004-05 TO 2006-07 & 2008-09 THE DEPUTY COMMISSIONER OF INCOME-TAX, NON-CORPORATE CIRCLE-2, CHENNAI 34. APPELLANT) V. SHRI K.N.PANNIRSELVAM, 3B, PARKLAND APARTMENT, KAMALABHAI STREET, T. NAGAR, CHENNAI 600 017. PAN AAOPP8632M RESPONDENT/CROSS-OBJECTOR) / APPELLANT BY : SHRI A.B.KOLI, JCIT / RESPONDENT BY : SHRI PHILIP GEORGE, ADVOCATE ! / DATE OF HEARING : 19.01.2016 '# ! / DATE OF PRONOUNCEMENT: 29.01.2016 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THE APPEALS BY THE REVENUE AND THE CROSS OBJECTI ONS BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE - - ITA 2108 TO 2111/15 CO 6 TO 9/16 2 COMMISSIONER OF INCOME-TAX(APPEALS) DATED 11.8.201 5 FOR THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07 AND 2008 -09. SINCE, THE ISSUES INVOLVED IN THE APPEALS AND THE C ROSS OBJECTIONS ARE COMMON, THEY ARE CLUBBED TOGETHER, H EARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY GROUND RAISED IN THE APPEALS OF THE REV ENUE IS THAT THE C IT(APPEALS) ERRED IN ACCEPTING THE ASSES SEES CONTENTION THAT HE IS THE OWNER OF THE AGRICULTURAL LAND ON WHICH HE HAS GROWN NURSERY PLANTS AND HIS INCOME FROM THE ACTIVITY OF THE NURSERY IS AGRICULTURAL INCOME AND EXEMPT U/S.1 0(1). IN THE CROSS OBJECTION, THE ASSESSEE IS CHALLENGING THE RE OPENING OF THE ASSESSMENT. 3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OP INION THAT SIMILAR ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ASS ESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08. THE TRIBUNAL VIDE ITS ORDER DATED 30.9.2015 IN ITA NO. 667/MDS/2015, HELD AS UNDER : 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, THE DECISI ON TAKEN BY THE CIT(APPEALS) TREATING THE INCOME FROM - - ITA 2108 TO 2111/15 CO 6 TO 9/16 3 NURSERY AS AGRICULTURE INCOME IS JUSTIFIED AND AS I N SIMILAR CIRCUMSTANCES, IN THE CASE OF CIT V. SOUNDA RYA NURSERY (241 ITR 530), THE JURISDICTIONAL HIGH COUR T HAS HELD THAT THE INCOME FROM THE SALE OF PLANTS GR OWN IN POTS AND THE SALE OF SEEDS DERIVED ON ACCOUNT OF CULTIVATION BY THE ASSESSEE WAS AGRICULTURAL INCOME . THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THAT O F THE JURISDICTIONAL HIGH COURT, WE HAVE NO HESITATION IN FOLLOWING THE SAME. FURTHER, IT IS NOTICED THAT TH E AHMEDABAD BENCH OF THE TRIBUNAL, IN THE CASE OF CIT V. BEST ROSES BIOTECH (P) LTD. [17 ITR (TRIB) 211], HELD THAT THE INCOME EARNED FROM FLORICULTURE ACTIVITY O F GROWING ROSE PLANTS ON LEASEHOLD AGRICULTURAL LAND FALLS WITHIN THE DEFINITION OF AGRICULTURAL INCOME AS P ER SEC.2(1A) OF THE ACT. IN VIEW OF ALL THESE DECISIO NS, WE ARE INCLINED TO UPHOLD THE ORDER OF THE CIT(APPEALS ) AND DISMISS THE APPEAL OF THE REVENUE. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF TH E TRIBUNAL, IN ASSESSEES OWN CASE, WE DISMISS THIS G ROUND OF APPEAL OF THE REVENUE. 4. WITHOUT PREJUDICE TO THE ABOVE, AS BROUGHT TO OU R NOTICE THAT THE TAX EFFECT INVOLVED IN THE REVENUES APPEA LS FOR THE ASST. YEARS 2004-05, 2005-06 AND 2006-07, IS BELOW ` 10 LAKHS. AS SUCH, IN VIEW OF THE CBDT CIRCULAR NO. 21/2015, DATED 10 TH DECEMBER, 2015, THE APPEALS FOR THE ASST. YEARS 2004-05, 2005- 06 AND 2006-07 ARE NOT MAINTAINABLE ON THIS FOOT AL SO. 5. THE ASSESSEE, IN ITS CROSS OBJECTION HAS CHALLEN GED THE REOPENING OF ASSESSMENT. REGARDING THE ISSUE OF RE OPENING, IT - - ITA 2108 TO 2111/15 CO 6 TO 9/16 4 WAS HELD BY THE TRIBUNAL AS UNDER : 5. REGARDING THE ISSUE OF REOPENING OF ASSESSMENT RAISED BY THE ASSESSEE IN THE CROSSOBJECTION IS CONCERNED, IT IS SEEN THAT THE AO HAS REOPENED THE ASSESSMENT WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSRNENT YEAR. THE ID.AR HAS PRIMARILY QUESTIONED THE REOPENING OF THE ASSESSMENT BASED ON AUDIT OBJECTION. WE DISAGREE WITH THIS CONTENTION OF THE LD. AR. REOPENING ON THE BASIS OF AUDIT OBJECTION WAS UPHELD AS VALID BY THE SUPREME COURT IN CIT V. P. V.S. BEEDIES PVT. LTD (SC) (237 ITR 13). THE HEAD NOTE I S QUOTED AS BELOW: REASSESSMENT - INFORMATION - INTERNAL AUDIT PAR T Y EN T ITLED TO POINT OUT FACTUAL ERROR OR OMISSION IN ASSESSMENT - REOPENING OF CASE ON BASIS OF ACTUAL ERROR POINTED OUT B Y I NTE R NAL AUDIT PARTY IS PERMISSIBLE UNDER LAW - ITO GRANTING DEDUCTION UNDER SECTION 80G ON ACCOUNT OF DONATION TO CHARITABLE TRUST OVERLOOK ING FACT THAT RECOGNITION GRANTED TO CHARITABLE TRUST H AD EXPIRED - REOPENING WAS ON BASIS OF FACTUAL INFORMATION GIVEN BY INTERNAL AUDIT PARTY - REOPENING OF ASSESSMENT VALID - INCOME-TAX ACT , 1961, S . 147(B) . ' IN VIEW OF THE ABOVE, WE AGREE WITH THE FINDINGS OF THE LOWER AUTHORITIES ON THIS ISSUE AND REJECT THE ISSU E - - ITA 2108 TO 2111/15 CO 6 TO 9/16 5 RAISED BY THE ASSESSEE IN THE CROSS OBJECTIONS. 6. IN THE RESULT, THE APPEALS OF THE REVENUE AND TH E CROSS- OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 29 TH OF JAN., 2016 AT CHENNAI. SD/- SD/- ( $ % . & '( ) ( ) * + , ) DUVVURU RL REDDY - ./012304556037- 8 9: /JUDICIAL MEMBER ! 9:;<<5=1>01>?@AB@3 )8 /CHENNAI, C9 /DATED, THE 29 TH JAN., 2016. MPO* 9D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H- /CIT(A) 4. H /CIT 5. FIJ K /DR 6. J(L /GF.