ACIT, CHENNAI v. M/s. Bhavani Distilleries and Chemicals Ltd., CHENNAI

ITA 888/CHNY/2010 | 2007-2008
Pronouncement Date: 14-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 88821714 RSA 2010
Assessee PAN AABCB4040R
Bench Chennai
Appeal Number ITA 888/CHNY/2010
Duration Of Justice 7 year(s) 5 month(s) 10 day(s)
Appellant ACIT, CHENNAI
Respondent M/s. Bhavani Distilleries and Chemicals Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2017
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 14-11-2017
Last Hearing Date 21-08-2017
First Hearing Date 21-08-2017
Assessment Year 2007-2008
Appeal Filed On 04-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C B ENCH CHENNAI . ! ' . #$ % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY JUDICIAL MEMBER ./ I.T.A.NOS.888/MDS/2010 ( / ASSESSMENT YEAR: 2007-08) THE ACIT CIRCLE I(2) CHENNAI. VS M/S. BHAVANI DISTILLERIES AND CHEMICALS LIMITED OLD NO.16/NEW NO.4 I CROSS STREET R.A. PURAM CHENNAI 600 028. PAN: AABCB4040R ( /APPELLANT) ( /RESPONDENT) ./ I.T.A.NO.68/MDS/2012 ( / ASSESSMENT YEAR: 2008-09) THE ACIT COMPANY CIRCLE I(3) CHENNAI. VS M/S. BHAVANI DISTILLERIES AND CHEMICALS LIMITED NO.6 6 TH CROSS STREET NUNGAMBAKKAM CHENNAI 34. PAN: AABCB4040R ( /APPELLANT) ( /RESPONDENT) ./ I.T.A.NOS.1584/MDS/2014 ( / ASSESSMENT YEAR: 2009-10) THE ACIT CIRCLE I(2) CHENNAI. VS M/S. BHAVANI DISTILLERIES AND CHEMICALS LIMITED NO.6 6 TH CROSS STREET MYLAPORE CHENNAI 4. PAN: AABCB4040R ( /APPELLANT) ( /RESPONDENT) ./ I.T.A.NO.1571/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) THE JCIT (OSD) CORPORATE CIRCLE I(2) CHENNAI. VS M/S. BHAVANI DISTILLERIES AND CHEMICALS LIMITED NO.4 1 ST CROSS STREET R.A. PURAM CHENNAI 28. PAN: AABCB4040R ( /APPELLANT) ( /RESPONDENT) 2 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 ./ I.T.A.NO.3055/MDS/2016 ( / ASSESSMENT YEAR: 2012-13) THE ACIT CORPORATE CIRCLE 1(2) CHENNAI. VS M/S. BHAVANI DISTILLERIES AND CHEMICALS LIMITED NO.4 OLD NO.16 1 ST CROSS STREET R.A. PURAM CHENNAI 28. PAN: AABCB4040R ( /APPELLANT) ( /RESPONDENT) ./ I.T.A.NO.814/MDS/2010 ( / ASSESSMENT YEAR: 2007-08) M/S. BHAVANI DISTILLERIES AND CHEMICALS LIMITED NO.4 OLD NO.16 1 ST CROSS STREET R.A. PURAM CHENNAI 28. VS THE ACIT CIRCLE I(2) CHENNAI. PAN: AABCB4040R ( /APPELLANT) ( /RESPONDENT) /REVENUE BY : SHRI M.N. MAURYA CIT /ASSESSEE BY : SHRI B. RAMAKRISHNAN FCA !' /DATE OF HEARING : 22.08.2017 #$!' /DATE OF PRONOUNCEMENT : 14.11.2017 / O R D E R PER A. MOHAN ALANKAMONY AM:- THE REVENUE HAS FILED THE FOLLOWING FIVE APPEALS AG AINST THE RESPECTIVE ORDERS OF THE LD.CIT(A) AS DETAILED HERE IN BELOW:- 3 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 ITA APPEAL NO. ASSESSMENT YEAR CIT(A) ORDER DETAILS ORDER PASSED BY ORDER NO. DATE PASSED UNDER SECTION 888/MDS/2010 2007-08 CIT(A)-III CHENNAI 667/09-10/A-III 31.03.2010 250 (6) R.W.S. 143(3)OF THE ACT 68/MDS/2012 2008-09 CIT(A)-III CHENNAI 406/10-11/A-III 21.10.2011 250 (6) R.W.S. 143(3)OF THE ACT 1584/MDS/2014 2009-10 CIT(A)-I CHENNAI 512/11-12/A-1 25.02.2014 250 (6) R.W.S. 143(3)OF THE ACT 1571/MDS/2016 2011-12 CIT(A)-I CHENNAI 49/CIT(A)-1/2013-14 18.01.2016 250 (6) R.W.S. 143(3)OF THE ACT 3055/MDS/2016 2012-13 CIT(A)-I CHENNAI 6/CIT(A)-1/2015-16 22.08.2016 250 (6) R.W.S. 143(3)OF THE ACT 2. THE ASSESSEE HAS ALSO RAISED AN APPEAL ITA NO.81 4 OF 2010 AGAINST THE ORDER PASSED BY LD. COMMISSIONER O F INCOME TAX (APPEALS)-III CHENNAI IN ITA NO.667/09-10/A-II I DATED 31.03.2010 FOR THE ASSESSMENT YEAR 2007-08. 3. SINCE THE ISSUES AND GROUNDS IN ALL THE APPEALS OF THE REVENUE / ASSESSEE ARE IDENTICAL/SIMILAR/COMMON TH EY ARE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDE R FOR THE SAKE OF CONVENIENCE. 4. REVENUES APPEAL: 4.1 THE CONCISE GROUNDS RAISED BY THE REVENUE AS WE LL AS THE ASSESSEE ARE STATED HEREIN BELOW FOR ADJUDICATION:- 4 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 A) ITA NO.888 OF 2010 ASSESSMENT YEAR 2007-08:- THE REVENUE HAS RAISED FIVE GROUNDS IN ITS APPEAL HOWEVER THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- (I) THE LD.CIT(A) HAS ERRED IN TREATING THE SUM OF RS.94 60 500/- OUT OF RS.18 92 10 000/- RECEIVED BY THE ASSESSEE TOWARDS RELINQUISHMENT OF FARMING RIGHTS A S THE AGRICULTURAL INCOME OF THE ASSESSEE AS AGAINST INC OME FROM OTHER SOURCE HELD BY THE LD.AO AND THE REMAIN ING AMOUNT OF RS.17 97 49 500/- AS SHORT-TERM CAPITAL GAIN AS AGAINST INCOME FROM BUSINESS HELD BY THE LD.AO . (II) THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.3 51 945/- MADE BY THE LD.AO UNDER THE HEAD INC OME FROM OTHER SOURCE BEING THE EXPENDITURE INCURRED F OR AGRICULTURAL OPERATIONS. (III) THE LD.CIT(A) HAS ERRED IN DELETING THE DISA LLOWANCE MADE U/S.40(A)(IA) OF THE ACT ON AMORTIZATION OF PR EMIUM ON CONVERTIBLE DEBENTURES AMOUNTING TO RS.16 11 25 000/-. 5 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 B) ITA NO.68 OF 2012 ASSESSMENT YEAR 2008-09:- THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANC E MADE U/S.40(A)(IA) OF THE ACT ON AMORTIZATION OF PREMIUM ON CONVERTIBLE DEBENTURES AMOUNTING TO RS.17 81 66 667/-. C) ITA NO.1584 OF 2014 ASSESSMENT YEAR 2009-10:- THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANC E MADE U/S.40(A)(IA) OF THE ACT ON AMORTIZATION OF PREMIUM ON CONVERTIBLE DEBENTURES AMOUNTING TO RS.17 81 64 888/-. D) ITA NO.1571 OF 2016 ASSESSMENT YEAR 2011-12:- (I) THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLO WANCE MADE U/S.40(A)(IA) OF THE ACT ON AMORTIZATION OF PREMIUM ON CONVERTIBLE DEBENTURES AMOUNTING TO RS.17 81 64 885/-. (II) THE LD.CIT(A) HAS ERRED IN DELETING THE DISALL OWANCE MADE U/S.14A OF THE ACT BY THE LD.AO AMOUNTING TO RS.57 99 790/- 6 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 E) ITA NO.3055 OF 2016 ASSESSMENT YEAR 2012-13:- THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANC E MADE U/S.40(A)(IA) OF THE ACT ON AMORTIZATION OF PREMIUM ON CONVERTIBLE DEBENTURES AMOUNTING TO RS.17 89 39 134/-. 4.2 ASSESSEES APPEAL :- ITA NO.814 OF 2010 ASSESSMENT YEAR 2007-08:- THE LD.CIT(A) HAS ERRED IN TREATING 5% OF RS.18 92 10 000/- BEING THE NET COMPENSATION RECEIV ED BY THE ASSESSEE TOWARDS RELINQUISHMENT OF FARMING RIGHTS A MOUNTING TO RS.94 60 500/- AS THE AGRICULTURAL INCOME EXEMPT U/ S.10(I) OF THE ACT AND THE BALANCE AMOUNT OF RS.17 97 49 500/- AS NON- AGRICULTURAL INCOME. 5 REVENUES APPEAL ITA NO.888/MDS/2010 AY : 20 07-08:- 5.1 GROUND NO.4.1 A(I) : ASSESSMENT OF INCOME RECEIVED TOWARDS RELINQUISHMENT OF FARMING RIGHTS AMOUNTING TO RS.18 92 10 000/- UNDER THE HEAD AGRICULTURAL INCO ME / INCOME FROM OTHER SOURCE / SHORT-TERM CAPITAL GAIN / I NCOME FROM BUSINESS:- 7 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C LAIMS TO HAVE ENTERED IN TO JOINT VENTURE FARMING AGREEMENT (JVFA) DATED 09.07.2004 WITH SEVERAL PERSONS INVOLVING 70 ACRES OF LAND SITUATED AT THAIYUR AND THAZHAMPUR VILLAGE CHENGAL PET TALUK KANCHEEPURAM DISTRICT. SUBSEQUENTLY M/S. CARMEN BUI LDERS & CONSTRUCTIONS PVT. LTD. PURCHASED ABOUT 42.41 ACRE S OF LAND COMPRISING OF THE AFORESAID LAND OF 70 ACRES FOR A TOTAL SALE CONSIDERATION OF 147.56 CRORES. OUT OF THE SALE PR OCEEDS A SUM OF RS.47 30 25 000/- WAS PAID TO THE ASSESSEE AS COMPE NSATION FOR RELINQUISHMENT OF FARMING RIGHTS AGAINST WHICH THE ASSESSEE CEDED 60% OF THE SAME TO THE OWNERS OF THE LAND AND RETAINED THE BALANCE AMOUNT OF RS.18 92 10 000/-. THE LD.AO OPI NED THAT THE JVFA ENTERED BY THE ASSESSEE IS NOT GENUINE AND THE REFORE TREATED THE NET COMPENSATION RECEIVED BY THE APPELL ANT AS REVENUE RECEIPTS TAXABLE UNDER THE HEAD INCOME FRO M OTHER SOURCE. 5.2 BEFORE THE LD.CIT(A) THE LD.AR HAD MADE THE FOL LOWING SUBMISSIONS:- 8 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 1. THE ASSESSEE HAD STARTED ENTERING INTO JVF AGREEMENTS AS EARLY AS FROM JUNE 2004 I.E. BEFOR E 2 YEARS FROM THE ULTIMATE SALE OF LAND BY THE OWNERS OF THE LAND. 2. THE JVF AGREEMENTS WERE MADE WITH DIFFERENT OWNE RS OF THE LAND WHO WERE NOT INTER-RELATED. 3. THEREAFTER THE ASSESSEE WAS ENGAGED IN AGRICULTU RAL OPERATION TILL THE DATE OF SALE OF THE LAND. 4. THE ASSESSEE HAD DECIDED TO ENTER INTO AGRICULTU RE OPERATION DUE TO THE HIGH POTENTIAL OF JETROPA CULT IVATION AFTER EXTENSIVE RESEARCH. 5. THE LAND FORMING PART OF JVF AGREEMENTS WERE ALL AGRICULTURE LAND FALLING OUTSIDE THE SCOPE OF CAPI TAL ASSET AS PER PROVISIONS OF SECTION 2(14) OF THE AC T. 6. THE LAND OWNERS WERE UNDER THE BONAFIDE BELIEF T HAT CORPORATE FARMING WILL ENHANCE THE VALUE OF THEIR L AND AND ALSO PROTECT THEIR LAND FROM ENCROACHMENT. 7. THE ENTIRE TRANSACTION WAS MADE AFTER EXTENSIVE NEGOTIATIONS WHICH ARE EVIDENCED BY LETTERS. 9 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 8. DOCUMENTARY EVIDENCE SUCH AS REVENUE RECORDS ALS O ESTABLISH THE FACT THAT AGRICULTURAL OPERATIONS WER E CARRIED OUT IN THE LAND COVERED UNDER JVF AGREEMENT WHICH IS ALSO EVIDENCED BY THE SWORN STATEMENT OF V AO AND THE LAND OWNERS BEFORE THE LD.AO STATING THAT JETROPA CULTIVATION EXISTED TILL THE DATE OF THE SA LE OF THE LAND. 9. ALL THE PARTIES TO THE TRANSACTION HAD ACKNOWLED GED ABOUT THE BONAFIDE OF THE TRANSACTION. 10. THERE WAS NO NECESSITY FOR THE ASSESSEE TO DO A NY TAX PLANNING BECAUSE THE ASSESSEE WAS HAVING SUFFICIENT BROUGHT FORWARD LOSSES AND DEPRECIATION. 11. THEREFORE THE TERMINATION OF THE JVF AGREEMENT DID NOT CONSTITUTE IN ANY SYSTEMATIC OR ORGANIZED BUSINESS ACTIVITY. 12. HENCE THE AMOUNT RECEIVED ON THE RELINQUISHMENT OF THE FARMING RIGHTS HELD BY THE ASSESSEE ON AGRICULTURA L LAND WHICH IS NOT A CAPITAL ASSET AS PER PROVISIONS OF SECTION 2(14) OF THE ACT IS AKIN TO COMPENSATION RECEIVED TOWARDS TERMINATION OF TENANCY RIGHTS WITH RESPECT TO 10 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 AGRICULTURAL LAND AND THEREFORE SUCH RECEIPTS HAS T O BE TREATED AS AGRICULTURAL INCOME. 13. THE ASSESSEE HAD NOT ENGAGED ITSELF IN ANY OTHE R TRANSACTION OF SIMILAR NATURE. THEREFORE THE LONE TRANSACTION OF THE ASSESSEE CANNOT BE TREATED AS TH E BUSINESS ACTIVITY OF THE ASSESSEE. 14. INCOME RECEIVED IN LIEU OF RENT OR REVENUE FROM AGRICULTURAL LAND OR ANY TRANSACTION INSEPARABLY CONNECTED THEREWITH WILL BE ENTITLED FOR THE BENEF IT OF TAX EXEMPTION AS AGRICULTURAL INCOME. RELIANCE WAS PLACED IN THE CASE CIT VS. GOWRI SHANKAR AGARWAL REPORTED IN 131 ITR 28. 15. THERE WAS NO PRIVITY OF CONTRACT BETWEEN THE AP PELLANT AND M/S. CARMEN BUILDERS & CONSTRUCTIONS PVT. LTD. OTHER THAN THE JVF AGREEMENT AS CONFIRMING PARTY. 16. THE BONAFIDE OF JVF AGREEMENT WAS ALSO ACKNOWLE DGED BY THE ULTIMATE BUYERS OF THE LAND M/S. CARMEN BUIL DERS & CONSTRUCTIONS PVT. LTD. THE LAND OWNERS HAD ALSO VOLUNTARILY ENTERED INTO THE JVF AGREEMENTS. 11 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 17. PROPERTY IS A BUNDLE OF RIGHTS. INTEREST IN LA ND CAN BE SPLITTED BY DIFFERENT PERSONS NOT MERELY IN THE CAS E OF CO-OWNERSHIP BUT ALSO BETWEEN THOSE HAVING INTEREST IN POSSESSION FOR LIFE OR SPECIFIED PERIOD AND THOSE IN REMINDER KNOWN AS REVERSIONARY RIGHT. THE COMPENSATION RECEIVED FOR CEDING FARMING RIGHTS ON AGRICULTURAL LAND WHICH IS NOT A CAPITAL ASSET AS SPECIFIED IN SECTION 2(14)(III) OF THE ACT SHOULD B E TREATED AS CAPITAL GAIN WHICH IS EXEMPT FROM INCO ME TAX IN THE HANDS OF BOTH THE LANDLORD AND TENANT. 5.3 THE LD.CIT(A) AFTER EXAMINING THE ISSUE IN DETA IL HELD THAT 5% OF THE COMPENSATION RECEIVED SHOULD BE TREATED A S AGRICULTURAL INCOME BECAUSE THERE IS AN ELEMENT OF INCOME IN THE NATURE OF AGRICULTURAL INCOME EMBEDDED IN THE COMPENSATION. HE FURTHER HELD THAT THE BALANCE 95% SHOULD BE TREATED AS SHO RT-TERM CAPITAL GAIN WHICH IS TAXABLE. THE RELEVANT PORTION OF THE ORDER OF THE LD.CIT(A) IS EXTRACTED HEREIN FOR REFERENCE:- 4.7 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND MATERIAL ON RECORD. THOUGH THE INTENTION OF THE BUY ER IS 12 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 DIFFERENT THE ASSESSEE WAS ABLE TO PROVE THAT THE AGRICULTURAL OPERATIONS WERE CARRIED ON BY IT ON THE LAND IN THE PAST. SINCE AGRICULTURAL YIELD IN JETROPA TAKES A LONGER TIME SUCH INCOME FROM AGRICULTURAL OPERATIONS ON THE SAID 40 ACRES O F LAND WERE NOT REALISED IN FINANCIAL YEARS 2004-05 2005-06 AN D DURING THE YEAR UNDER CONSIDERATION. HOWEVER VOUCHERS IN PROOF OF EXPENSES PROVIDE EVIDENCE THAT AGRICULTURAL OPERATI ONS WERE CARRIED ON IN THIS LAND IN THE PAST BEFORE ITS SALE TO CBCPL. THE ISSUE THEREFORE IS LIMITED AS TO WHETHER THE COMPENSATION OF RS.18 92 10 000/- COULD BE TREATED AS INCOME FRO M AGRICULTURAL OPERATIONS. THE COMPENSATION OF RS.18 92 10 000/ RECEIVED BY THE ASSESSEE IS A HUG E SUM AND SUCH A PRICE IS DISPROPORTIONATELY HIGH FOR ANY AGR ICULTURAL OPERATIONS ON MERE 40 ACRES OF LAND IN WHICH THE AP PELLANT WAS A JOINT VENTURE PARTNER. THE PRICE IS SO HIGH T HAT IT WOULD NOT BE VIABLE IF THE LAND IS PUT TO AGRICULTURAL U SE BY THE PURCHASER WHILE IT IS MORE CONSISTENT WITH THE PRI CE FETCHED FOR URBAN PLOTS THAN AGRICULTURAL LAND. THOUGH AGRICULT URAL OPERATIONS WERE CARRIED ON THE GUIDING FACTOR TO D ECIDE THE NATURE OF SUCH COMPENSATION SHOULD THE IMMEDIATE NE XUS THE COMPENSATION IS HAVING WITH THE LAND. IN OTHER WORD S IF THE CONNECTION IS ONLY A REMOTE SOURCE THEN THE COMPENS ATION CANNOT TAKE THE COLOUR OF AGRICULTURAL INCOME IN TO TO. SINCE THE VALUE OF COMPENSATION IS ABSURDLY HIGH MAKING IT N OT SUITABLE FOR AGRICULTURAL OPERATIONS IT IS ABSOLUTELY CLEAR THAT A SUBSTANTIAL PORTION OF COMPENSATION RECEIVED IS NON - AGRICULTURAL IN NATURE. THIS PORTION IS NOT DIRECTL Y LINKED TO THE ANY AGRICULTURAL OPERATIONS AND ITS IMMEDIATE SOURC E TO THE LAND SOLD IS ONLY A REMOTE SOURCE. 4.7.1 THE ID. AR PRODUCED EVIDENCES TO PROVE THAT T HE LANDS IN QUESTION ARE AGRICULTURAL IN NATURE. THE LAND IS AL SO SITUATED BEYOND THE SPECIFIED DISTANCE FROM THE OUTER LIMITS OF THE CITY. HENCE THE ASSETS CANNOT BE TREATED AS A CAPITAL AS SET U/S 2(14) OF THE INCOME-TAX ACT. THE ID. AR ALSO EXPLAINED TH AT THE 13 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 VILLAGES IN WHICH THE LANDS SOLD ARE SITUATED ARE N OT PART OF THE URBAN AGGLOMERATION OF THE CHENNAI METROPOLIS. THOU GH THE CONTENTION THE ID. AR IS ACCEPTABLE SINCE THE APPE LLANT IS NOT THE OWNER OF THE LAND IT CANNOT BE GRANTED THE BEN EFIT ON THESE GROUNDS ALONE. IT MAY ALTOGETHER BE A DIFFERENT MAT TER AS REGARDS THE COMPENSATION RECEIVED BY THE LAND OWNER S. THE COMPENSATION RECEIVED AS DESCRIBED IN THE EARLIER P ART OF THE ORDER THUS HAVE A REMOTE LINK TO THE SOURCE OF INCO ME AND THEREFORE IRRESPECTIVE OF THE CHARACTER OF THE LAND AND ITS LOCATION THE SAME CANNOT BE TREATED ENTIRELY AS INC OME FROM AGRICULTURE. 4.7.2 THE APPELLANT HAS ENTERED INTO JVFAS IN THE Y EAR 2004 FOR A PERIOD OF TEN YEARS AND IN THE THIRD YEAR THE RIGHTS TO FARMING WERE RELINQUISHED. THE APPELLANT HAD INCURR ED EXPENDITURE IN PLANTING PRUNING AND CULTIVATING JE TROPA. THE VAO HAS ALSO CERTIFIED THE PLANTING AND NURSING OF JETROPA PLANTS ON THE LANDS UNDER CONSIDERATION. THE FUTURE YIELD FROM THESE LANDS HAD GOT TERMINATED CONSEQUENT OF SALE O F LAND AND THEREFORE THE INCOME FROM AGRICULTURAL OPERATION IN THE REMAINING SEVEN YEARS WERE FOREGONE BY THE APPELLAN T. THEREFORE THE COMPENSATION RECEIVED ON TERMINATION OF FARMING RIGHTS CONSTITUTES A PORTION OF COMPENSATIO N RELATING TO LOSS OF AGRICULTURAL INCOME TO BE DERIVED IN FUT URE. THE ID. AR HAD SUBMITTED A CALCULATION OF PROJECTED INCOME LIKELY TO BE EARNED IN JETROPA CULTIVATION. ACCORDING TO IT THE INITIAL TWO YEARS ARE GESTATION PERIODS AND THE CROP START GENE RATING INCOME FROM THIRD YEAR ONWARDS. RECORDS PRODUCED BY THE APPELLANT REVEAL THAT JETROPA CULTIVATION HAS BEEN CARRIED OUT IN 42 ACRES OF LANDS AND SUBSTANTIAL AMOUNTS HAVE B EEN SPENT IN FINANCIAL YEARS 2004:05 200506 AND ALSO IN THE CURRENT YEAR. PROOF OF PURCHASE OF SEEDS OF JETROPA IN FY 0 6-07 HAS ALSO BEEN PRODUCED. JETROPA IS A MORE VIABLE COMMER CIAL CROP AND THE ASSESSEE IS BOUND TO GET FAIRLY HIGH REVENU E IN THE REMAINING YEARS. DUE TO SURRENDER OF LAND ON TRANSF ER AND 14 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 RELINQUISHMENT OF THE FARMING RIGHTS THE APPELLANT HAS LOST FURTHER REVENUE GAINS THOUGH SIGNIFICANT AMOUNTS HA VE BEEN SPENT INITIALLY ON ITS CULTIVATION. HOWEVER THE CLA IM OF 100 PER CENT OF THE COMPENSATION ON EXTINGUISHMENT OF FARMI NG RIGHT ALONE SOUNDS UNREASONABLE AND LACKS PROPER BASIS FO R THE REASONS STATED IN PARA 4.7 AND 4.7.1. NONETHELESS TAKING INTO ACCOUNT THE COMPARATIVELY HIGH REVENUE YIELD DERIVA BLE FROM THE COMMERCIAL CROP CULTIVATION OF JETROPA AN.D THE TERMINATION OF FARMING AGREEMENT WITHIN 3 YEARS WH ILE 7 YEARS OF FARMING RIGHTS ARE STILL LEFT 5 PER CENT OR RS. 94 60 500/- OF THE COMPENSATION RECEIVED MAY REASON ABLY BE ATTRIBUTED TO APPELLANT'S SHARE OF LOSS OF FARMING INCOME. THE BALANCE 95 PER CENT OR RS. 17 97 49 500/- IS TREATE D AS NON- AGRICULTURAL INCOME. ONLY THIS AMOUNT OF 5 PER CENT I.E. RS. 94 60 500/- OF THE COMPENSATION HAS DIRECT NEXUS TO THE IMMEDIATE SOURCE BY AGRICULTURAL LAND AND HENCE THE COMPENSATION TO THAT EXTENT IS TREATED AS AGRICULTU RE INCOME AND EXEMPT U/S 10(1) OF THE INCOME-TAX ACT 1961. 4.7.3 THE APPELLANT CLASSIFIED THE ENTIRE SUM OF RS.18 92 10 000/- AS COMPENSATION ON EXTINGUISHMENT OF THE FARMING RIGHTS FOR THE SUCCEEDING YEARS. THIS COMPE NSATION RECEIVED HAS BEEN HELD BY THE AO AS BUSINESS INCOME U/S 28(II). IN MY CONSIDERED VIEW THIS COMPENSATION DO ES NOT FALL IN ANY OF THE FOUR CLAUSES OF 28(II). THIS TRANSACT ION SQUARELY FALLS INTO THE AMBIT OF SECTION 55(2) (A) AND COMPE NSATION RECEIVED ON TERMINATION OF RIGHTS HAS TO BE TREATED AS INCOME FROM CAPITAL GAINS ONLY. SINCE THE TENURE OF HOLDIN G OF THE CAPITAL ASSET IN THE FORM OF FARMING RIGHTS IS LESS THAN 3 YEARS THE PROFITS ARRIVED AT RS.17 97 49 500/- IS TO BE T REATED AS SHORT-TERM CAPITAL GAINS AND NOT AS BUSINESS PROFIT S U/S 28(II). FURTHER GOING BY THE VIABLITY FACTOR FOR CONTINUED AGRICULTURAL OPERATION DISCUSSED ABOVE AND THE HELP EXTENDED BY THE APPELLANT TO THE BUYER IN ACQUIRING THE LAND AND FA CILITATING THE DEAL THE MAJOR PORTION OF 95 PERCENT OF COMPEN SATION 15 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 RECEIVED CANNOT BE TREATED AS CAPITAL GAINS RECEIVE D ON TRANSFER OF A EXCLUDED CAPITAL ASSET WHICH IS EXEM PT FROM TAX. SINCE ITS IMMEDIATE SOURCE IS REAL ESTATE THE SAME IS A TAXABLE AS SHORT-TERM CAPITAL GAINS (STCG) AND IT IS NOT EX EMPT FROM TAX. IN THE RESULT OUT OF THE TOTAL COMPENSATION A MOUNT OF RS.18 92 10 000/- A SUM OF RS.94 60 500/- IS HELD AS AGRICULTURAL INCOME AND THE REMAINING RS.17 97 49 5 00/- IS HELD AS SHORT-TERM CAPITAL GAIN. THE APPELLANT PAR TLY SUCCESS ON THIS GROUND. 5.4 THE LD.DR VEHEMENTLY ARGUED BEFORE US IN SUPPOR T OF THE ORDER OF THE LD.AO BY REITERATING THE DISCUSSIONS M ADE THEREIN AND PLEADED THAT HER ORDER MAY BE RESTORED. ON THE OTHER HAND THE LD.AR REITERATING THE SUBMISSION MADE BEFORE TH E LD.CIT(A) PRAYED THAT THE ENTIRE AMOUNT OF COMPENSATION MAY B E TREATED AS AGRICULTURAL INCOME WHICH IS EXEMPT FROM TAX. 5.5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE IT CANNOT BE SIMPLY CONCEIVED THAT THE JVF AGREEMENT I S NOT BONAFIDE. THESE AGREEMENTS ARE ENTERED BETWEEN VAR IOUS PARTIES AND ACTED UPON OVER FEW YEARS. FURTHER IT IS NOT U NCOMMON FOR A PERSON TO ENTER INTO AGREEMENT RELATED TO FARMING R IGHTS. THE ONLY REASON TO VIEW THE TRANSACTION AS A COLOURABLE DEVI CE IS DUE TO THE 16 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 PROJECTION OF HIGH POTENTIAL INCOME ARISING OUT OF JETROPA CULTIVATION. BOTH THE PARTIES BEFORE US HAVE NOT BR OUGHT OUT SUFFICIENT MATERIALS TO PROVE OR DISPROVE THE HUGE PROFIT ARISING OUT OF JETROPA CULTIVATION. THE LD.CIT(A) ALSO REALIZI NG THE GRAVITY OF SITUATION HAS HELD THAT THE COMPENSATION RECEIVED BY THE ASSESSEE CANNOT TAKE THE COLOUR OF AGRICULTURE INCO ME IN ITS ENTITY. FURTHER ON PERUSING THE NATURE OF JVF AGREEMENT BET WEEN THE ASSESSEE COMPANY AND VARIOUS OTHER PARTIES IT IS E VIDENT THAT THE AGREEMENT IS A COMMERCIAL TRANSACTION THOUGH IT PE RTAINS TO FARMING RIGHTS ON AGRICULTURE LAND BECAUSE THE ASSE SSEE COMPANY APART FROM ITS FARMING ACTIVITIES ALSO HAVE TO CARR Y OUT VARIOUS OTHER OPERATIONS SUBSEQUENT TO HARVESTING THE AGRIC ULTURAL PRODUCE. FURTHER ON PERUSING THE SECTION 2(1A)(A) (B) & (C) OF THE ACT WE FIND THAT THE COMPENSATION RECEIVED BY THE ASSESSEE FOR CANCELLATION OF THE COMMERCIAL AGREEMENT DOES NOT F ALL UNDER THE PURVIEW OF AGRICULTURAL INCOME. FURTHER TAKING CU E FROM SECTION 32(1)(II) OF THE ACT THE RIGHT OF FARMING ON THE A GRICULTURAL LAND POSSESSED BY THE ASSESSEE DUE TO THE COMMERCIAL AGR EEMENT ENTERED INTO BETWEEN VARIOUS PARTIES CAN BE CONSTRU ED AS AN INTANGIBLE ASSET. THEREFORE THE VIEW OF THE LD.C IT(A) THAT THE 17 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 COMPENSATION RECEIVED BY THE ASSESSEE SHOULD BE TAX ED UNDER THE HEAD SHORT-TERM CAPITAL GAINS HAS MERITS. FU RTHER WE FAIL TO UNDERSTAND THE REASON AS TO HOW ANY ELEMENT OF AGRI CULTURAL INCOME IS EMBEDDED IN THE COMPENSATION RECEIVED BY THE ASSESSEE OTHER THAN THE VALUE OF EXISTING STANDING CROPS ON THE AGRICULTURAL LAND AT THE TIME OF THE CANCELLATION O F THE JVF AGREEMENT. THEREFORE WE HEREBY REMIT THE MATTER BA CK TO THE FILE OF LD.AO WITH A DIRECTION TO GIVE RELIEF TO THE ASS ESSEE WITH RESPECT TO THE ESTIMATED VALUE OF THE STANDING CROP THAT EXISTED ON THE AGRICULTURAL LAND AT THE TIME OF CANCELLATION O F THE JVF AGREEMENT AND TREAT THE SAME AS AGRICULTURAL INCOM E AND BRING THE BALANCE AMOUNT OF THE COMPENSATION RECEIVED TO TAX UNDER THE HEAD SHORT-TERM CAPITAL GAIN AS HELD BY THE LD.CI T(A). IT IS ORDERED ACCORDINGLY. THUS GROUND NO.4.1 A(I) IS DI SPOSED OFF. 6 GROUND NO.4.1 A(II) : TREATING THE AMOUNT OF EXPEND ITURE OF RS.3 51 945/- INCURRED TOWARDS FARMING AS THE INCOM E OF THE ASSESSEE :- SINCE IN THE GROUND NO.4.1 A(I) WE HAVE HELD THAT RELIEF SHOULD BE GRANTED TO THE ASSESSEE WITH RESPECT TO T HE VALUE OF THE STANDING CROPS WHICH EXISTED AT THE TIME OF CANCELL ATION OF THE JVF 18 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 AGREEMENT THE PRAYER OF THE REVENUE FOR TREATING T HE EXPENDITURE OF RS.3 51 945/- INCURRED BY THE ASSESSEE TOWARDS F ARMING ACTIVITIES AS THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCE DOES NOT HAVE ANY MERITS. THERE FORE THIS GROUND RAISED BY THE REVENUE IS HEREBY DECIDED AGAI NST THE REVENUE. 7 GROUND NO.4.1 A(III) : DELETING THE DISALLOWANCE MA DE U/S.40(A)(IA) OF THE ACT ON AMORTIZATION OF PREMIUM ON CONVERTIBLE DEBENTURES AMOUNTING TO RS.16 11 25 000/-:- THE ASSESSEE HAD ISSUED DEBENTURES AT FACE VALUE OF RS.1000/- AMOUNTING TO RS.64 45 00 000/-. THE REDEE MABLE VALUE PER DEBENTURE ON THE 12 TH YEAR WAS RS.5000/-. THEREFORE THE ASSESSEE CLAIMED DEDUCTION OF RS.16 11 25 000/- DUR ING THE RELEVANT ASSESSMENT YEAR BASED ON THE FOLLOWING WOR KING BEING THE PRORATA PREMIUM FOR ONE YEAR:- REDEMPTION VALUE PER DEBENTURE: 5000 VALUE OF ONE DEBENTURE : 1000 TOTAL PREMIUM : 4000 PERIOD OF DEBENTURE : 12 YEARS PRORATA PREMIUM PER YEAR : 4000/12 = 250 PRORATA PREMIUM FOR ONE YEAR : 250*64 45 00 000 / 1000 = 16 11 25 000 19 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 7.1 THE LD.AO OPINED THAT SINCE THE ASSESSEE HAD NO T DEDUCTED TAX AT SOURCE ON THE EXPENSE CLAIMED FOR RS.16 11 25 000/- PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WILL BE APPLICABLE AND THEREFORE DISALLOWED THE ENTIRE EXPE NDITURE CLAIMED BY THE ASSESSEE. ON APPEAL THE LD.CIT(A) RELYING ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE CIT VS FIRST LEASING COMPANY OF INDIA LTD REPORTED IN 2 92 ITR 110 THE DECISION OF THE HONBLE APEX COURT IN THE CASE MADRAS INDUSTRIAL CORPORATION LTD. VS. CIT REPORTED IN 22 5 ITR 802 THE DECISION IN THE CASE NATIONAL ENGINEERING INDUSTRIE S LTD VS. CIT REPORTED IN 236 ITR 557 HELD THAT THERE IS NO DISTI NCTION BETWEEN THE DISCOUNT ON DEBENTURES AND PREMIUM ON DEBENTURE S AND FURTHER RELYING ON THE CIRCULAR ISSUED BY THE CBDT HELD THAT THE TAX IS REQUIRED TO BE DEDUCTED ONLY AT THE TIME OF REDE MPTION OF DEBENTURES AND ACCORDINGLY DIRECTED THE LD.AO TO DE LETE THE ADDITION BY OBSERVING AS UNDER:- 6.3 NOW THE SECOND ISSUE IS WHETHER PROVISIONS OF SEC. 40(A)(IA) IS APPLICABLE AND WHETHER ANY TAX WAS REQ UIRED TO BE DEDUCTED AT SOURCE AT THE TIME OF CREDIT OF PRO-RAT A PREMIUM IN THE NAME OF DEBENTURE HOLDER. THE APPELLANT HAS REL IED ON CBDT CIRCULAR NOS. 2/2002 AND 4/2004 AND ITS LETTER F.NO. 275/103/2003-IT(B) DATED 30-09-2004 ADDRESSED TO M/ S. 20 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 EMERALD TESTING (INDIA) PVT. LTD. (COIMBATORE) AND CBDT LETTER F.NO. 275/126/96 IT (B) DATED 0507-1996 ADD RESSED TO TATA IRON & STEEL CO. LTD. IN SUPPORT OF ITS CONTEN TION THAT NO TDS WAS NEEDED EACH YEAR IN THIS REGARD. THE CIRCUL AR NO. 4/2004 DATED 13-052004 ISSUED BY CBDT HAS CLARIFIE D THAT THE TAX IS REQUIRED TO BE DEDUCTED AT SOURCE U/S. 1 93 OR 195 ONLY AT THE TIME OF REDEMPTION OF SUCH BONDS AND NO T ON YEAR TO YEAR BASIS. THE SAME IS REPRODUCED HEREUNDER FOR EASY UNDERSTANDING: 'THE TAX-TREATMENT OF INCOME FROM DEEP DISCOUNT BONDS HAS BEEN EXPLAINED IN THE BOARD'S CIRCULAR NO.2 OF 2002 DA TED FEBRUARY 15 2002 (SEE [2002) 254 ITR (ST.) 241). SUBSEQUENTLY THE BOARD HAS RECEIVED VARIOUS REQUESTS F OR A CLARIFICATION REGARDING TAX DEDUCTION AT SOURCE U/S. 19 3 OF THE INCOME-TAX ACT FROM INTEREST ON DEEP DISCOUNT BONDS. DIFFICULTIES; COULD ALSO BE FACED BY THE TAXPAYERS I N VIEW OF SEC. 199 OF THE IT ACT. WHICH PROVIDES THAT CREDIT FO R TAX DEDUCTION AT SOURCE SHALL BE ALLOWED ONLY IN THE YEA R IN WHICH THE CORRESPONDING INCOME IS DECLARED. IT IS HEREBY CLARIFIED THAT TAX IS REQUIRED TO BE DEDUC TED AT SOURCE U/S. 193 OR 195 AS THE CASE MAY BE ONLY AT T HE TIME OF REDEMPTION OF SUCH BONDS IRRESPECTIVE OF WHETHER THE I NCOME FROM THE BONDS HAS BEEN DECLARED BY THE BOND-HOLDER O N ACCRUAL BASIS FROM YEAR TO YEAR OR IS DECLARED ONLY IN TH E YEAR OF REDEMPTION. IT HAS BEEN ARGUED BY THE APPELLANT THAT THE DEBENT URES ISSUED BY IT ARE FREELY TRANSFERABLE AND THE ULTIMATE PAYE E AT THE TIME OF REDEMPTION OF DEBENTURE IS NOT KNOWN. THE CBDT H AS CLARIFIED VIDE CIRCULAR NOS. 2 OF 2002 AND 4 OF 200 4 THAT IN THE CASE OF ZERO PERCENT DEBENTURES ISSUED AT A DISCOUN T THE TAX HAS TO BE DEDUCTED ONLY AT THE TIME OF REDEMPTION. THE BENEVOLENT CIRCULARS ARE BINDING ON THE DEPARTMENTA L OFFICERS. 21 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 THIS IS THE CONSISTENT VIEW OF VARIOUS COURTS OF TH E LAND. RELIANCE MAY BE PLACED IN THE CASE OF NAVNIT LAL C. JAVERI V. K.K. SEN [56 ITR 198 (SC)]. EVEN IF THE DIRECTIONS CONTAINED IN THE CIRCULAR ISSUED BY THE CBDT DEVIATE FROM THE PROVISIONS OF THE ACT THEY ARE BINDING ON THE ITO [ELLERMAN L INES LTD. V. CIT 82 ITR 913 (SC)] AND K.P. VARGHESE V. ITO 131 I TR 597(SC)]. IN VIEW OF THE ABOVE I AM OF THE CONSIDE RED OPINION THAT THE FACTS OF THE APPELLANT IS COVERED BY THE C IRCULARS AND COMMUNICATIONS ISSUED BY THE BOARD. FURTHER THE JURISDICTIONAL HIGH COURT HAS HELD THAT THERE IS NO DISTINCTION BETWEEN PREMIUM ON DEBENTURE AND DISCOUNT ON DEBENT URE AND THE EXPENDITURE INCURRED ARE REVENUE IN NATURE TO B E ALLOWED OVER THE PERIOD OF DEBENTURE. RESPECTFULLY FOLLOWIN G THE ABOVE DECISIONS AND THE CIRCULARS THE AO IS DIRECTED TO DELETE THE ADDITION MADE ON THIS ISSUE. THE APPELLANT SUCCEEDS ON THIS GROUND. 7.2 FROM THE FACTS OF THE CASE IT IS APPARENT THAT WHILE DECIDING THE CASE OF THE ASSESSEE THE LD.CIT(A) HAS FOLLOWED THE DECISION OF THE VARIOUS HIGHER JUDICIARY WHICH IS D IRECTLY APPLICABLE IN THE CASE OF THE ASSESSEE AND THE CIRCULAR NO.4/2 004 DATED 13.05.2004 OF THE CBDT WHEREIN IT IS CLARIFIED THAT TAX IS REQUIRED TO BE DEDUCTED AT SOURCE U/S. 193 OR 195 OF THE ACT ONLY AT THE TIME OF REDEMPTION OF SUCH BONDS AND NOT ON YEAR TO YEAR BASIS. MOREOVER IT IS NOT THE CASE OF THE REVENUE THAT TH E DEBENTURES ARE REDEEMED DURING THE RELEVANT ASSESSMENT YEARS. THE LD.DR COULD ALSO NOT CONTROVERT TO ANY OF THE FINDINGS MA DE BY THE 22 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 LD.CIT(A) ON THE ISSUE. IN THIS CIRCUMSTANCE WE D O NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD.CIT (A). ACCORDINGLY THIS GROUND FILED BY THE REVENUE DOES NOT HAVE ANY MERITS AND THEREFORE DECIDED AGAINST THE REVENUE. 8. REVENUES APPEAL : ITA NOS.68 OF 2012 1584 OF 2014 1571 & 3055 OF 2016:- GROUND NOS. 4.1 B C D(I) & E : DELETING THE DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT ON AMORTIZATION OF PREMIUM ON CONVERTIBLE DEBENTURES AMOUNTING TO RS.18 92 10 000/- RS.17 91 66 667/- 17 81 64 885/- & RS.17 89 39 134/- FOR THE ASSESSME NT YEARS 2007- 08 2008-09 2009-10 2011-12 & 2012-13 RESPECTIVEL Y:- SINCE WE HAVE ALREADY HELD THIS ISSUE IN FAVOUR O F THE ASSESSEE IN THE REVENUES APPEAL IN PARA NO.7.2 HER EIN ABOVE THE SAME DECISION WILL HOLD GOOD IN THE CASE OF THE OTHER APPEALS OF THE REVENUE FOR THE OTHER RELEVANT ASSESSMENT YE ARS. ACCORDINGLY THESE APPEALS OF THE REVENUE ARE DEVOID OF MERITS. 23 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 9. REVENUES APPEAL IN ITA NO.1571 OF 2016 AY 2011-12 : GROUND NO. 4.1 D (II) DELETING THE DISALLOWANCE MAD E U/S.14A OF THE ACT BY THE LD.AO AMOUNTING TO RS.57 99 790/ - FROM THE BALANCE SHEET OF THE ASSESSEE IT WAS RE VEALED THAT THE ASSESSEE HAS MADE INVESTMENT OF RS.2 91 04 590/- IN ASSETS THE INCOME FROM WHICH IS EXEMPT FROM TAX. THEREFORE THE LD.AO INVOKED THE PROVISIONS OF SECTION 14A R.W.R. 8D(II & III) OF THE RULES AND WORKED OUT THE DISALLOWANCE AT RS.57 99 790/-. ON APPEAL THE LD.CIT(A) DIRECTED THE LD.AO TO RECOMPUT E THE DISALLOWANCE U/S.14A R.W.R. 8D IN VIEW OF THE SUBMI SSION OF THE ASSESSEE THAT THE ENTIRE PREMIUM ON DEBENTURES OF RS.17 81 64 888/- WAS DISALLOWED AND THEREFORE FURT HER DISALLOWANCE WAS NOT WARRANTED. 9.1 ON PERUSING THE ISSUE AND THE ORDER OF BOTH THE LD.REVENUE AUTHORITIES WE FIND THAT THE COMPLETE F ACTS OF THE ISSUE HAVE NOT SURFACED. THEREFORE WE REMIT BACK T HE MATTER TO THE FILE OF LD.AO FOR DENOVA CONSIDERATION. 24 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 10 ASSESSEES APPEAL IN ITA NO.814 OF 2010 ASSESSM ENT YEAR 2007-08 :- GROUND NO. 4.2 : ASSESSMENT OF INCOME RECEIVED TOWA RDS RELINQUISHMENT OF FARMING RIGHTS AMOUNTING TO RS.18 92 10 000/- UNDER THE HEAD AGRICULTURAL INCOME / INCOME FROM OTHER SOURCE / SHORT-TERM CAPITAL GAIN / INCOME FROM BUSINESS: - IN THE REVENUES APPEAL IN ITA NO.888/MDS/2010 FOR THE ASSESSMENT YEAR 2007-08 AT PARA NO.5.1 HEREIN ABOVE WE HAVE REMITTED BACK THE MATTER TO THE FILE OF LD.AO WITH A DIRECTION TO GIVE RELIEF TO THE ASSESSEE WITH RESPECT TO THE EST IMATED VALUE OF THE STANDING CROP THAT EXISTED ON THE AGRICULTURAL LAND AT THE TIME OF CANCELLATION OF THE JVF AGREEMENT AND TREAT THE SAME AS AGRICULTURAL INCOME AND BRING THE BALANCE AMOUNT OF THE COMPENSATION RECEIVED BY THE ASSESSEE TO TAX UNDER THE HEAD SHORT-TERM CAPITAL GAIN AS HELD BY THE LD.CIT(A). SINCE THE ISSUE HAS BEEN ALREADY DECIDED BY US HEREIN ABOVE IN THE REVENUES APPEAL THE ASSESSEES APPEAL HAS BECOME INFRUCTUOU S WHICH IS ON THE VERY SAME ISSUE. 25 ITA NOS.814 & 888/MDS/2010 ITA NO.68/MDS/2012 1584/MDS/2014 ITA NOS. 1571 & 3055/MDS/2016 11. IN THE RESULT THE REVENUES APPEAL IN ITA NO.88 8 OF 2010 IS PARTLY ALLOWED ITA NOS. 68 OF 2012 1584 OF 2014 & 3055 OF 2016 IS DISMISSED AND ITA NO. 1571 OF 2016 IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. THE ASSESSEES APPEAL IN ITA 814 OF 2010 IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED ON THE 14 TH NOVEMBER 2017 AT CHENNAI. SD/- SD/- ( ! ' . #$ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) % & /JUDICIAL MEMBER & / ACCOUNTANT MEMBER '% /CHENNAI (& /DATED 14 TH NOVEMBER 2017 RSR & *+ + /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. / ( ) /CIT(A) 4. / /CIT 5. +01 2 /DR 6. 13 /GF