S. Manikumar, J.

1. Tax Case Appeal is directed against the order dated 20.11.2015 made in I.T.A. No. 1560/Mds/2015, for the assessment year 2011-2012, in the matter of M/s. Mansi Finance Chennai Ltd., Chennai, by which, the Tribunal has dismissed the appeal filed by the revenue.

2. Brief facts leading to the appeal are that the respondent, non-banking finance company, filed its return of income for the assessment year 2011-12 on 26.09.2011, admitting total income of Rs.25,91,180/-. The case was taken up for scrutiny and notice, under Section 143(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), was issued on 01.08.2012 and duly served on the assessee on 08.08.2012. Assessee's authorised representative appeared in person and produced a copy of the Memorandum of Articles of the Company, financials with reports, ledger accounts of parties, copies of purchase and sale deed of agricultural lands, donation receipt, Demat account, details of loans, copy of Village Administrative Officer Certificate, stating that the lands are fit for agricultural operations, copy of lease agreement, and other documents. The assessee Company has admitted income from financing business and income from other sources. They have also admitted agricultural income of Rs.8,03,730/-, in Schedule 11 - "other income" and also the profit on sale of agricultural land for Rs.3,79,99,376/-, shown in other in Schedule 11 of the profit and loss account. However, they claimed the same, in the statement of total income.

3. The assessing officer has called for information from the Tahsildar and the report of the Tahsildar was received on 12.03.2014. Reports of the Tahsildar, Sri Perumpudur Taluk, Village Administrative Officer, Thandalam and Revenue Inspector, Thandalam and copies of Revenue Records, were shown to the assessee's authorised representative. The assessee was asked to show cause, as to why, the profit on sale of agricultural land and agricultural income, should not be brought to tax, based on Tahsildar's report shown to them.

4. Responding to the notices issued, the assessee produced a copy of the Village Administrative Officer's Certificate, Thandalam, which states that the lands are fit for agricultural operations. The assessee also contended that they carried on agricultural operations and at the time of sale, the lands were used for agriculture and thus, claimed that the profit on sale of agricultural lands, has to be deducted.

5. After considering the material on record and reply of the assessee, the assessing officer, vide order, dated 25.03.2014, completed the assessment, as hereunder:

"(i) Treatment of profit on sale of agricultural land of Rs.3,56,73,957/- as long term capital gains arising out of sale of capital assets.

(b) The AR has also raised an additional ground vide letter dated 26.09.2014 (which was admitted as the omission of the said ground from the appeal form, was not willful or unreasonable), pleading that agricultural income of Rs.8,03,730/- returned by it, was treated as 'Income from Other Sources.

(c) Levy of interest u/s 234B."

6. Reasons for the above conclusion of the assessing officer, are as follows:

"(i) In the agreement for sale, the impugned lands were mentioned as "Land" and not "Agricultural Land".

(ii) As per the Memorandum of Association the main object and object ancillary/incidental to the attainment of main object was money lending and not dealing with agricultural land.

(iii) The appellant was registered as Non-Banking Finance Company with RBI for carrying out money business and not agricultural operations.

(iv) Appellant had not filed evidence for income and expenditure from the agricultural operations.

(v) Tahsildar approached by the Revenue reported that the lands in question were not cultivated for the past 8 years.

(vi) The buyer, to whom the appellant sold the lands, i.e. M/s. Rajalakshmi Education Services Pvt. Ltd., purchased the lands for the purpose of construction of Engineering college."

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