15 November 2014
One of the Assessee being an Association of Persons filed Income Tax Return under ITR-5 showing Income from Agriculture Rs. 2,50,000/-. It was taxed at maximum rate i. e. 30% which comes to Rs. 75,000/-. An exemption on Agriculture Income Rs. 75,000/- was claimed. While assessment, the assessing officer has allowed deduction of 10% i.e. Rs. 25,000/- on agriculture income and tax liability of Rs. 50,000/- along-with interest U/S 234. Kindly explain whether the action of Assessing Officer is justified as the Agriculture Income is tax free and added for Rate purpose only.
CAclubindia
