PILLA VENKATA RAMANA BABU,ANAKAPALLE vs. THE INCOME TAX OFFICER, WARD-4(2), VISAKHAPATNAM, VISAKHAPATNAM

In the above cited appeal, the appellant filed an appeal as he is aggrieved by the sustenance of addition made by the Ld.AO relating to agricultural income. The Ld.AO disbelieved the claim of the appellant that the cash deposit of Rs.16 lakh is out of his agricultural income. The appellant has stated that he is having 16 acres of land and there is agricultural income in the earlier and subsequent years. Hence, the claim of agricultural income should be accepted. This is the crux of argument of appellant before Ld.AO/Ld.CIT(A) and even before ITAT. Nowhere, the evidences relating to earning of agricultural income was filed. 3. The Ld.DR has pointed that to claim agricultural income, the appellant should have given evidences relating to agricultural operations, purchase of fertilizer, pesticides, evidences of sale bills of agricultural produce etc. The Ld.DR has also pointed out that the entire cash was deposited in November, 2016 which is deposited in demonetization period. The appellant claims that crops of different varieties like rice, cashew nut were raised and sold. The Ld.DR has pointed out that different crops will come in different seasons and they will be sold in different seasons of the year, whereas the appellant has deposited entire cash only during demonetization period and hence the explanation of the appellant is not be believed and the addition should be confirmed.

Before going into the merits of the case, it is observed that there is a delay in filing of appeal by 223 days. The appellant filed a letter stating that his father, who is aged about 85 years is suffering from various ailments and he had to take care of him. Apart from that, due to Covid after effects, he could not contact proper CA to file his appeal and filed certain medical certificates with reference to his father’s illness. In view of the same, the Ld.AR of appellant has pleaded that the delay in filing appeal may be condoned and the issues may bE decided on merits. As there is sufficient force in the contentions of appellant, the delay in filing of appeal is condoned and Bench proceeds to hear the appeal on merits.

Heard both sides. Coming back to deciding the appeal on merits, it is undisputed fact that the appellant has not produced any evidence relating to purchase of fertilizers, pesticides, sale bills of agricultural produce, details of gross and net agricultural income. It is settled law that the evidence relating to primary agricultural operations is a must to the claim of agricultural income. Mere having agricultural land can never be conclusive proof for having agricultural income. There is sufficient force in the arguments of Ld.DR, when he has stated that the entire cash was deposited in the demonetization period, whereas, if the genuine agricultural income comes in various seasons of year.

As no evidence was produced relating to agricultural income before lower authorities, one more opportunity is afforded to appellant to furnish all evidences relating to agricultural income and the matter is remitted back to the file of Ld.AO. The Ld.AO is directed to pass an order afresh after taking into consideration the evidences, if any. Needless to say, that an effective opportunity should be given to appellant. The Ld.AO is also directed to keep in mind the following decisions of various courts with reference to agricultural income and pass the order. (a) Mere contentions of agricultural income without evidence is invalid – Bachittar Singh 328 ITR 400 (Punjab & Haryana) (b) Where assessee failed to produce evidence about agricultural activities and not able to state to whom agricultural produce was sold, same is to be assessed as income from undisclosed sources – Avadhesh Kumar Jain 178 ITR 443 (ALL), 93 ITR 314 (Ker.) Travancore Co.Ltd. (c) The entries in the revenue records is a material evidence, but not conclusive to show that the land is agricultural or not. Further, evidence is required to show that the lands in question are agricultural at the material time to prove that it is agricultural lands- onus on the assessee – CWT Vs. Officer- in-Charge – 105 ITR133 (SC)