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Facts
The assessee declared agricultural income and other income. During scrutiny, the assessee failed to furnish documentary evidence for the agricultural income. The Assessing Officer treated the entire agricultural income as unexplained income under Section 68 and applied Section 115BBE. The CIT(A) upheld the order.
Held
The Tribunal noted that the ownership of land was not solely in the assessee's name but also included family members. Considering the interest of justice and to allow proper substantiation, the matter was remitted back to the AO for a denovo assessment, focusing only on lands in the assessee's ownership.
Key Issues
Whether the entire agricultural income is to be treated as unexplained income under Section 68 and taxed under Section 115BBE, when ownership of land is not solely with the assessee and sufficient documentary evidence was not provided.
Sections Cited
68, 115BBE, 143(3)
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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI. LAXMI PRASAD SAHU & SHRI. KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member :
This is an appeal filed by the assessee against the Order passed by the NFAC - learned CIT(A), vide DIN : ITBA/NFAC/S/250/2024- 25/1072733772(1) dated 30.01.2025.
Briefly stated facts of the case are that assessee filed return of income on 31.03.2021 declaring income of Rs.53,54,810/- and exempted agricultural income of Rs.95,15,000/-. The case was selected for scrutiny and statutory notices were issued to the assessee. In the notice, various details were asked for but assessee failed to submit the same. Thereafter, another opportunity was given to the assessee. Finally assessee furnished some documents on 16.03.2022 submitting details and documents of land, bank accounts, Page 2 of 5 computation of income but failed to furnish any documentary evidence with respect to agricultural income shown. Assessee furnished failed to furnish documentary evidence with respect to sale of produce, crops cultivated, expenses made on purchase of seeds, any bill/invoices in respect of fertilizer, pesticides, labour charges, water bill, electricity bill, processing cost, etc. In return filed assessee furnished that he has received agricultural receipts of Rs.1,35,15,000/- from various home buyers (walk-in-purchaser) and made expenditure Rs.40 lakhs and declared Rs.95,15,000/- as agricultural income and enclosed RTC and submitted that assessee owns above 100 acres of agricultural land and growing coffee, pepper, arecanut, coconut, sandalwood, maize and other types of agricultural crops and he submitted that for Assessment Year 2017-18, the case of the assessee was selected for scrutiny and returned income filed by the assessee were accepted vide its Order No.ITBA/AST/S/143(3)/2019-20/1021865142(1) dated 07.12.2019. Further, on examination of the land details, it was found that RTC is in vernacular language and it was got translated and it was noticed that land was not in the name of the assessee himself as claimed by the assessee in his reply dated 25.03.2022 and ownership was not proved. Therefore entire agricultural income shown by the assessee was treated as income under section 68 of the Act and applied section 115BBE of the Act for computation of the income.
Aggrieved form the above Order, assessee filed appeal before learned CIT(A). Learned CIT(A) observed that the assessee filed minimum documents and assessee failed to furnish documents as per the requirements of the AO and noted that the entire agricultural receipts of Rs.1,35,15,000/- from walk in customers without any bills are unsubstantiated and relying on the judgment of Hon’ble Allahabad High Court in the case of Avdesh Kumar Jain Vs. CIT (1989) 178 ITR 443 and judgment of Hon’ble Apex Court in the
Aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned Counsel reiterated the submissions made before the lower authorities and submitted that the entire land ownership was proved and copies of RTC which is placed at Paper Book Page Nos.1 to 30 was referred and he filed labour payment details and copies of bills and Form 10 containing Page Nos.1 to 98 and submitted that learned CIT(A) has wrongly mentioned that nothing was submitted. However entire documents were submitted during the course of assessment proceedings and requested that the matter may be remanded back to the AO for fresh consideration.
On the other hand, learned DR relied on the Order of lower authorities and submitted that in the income tax proceedings every year is an independent Assessment Year therefore whatever facts of Assessment Year 2017-28 cannot be applied mutatis mutandis for the Assessment Year 2020-21. Several opportunities were granted to the assessee for producing documents however assessee failed to furnish required documents to prove the genuineness of the agricultural receipts shown in his return of income which is clear from the Order of the AO as well as CIT(A). He further submitted that as per the index of the paper book the ownership of the land belongs to assessee and in the name of his family members. Therefore assessee can show only the income from those lands which are in the name of assessee and cannot include the income of the lands of his family members.
Considering the rival submissions and perusing the entire material available on records and Orders of authorities below, we noted that here the dispute is only regarding agricultural income shown by the assessee. During Page 4 of 5 the assessment proceedings the assessee could not furnish the documents and AO made addition under section 68 of the Act of Rs.95,15,000/-. The total gross receipts shown by the assessee as agricultural receipt is Rs.1,35,15,000/- and assessee has claimed expenditure of Rs.40 lakhs which has been accepted by the AO. He has further claimed that he owned more than 100 acres of agricultural land which are irrigated and rainfed. Before us, assessee has furnished copy of RTC, details of expenditure incurred, etc., which is placed at Paper Book Page Nos.1 to 98. We also noted from the Assessment Order submitted by the assessee that the case for Assessment Year 2017-18 was assessed by AO accepted the return of income. Considering the facts of the case and in the interest of justice, we are remitting this issue back to the file of AO for denovo assessment and decide the issue as per law considering the land ownership of the assessee only. We noted that in the paper book index the assessee ha furnished ownership of land for himself and family members. . Assessee is directed to substantiate his case with cogent documents and not seek unnecessary adjournments for early disposal of the assessee. In case of failure, no second leniency shall be granted to the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.