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Facts
The assessee claimed agricultural income of ₹.71,06,500/-, which the Assessing Officer disallowed due to lack of supporting receipts and invoices for agricultural activities, treating it as non-agricultural income. The CIT(A) confirmed this disallowance.
Held
The Tribunal held that the rejection of the agricultural income claim solely for non-submission of receipts and invoices for expenditure was not justified, especially considering the consistent acceptance of such claims in previous and subsequent assessment years.
Key Issues
Whether the disallowance of agricultural income is justified solely on the ground of non-submission of receipts and invoices when the assessee has agricultural land and similar claims were accepted in other years.
Sections Cited
143(3)
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Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
Year: 2017-18 Kangayam Chennpalanisamy, Vs. The Income Tax Officer, No. 78, Cheran Towers, Arts College Corporate Ward 2, Road, Coimbatore 641 018. Coimbatore. [PAN:AFEPP8162K] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri Shreyansh Kumar Kochar, C.A. ��थ� की ओर से/Respondent by : Shri C. Sivakumar, Addl. CIT सुनवाई की तारीख/ Date of hearing : 21.08.2025 घोषणा की तारीख /Date of Pronouncement : 11.11.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 27.03.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18.
The assessee raised 6 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the disallowance made by the Assessing Officer on account of agricultural income.
3. It is noted that the assessee claimed agricultural income to the tune of ₹.71,06,500/- and in order to verify the same, the Assessing officer asked the details in substantiating the said claim. According to the Assessing officer, the assessee is having approximately aggregating to total 10 acres of agricultural land vide patta and not for non-production of any receipt nor invoice in support of agricultural income and expenses, disallowed the said claim by treating the same as non-agricultural income. The ld. CIT(A) vide para 6 of the impugned order confirmed the same.
4. According to the ld. AR Shri Shreyansh Kumar Kochar, CA submits that all along for AYs 2016-17, 2018-19, 2019-20 and 2020-21, the Revenue accepting the returned income with the claim of agricultural income, except for AY 2016-17, disallowance made on account of difference in the yield per acre with respect to sugarcane produce and drew our attention to the assessment orders placed on record in the form of paper book. The ld. AR prayed to delete the addition made towards disallowance of agricultural income.
The ld. DR Shri C. Shivakumar, Addl. CIT supported the order passed by the ld. CIT(A).
We have heard both the parties and perused the material available on record. On perusal of the assessment proceedings for AY 2016-17, we note that the assessee claimed agricultural income at ₹.69,04,500/-, but, however, the Assessing Officer restricted to ₹.54,60,000/- being the difference in sugarcane yield at 60 metric tonnes per acre vide his order dated 28.12.2018. Therefore, it is clear that there was no disallowance in the AY 2016-17 except minor variation on yielding of sugarcane produce per acre. Further, it is noted that for AYs 2018-19 and 2019-20, there were no scrutiny proceedings, but, however, the Revenue accepted the returned income with the claim of agricultural income of ₹.81,95,450/- and ₹.78,17,150/- respectively vide intimations. We find that there is no dispute with regard to accepting the returned income with the claim of agricultural income for AY 2018-19 and 2019-20. Further, for AY 2020-21, though it is selected for scrutiny on the basis of large agricultural income, the Revenue accepted the returned income with a claim of agricultural income, which is evident from the order dated 07.07.2022 for AY 2020-21 placed on record vide exhibit 3. Therefore, we find force in the arguments of the ld. AR that all along the Revenue is accepting the claim of agricultural income in the hands of the assessee, but, however, not accepted for the year under consideration only on the reason that no receipts supporting the agricultural activities were furnished before the Assessing Officer. Admittedly, there is no dispute with reference to having holding of agricultural land by the assessee in the year under consideration and in our opinion, rejecting the claim of agricultural income for non-submission of receipts and invoice for expenditure in support of agricultural activities, confirmed by the ld. CIT(A) is not justified and the addition made thereon is deleted. Thus, the ground raised by the assessee is allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 11th November, 2025 at Chennai.