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Facts
The assessee individual declared agricultural income of ₹8,37,020/- for AY 2018-19 and ₹4,36,520/- for AY 2019-20. The AO added these amounts as unexplained credit under Section 68 of the Act, as the assessee failed to provide sufficient documentary evidence of agricultural activities and income. The CIT(A) partially confirmed the addition, accepting 50% of the claimed agricultural income.
Held
The Tribunal held that the assessee failed to provide adequate evidence to substantiate the agricultural income claimed, beyond possessing land holdings. The lack of land records, cultivation details, sale particulars, and expenditure proof rendered the income claim unverified. Therefore, the addition made by the AO and partially confirmed by the CIT(A) was sustained.
Key Issues
Whether the assessee has provided sufficient evidence to prove the genuineness of agricultural income claimed, justifying its exemption or deduction.
Sections Cited
153A, 143(2), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R PER ABY T. VARKEY, JM: These are appeals preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal), (hereinafter referred to as ‘Ld.CIT(A)‘), Chennai-20, both dated 20.12.2024 for the Assessment Year (hereinafter referred to as ‘AY‘) 2018-19 & 2019-20. Since both the parties agreed that the sole issue involved in both the appeals are related to agricultural income of the assessee and therefore, the appeal for AY 2018-19 would be adjudicated and the result of which will be followed for AY 2019-20.
& 637/Chny/2025 (AYs 2018-19 & 2019-20) Padam Kumar :: 2 ::
The brief facts are that the assessee is an individual who filed his return of income (RoI) for AY 2018-19 on 31.10.2018 declaring total income of ₹18,32,240/-. For the relevant AY, the assessee has shown to have received income from salary, rent, agricultural income and interest on loans. Search was carried out at the assessee’s premise on 01.11.2018, pursuant to which, notice u/s.153A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) was issued and in response to the same, the assessee filed ITR reiterating the same income as declared in his ITR on 31.10.2018. The AO noted from the ITR that the assessee had declared agricultural income to the tune of ₹8,37,020/- and therefore, asked him to prove the agricultural income. Pursuant to which, the assessee filed certain documents to show that his family had substantial land holdings. However, the AO was of the view that the assessee didn’t furnish copy of the land records, details of expenditure incurred in connection with agricultural activities, details of parties to whom agricultural produce have been given, etc. According to the AO, since the assessee failed to prove the genuineness of income claimed to have been earned from agricultural activities, he added the amount of ₹8,37,020/- as unexplained credit u/s.68 of the Act.
Aggrieved, the assessee preferred an appeal before the Ld.CIT(A)
who noted that the assessee had filed RoI/ITR for AY 2018-19 on 31.10.2018 and the search happened on 01.11.2018 and since time was & 637/Chny/2025 (AYs 2018-19 & 2019-20) Padam Kumar available to issue notice u/s.143(2) of the Act for the relevant assessment year, the assessment stood abated as per the second proviso to Section 153A of the Act; and hence held that the AO was empowered to assess or re-assess the ‘total income’, taking into consideration not only the incriminating material unearthed during the search but also the other materials available with the AO including the income declared in the return (ITR); Thereafter, the Ld.CIT(A) noted that the assessee in order to prove the agricultural income had filed only copy of Patta in respect of land holding in the name of the assessee as well as his family members and didn’t furnish relevant copy of Chitta, Adangal, etc.. Therefore, he was unable to verify whether any crop was cultivated in the said land.
The Ld.CIT(A) further noticed that assessee couldn’t furnish any bill/invoice, etc., to corroborate the sale of agricultural produce or the expense incurred in respect of agricultural activities. And since, the assessee didn’t furnish the relevant documentary evidences to prove that actually any agricultural activity took place in the said land and since, the assessee only submitted copy of Patta which shows only that assessee was owner of both wet and dry lands, he didn’t accept the explanation of assessee regarding earning of ₹8,37,020/- as agricultural income. But, considering that assessee and his family had substantial agricultural land holding (47 acres of land), he assumed that the assessee might have received some agricultural income, which he estimated at ₹4,18,510/-. In & 637/Chny/2025 (AYs 2018-19 & 2019-20) Padam Kumar other words, the Ld.CIT(A) accepted 50% income as arising out of agricultural sources and the rest of the addition of ₹4,18,510/- was confirmed in the hands of assessee. Still not satisfied, the assessee is before us.
We have heard both the parties and perused the material available on record. We note that the assessee filed ITR/RoI on 31.10.2018 for AY 2018-19 declaring ₹18,32,240/-. The assessee’s premise was searched on 01.11.2018 and the AO taking note that the assessee had shown agricultural income to the tune of ₹8,37,020/- in his return asked him to prove the nature and source of the same (agricultural income). The assessee brought to the notice of the AO that he and his family has forty- seven (47) acres of wet/dry agricultural land. In the absence of copy of land records, details of expenses incurred in connection with agricultural activities, details of parties who purchased the agricultural produce, etc., the AO was of the view that the assessee couldn’t prove the genuineness of income claimed to have been earned from agricultural activities and therefore, rejected the claim of assessee and instead treated the amount of ₹8,37,020/- as unexplained credit u/s.68 of the Act. On appeal, the Ld.CIT(A) found that the assessee has submitted copy of Patta in respect of land holding in the name of the assessee as well as family members.
But he noted that the assessee failed to furnish copy of Chitta, Adangal, etc., which omission prevented him from verifying whether any crop was & 637/Chny/2025 (AYs 2018-19 & 2019-20) Padam Kumar cultivated in the said land. The Ld.CIT(A) also noted that the assessee failed to furnish any bill/invoice to corroborate the sale of agricultural produce or the expenses incurred in respect of agricultural activities.
According to the Ld.CIT(A), even though, the assessee and his family members owned substantial agricultural land, the income shown to have been received from agricultural activities couldn’t be verified in the absence of relevant evidences. The Ld.CIT(A) considering the fact that assessee & his family owned forty-seven (47) acres of agricultural land was of the view that the assessee might have earned some agricultural income and accepted 50% of the assessee’s claim ₹8,37,020/- as agricultural income and directed deletion of ₹4,18,510/- and confirmed balance amount of ₹4,18,510/- as unexplained for want of evidence in support of source of agricultural income. Before us also, the assessee failed to produce any evidence to prove that the assessee has derived income from agricultural activities, viz the Assessee failed to produce even before us any bill/invoice to corroborate the sale of agricultural produce or expenditure incurred in respect of agricultural activities. In such a scenario, we don’t find any infirmity in the action of the Ld.CIT(A) confirming ₹4,18,510/- (50% of ₹8,37,020/-) as unexplained. Therefore, the grounds of appeal raised by the assessee in respect of the addition of ₹4,18,510/- stands dismissed.
& 637/Chny/2025 (AYs 2018-19 & 2019-20) Padam Kumar :: 6 ::
For AY 2019-20, we find that the facts are same. The assessee had shown an amount of ₹4,36,520/- as agricultural income which was added by the AO u/s.68 of the Act. Since assessee failed to produce any evidence to substantiate the said income earned from agricultural activities, the Ld.CIT(A) on similar reasoning has sustained 50% of it and deleted 50% i.e. ₹2,18,260/-. Before us, no relevant evidence was filed/submitted which would substantiate the nature and source of ₹2,18,260/- as from the agricultural activity. In the absence of relevant materials to substantiate the agricultural activity/income, merely on the basis of substantial land holding, it cannot be presumed that assessee had earned exempt-agricultural income, moreover when assessee was searched there was no material found which disclosed any agricultural income/expenditure,. Hence, we confirm the impugned action of the Ld.CIT(A), on the same reasoning given for AY 2018-19, and dismiss the appeal of the assessee.
In the result, appeals filed by the assessee are dismissed.
Order pronounced on the 07th day of October, 2025, in Chennai.