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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI RAMIT KOCHAR
per learned DR is infact income not derived from agricultural operations but is an income from unexplained sources.
We have considered rival contentions and perused the material on record. We have observed that similar issue came up before Chennai- tribunal for ay: 2009-10 in assessee’s own case , wherein after considering contentions of both the parties and perusing material on record , tribunal was pleased to hold that 75% of the income declared by assessee to be an income from agricultural , vide its orders in dated 07.10.2016 , by holding as under:
The first ground relates to restricting the claim of agricultural income at 50% of Rs.18,33,002/-. In the return of income, the assessee has claimed agricultural income at Rs.18,33,002/-. Since the assessee has not carried out any agricultural operation, the Assessing Officer treated the above income as “income from unexplained sources” and brought to tax.
5.1 On appeal, after considering the submissions of the assessee and by following the decision of Coordinate Bench of the Tribunal in assessee’s own case for earlier assessment years in to 1511/Mds/2011 dated 06.06.2013, wherein it was held that once the assessee has proved the holding of the agricultural lands, to presume that no agricultural income was derived therefrom was unfair, the ld. CIT(A) has restricted 50% of the income of Rs.18,33,002/- as income derived from the said land holdings and sustained balance 50%.
5.2 Before us, the ld. Counsel for the assessee has contended that the ld. CIT(A) was not correct in restricting the agricultural income and pleaded that the disallowance of 50% of agricultural income should be treated as income from agriculture. On the other hand, the ld. DR supported the order of the ld. CIT(A).
5.3 We have considered both the sides, perused the materials available on record and gone through the orders of authorities below. The assessee has claimed agricultural income at Rs.18,33,002/-. Since the assessee was engaged in the business of real estate, the Assessing Officer has held that the assessee cannot be considered as a cultivator or receiver of rent in kind as per the definition under section 2(14) of the Act and made the disallowance by treating the above income as income from unexplained sources. It is not disputed that the assessee was holding agricultural land to claim agricultural income. In this case, the assessee has claimed agricultural income in the form of lease rent receipt in respect of the agricultural lands at different places. Against the appeals filed by the assessee for earlier assessment years, the Tribunal vide its order dated 06.06.2013 has held that once the assessee has proved the holding of the agricultural lands to presume that no agricultural income was derived therefrom was unfair. However, in the absence of complete details with regard to deriving of income from the said lands, the ld. CIT(A) allowed 50% of the income of Rs.18,33,002/- as income derived from the said land holdings and sustained the balance disallowance.
5.4 The main dispute of the Department is with regard the income from the lands at Kolli Hills and Ulagankathan village. The above location of the land holdings are not situated in metro city so that the lease-holder can execute agreement or of any kind and the assessee can produce the same before the authorities below. We have carefully considered the appellate order and assessment order passed by the authorities below on this issue. When the agricultural land held by the assessee was not disputed, it cannot be held that there was no income from the above said agricultural land holdings. Since the ld. CIT(A) restricted the disallowance on estimated basis in the absence of material evidence for the income earned by the assessee, we are of the considered opinion that the disallowance sustained by the ld. CIT(A) is on higher side and it has to be reasonably reduce the disallowance sustained by the ld. CIT(A). Accordingly, we allow 75% of the income of Rs.18,33,002/- as income derived from the said land holdings and the Assessing Officer is directed to disallow the balance 25%. Thus, the ground raised by the assessee is partly allowed. “
6.2 Respectfully following the aforesaid appellate order dated 07.10.2016 passed by tribunal in for ay: 2009-10 and in order to maintain consistency , we allow 75% of the income to the tune of Rs. 10,20,708/- declared by assessee as agricultural income , by relying on the decision of the Hon’ble Supreme Court in the case of Radhasoami Satsang v. CIT reported in (1992) 193 ITR 321(SC) in order to maintain consistency. We note that learned CIT(A) accepted agriculture income from said lands held by assessee to the tune of Rs. 10,000/- per acre for impugned ay and Revenue has neither filed any appeal nor filed any cross objections against the said decision of learned CIT(A) accepting agricultural income partially from said land to the tune of Rs. 10,000/- per acre. Thus, the appeal filed by assessee is partly allowed as indicated above. We order accordingly.
In the result, the appeal filed by the assessee in 2008-09 is partly allowed as indicated above.
Order pronounced on the 10th day of February, 2020 in Chennai.