SMT URMILA RAMESH ,MANGALORE vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-2(1), MANGALORE

Per Jason P Boaz, Accountant Member

These appeals by the assessee are directed against the separate orders of CIT(A), Mangaluru, both dated 29.06.2018 for Assessment Year 2012-13 and 2013-14. Since common issues are involved, these appeals were heard together and are being disposed off by way of this combined order.

2.1 The assessee, an individual, is a partner in various firms engaged in real estate business. There was a survey u/s 133A of the Income Tax Act, 1961 in the assessee’s case on 26.05.2012.

ITA Nos. 2505 and 2506/Bang/2018 Page 2 of 15 2.1.1 For Assessment Year 2012-13 the assessee did not file her return of income u/s 139(1) of the Act even though there was taxable income. It was only in response to notice u/s 142(1) of the Act, issued by the Assessing Officer (‘AO’), that the assessee filed the return of income for Assessment Year 2012-13 on 31.12.2012 declaring income of Rs.27,56,780/- under the heads ‘Salary’, ‘Income from House Property’, ‘Profits and Gains from Business and Profession’ and ‘Income from Other Sources’ and agricultural income of Rs.6,42,593/-. The case was taken up for scrutiny for Assessment Year 2012-13 and the assessment was completed u/s 143(3) of the Act vide order dated 20.12.2014 wherein the assessee’s income was determined at Rs.34,69,676/- in view of the following additions/disallowances:

(i) Disallowance of deduction claimed u/s 57 Rs.1,09,966/- (ii) Disallowance out of agricultural income declared Rs.6,02,930/-

Agricultural income was determined at Rs.39,663/-.

2.1.2 Aggrieved by the order of assessment dated 20.12.2014 for Assessment Year 2012-13, the assessee filed an appeal before CIT(A), Mangaluru, which was dismissed vide the impugned order dated 29.06.2018.

2.2.1 For Assessment Year 2013-14, the assessee filed her return of income on 30.03.2014 declaring total income of Rs.30,79,60/- and agricultural income of Rs.7,67,935/-. The case was selected for scrutiny for this Assessment Year and the assessment was completed u/s 143(3) of the Act vide order dated 24.03.2016, wherein the assessee’s income was determined at Rs.37,43,035/- in view of the following disallowances: (i) Disallowance of deduction claimed u/s 57 Rs.1,92,510/- (ii) Disallowance out of agricultural income declared Rs.4,70,845/-

ITA Nos. 2505 and 2506/Bang/2018 Page 3 of 15 Agricultural income was determined at Rs.2,97,090/-.

2.2.2 Aggrieved by the order of assessment dated 24.03.2016 for Assessment Year 2013-14, the assessee filed an appeal before CIT(A), Mangaluru; which was dismissed vide the impugned order dated 29.06.2018.

ITA Nos. 2505 and 2506/Bang/2018 Page 4 of 15

5.1 At the outset, the learned AR for the assessee submitted that this ground (supra) challenging the disallowance u/s 57 of the Act is not being pressed by the assessee in this appeal. This ground No. 2 is therefore dismissed as not pressed.

6.1 In this ground (supra), the assessee denies itself liable to be charged interest u/s 234A, 234B and 234C of the Act. The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon’ble Apex Court in the case of Anjum H. Ghaswala (252 ITR 1) (SC) and I therefore uphold the AO’s action in charging the said interest. The AO is, however, directed to recompute the interest chargeable while giving effect to this order.

ITA Nos. 2505 and 2506/Bang/2018 Page 5 of 15 7. Ground No. 3 and 3.1 – Agricultural income

7.1 In these grounds (supra), the assessee challenges the orders of the CIT(A) in sustaining the additions made in respect of agricultural income to the extent of Rs.6,02,930/- for Assessment Year 2012-13 and Rs. 4,70,845/- for Assessment Year 2013-14. It is further contended in this regard that the CIT(A) ought to have appreciated that the assessee has ownership of large holdings of agricultural lands and has been consistently deriving agricultural income for several years and therefore determination of Rs.39,663/- and Rs.2,97,090/- as agricultural income for which the assessee produced sale vouchers in the years under appeal are unjustified and arbitrary. In support of the grounds raised, the learned AR for the assessee placed reliance upon the written submissions dated 19.05.2018 put forth before the CIT(A); copies of which are placed at pages 14 to 18 of Paper Book for Assessment Year 2012-13 and pages 39 to 43 of Paper Book for Assessment Year 2013-14.

7.2 Per contra, the learned DR supported the finding rendered by the CIT(A) in the impugned order. According to the learned DR, the CIT(A) in the impugned orders has examined and considered the assessee’s submissions dated 19.05.2018 referred to above for both Assessment Years 2012-13 and 2013-14 (supra) at length and has rejected the assessee’s claims in respect of agricultural income. It is submitted that the learned AR has failed to bring on record material evidence to controvert the findings of the learned CIT(A) and prayed that therefore the assessee’s appeals on this issue ought to be rejected.

7.3.1 We have heard the rival contentions and perused and carefully considered the material on record. The facts and issues and grounds for consideration in the appeals for Assessment Years 2012-13 and 2013-14 in the case on hand are admittedly similar / common except for the figures involved and therefore, the finding rendered for Assessment Year 2012-13 will hold good for Assessment Year 2013-14 also. It is

ITA Nos. 2505 and 2506/Bang/2018 Page 6 of 15 seen that in the impugned order for Assessment Year 2012-13, the CIT(A) has considered the assessee’s submissions, the AO’s views in the matter and judicial precedents in this regard as under at paras 5.3 to 5.3.10 thereof:

5.3 Ground No. 3 – Disallowance out of Agricultural income 5.3.1 The Appellant declared agricultural income of Rs.6,92,593/-. The assessing accepted only Rs.89,663/- as agricultural income, in support of which the appellant submitted the vouchers towards sale of agricultural produce. The balance of Rs.6,02,930/- was added back to the returned income under the head sources.

5.3.2 The relevant portion of the assessment order is as under: “The assessee repeats the arguments given by her in the earlier submission but does not substantiate her claims with any kind of evidence. To create some kind of conviction in the arguments placed by the assessee, the assessee could have furnished the names and any kind of identification with respect to the servants that are being mentioned by her. The assessee also states, "the agricultural income offered in the past and the nature of holding of agricultural land and the investment made by me in acquiring agricultural property in the recent past, I hope you will be convinced of my income admitted from agriculture" The assessee states that because agricultural income was offered in the past, the agricultural income offered in the present year is also genuine. This reasoning cannot be accepted for the lack of logic. The assessee states that because the agricultural income was accepted in the previous years, the same should be accepted this year which is an irrational argument. What the assessee should have ideally done was to furnish relevant proof to substantiate her claims on the various opportunities that were afforded to the assessee. In spite of specific and precise information called for from the assessee, there has been no substantiating evidence from the assessee 's front. Also, argument that the assessee holds huge tracts of agricultural land and hence, the income has to be accepted is also acceptable. The assessee failed on more than one occasion to furnish credible, cogent evidence to prove the earning of agricultural income. Despite this, to accept that agricultural income is earned is not acceptable. Also. most of the RPC copies furnished by the assessee do not contain the description of the nature of the land or the kind of crop. Hence, the assessee has failed to furnish am' kind of evidence to prove her claim of agricultural income apart from the payment vouchers of sales of agricultural produce amounting to • 8 9663. The assessee also stated that, "I wish to state that the document of agricultural land and RTC etc. were verified by you during my wealth tax assessment proceedings " Here, it has to be noted that what was scrutinised during the proceedings of wealth tax assessment was valuation of assets and not the ownership or the production out of these

ITA Nos. 2505 and 2506/Bang/2018 Page 7 of 15 lands. These are 2 entirely different aspects. Hence, the argument that as the valuation for wealth tax purposes has already been completed, it is also proved that these lands produce agricultural products is incorrect and baseless. Hence as been explained above, the amount of agricultural income for which the assessee failed to furnish any kind of evidence, is being treated as not being agricultural in nature and hence, not exempt and added back to the income.

5.3.3 Submissions filed with the appeal Denial of exemption of agricultural income to the extent of Rs. 6,02,930/-: For the A. Y. 2012-13, your appellant had admitted agricultural income of Rs. 6,92,593/-. Your appellant had made submissions with regard to the extent of land and copy of the records of income from agricultural land extracted from books of accounts. Some sample bills of coconuts sold to a star hotel in order to state that there was agricultural income on account of large holding of agricultural lands. The nature of agricultural activities and some sample copies of RTC were also submitted. Your appellant had also filed explanation for the quantum of agricultural income offered which is mainly due to the additions to the land acquired over the years and higher yield of produce besides better realisation of agricultural income due to the spurt in the value of agricultural produce in the recent past. However, the A.O. proposed through show cause notice why disallowance of interest claimed to the extent of Rs. 1,09,960/- being made and treat agricultural income of Rs. 6,02,930/- to be considered as taxable income. In response there to your appellant had filed a detailed reply giving the reasons for claiming the interest paid to Larmanananda Co- operative Society and more explanation with regard to agricultural income and stated that the proposal of the A.O. to treat the agricultural income ()tiered to be considered as taxable will be arbitrary and unlaitful. Your appellant had substantial investments made in agricultural property .for the past several years. Your appellant had been consistently offering agricultural income as detailed below: 2009-10 Asst. Rs. 2,60,595/- 2010-11 Asst. Rs. 4,16,383/- 2011-12 Asst. Rs. 7,88,725/- It was pointed out -to the A.O. that there was substantial additional investments in agricultural land in the past 5-4 years and such agricultural lands included standing crops. The attention of the A.O. was invited to the Wealth tax returns where the extent of agricultural land was disclosed and the addition to the agricultural lands in the recent past was also is available. It was also pointed out to the A.O. that there is no compulsory requirement to maintain accounts of agricultural income and there were agricultural lands at different locations which were looked after by trusted servants. It was also .stated that the agricultural produce being sold as farm sale at different locations as there is demand and transporting to a market place will amount to additional cost by way of cost of transport, loading unloading and involvement of man power. Your appellant had produced sample vouchers of only coconuts sold to a star hotel. It is unfortunate that the A.O. had taken an adverse view of the entire explanation to recognise the agricultural income only to the extent of sample vouchers produced for convincing him of the receipt of agricultural income. Your appellant wishes to state that

ITA Nos. 2505 and 2506/Bang/2018 Page 8 of 15 in the recent past your appellant had purchased agricultural property including standing crops as detailed below: Asst. Year Purchase consideration * 2006-07 Rs. 40,99,025/- 2007-08 Rs. 77,22,860/- 2008-09 Rs. 30,01,590/- 2009-10 Rs. 26,39,364/- 2010-11 Rs. 4,55,205/- 2011-12 Rs. 1,73,32,540/- (*Figures adopted from Wealth Tax return) The above investment has not been appreciated by the A.O. and he rejected all the explanations to reject the claim of genuineness of earning agricultural income to the extent of Rs. 6,92,593/-. The agricultural income earned by your appellant certainly less compared to the total investments in agricultural property and treating the same as taxable under the Income Tax Act by the A.O. is unlawful, arbitrary and only imaginary stand taken by the A.O. without any basis whatsoever. As per the Income Tax Act the A.O. ought to have spelt out as to section under which he proposes to tax the same. Simply adding to the total income without defining the head of income under which the same is assessable under Income Tax statutes is bad in law. Such arbitrary and unlawful additions are not sustainable under the Income Tax Act. Aggrieved by the arbitrary and unlawful addition made by the A.O. to the income returned and charging to tax the aforesaid income and in particular without defining the nature of income to be taxed in respect of the sum of Rs. 6,02,930/-, this appeal is preferred and it is prayed that the addition to the income returned to the extent of Rs.7,12,896/- (1,09,966/- + 6,02,930/-) may please be directed to be deleted in the interest of equity and natural justice. The reasons for denying the exemption of agricultural income as per the definition in the IT law by the A.O. appears to be on some pre-test or other is not warranted in the case of your appellant. The name of your appellant not appearing in some RTC copies and the nature of crop not mentioned in some of the RTC is not a valid ground .far not considering bona-fide nature of ownership of large extent of agricultural land and agricultural income admitted by your appellant . He also pleaded that the wealth tax assessments are separate and the income tax assessments are separate, but failed to understand that the same A.O. had completed the wealth tax assessment and after detailed examination of holding of agricultural land during wealth tax assessments recently completed orders u/s 16(3) of the W. T Act. It is respectfully submitted that in revenue records the RTC is an important record which contain the survey number and location of agricultural land and also the extent of land. The type of crop not mentioned in the RTC will not negate holding of the agricultural property owned by your appellant. At any rate the minor deficiency as pointed by the A.O. is not a sufficient ground for the A.O. to deny the nature of agricultural income admitted in the return of income and there is no justification in levying tax by not considering exemption for the agricultural income. 5.3.4 Written submissions dated 19th May 2018 Treating a major portion of the agricultural income declared in the return of income disallowed by the A.O. to the extent of Rs. 6,02,930/-:

ITA Nos. 2505 and 2506/Bang/2018 Page 9 of 15 The A.O. has gone with the presumption that your appellant has claimed deduction for agricultural income. In fact your appellant has declared agricultural income of Rs. 6,92,593/-. During the course of assessment proceedings the learned A.O. requested for the production of books of accounts, vouchers and evidences for having arrived at the agricultural income offered in the return of income. It was explained during assessment proceedings that your appellant has large holdings of agriculture lands for the past several years and in the preceding 6- 7 years substantial agricultural land with standing crops was acquired. It was stated that no books of accounts were maintained for agricultural income. The surplus remaining after meeting the expenses, deposited in the bank accounts and coconuts sold to one hotel was admitted as agricultural income. The same A.O. has completed the wealth tax assessments and on account of exemption claimed for agricultural land he called for several documents to verify the exemption claimed for agricultural lands from wealth tax and only after verification of RTCetc being satisfied of my case accepted the return of wealth . While coming to the income tax assessment the same A.O. had taken a adverse view inconsistent with the treatment given in the scrutiny assessment of wealth tax proceedings. The stand taken by the A.O. to consider the bona-fide nature of agriculture income declared in the return of income is a) Your appellant has not produced books of accounts for arriving at the agricultural income declared in the return of Income. b) The sample RTC produced in support of your appellant's ownership of agricultural land the A.O. states that in some of the RTC the name of the assessee is not disclosed and the nature of agriculture crop are not mentioned. In the case of recent purchase of agriculture land the name of the erstwhile owner appears in the RTC till the revenue authority enters the name of your appellant. In some cases if the nature of crop is not mentioned in the RTC it does not mean that the land mentioned in the RTC is not agricultural property. The same A.O. having accepted the same lands as agriculture land in wealth tax proceedings cannot take a different stand in income tax proceedings.

Moreover the nature of agriculture land or otherwise can he verified ,from the document of title deeds as the stamp duty value for agriculture land is very much lower compared to non agriculture land. In the case of your appellant there was no requirement of maintaining books of account under the income tax law. It has been submitted that the trustworthy care-takers are put in place to supervise the agricultural operations. The sale proceeds of the agricultural produce take place in the property where it is situated as many customers in the neighborhood purchase the agriculture produce like coconut, areca nut, pepper paddy, seasonal fruits, vegetables etc. Your appellant has found it prudent to sell the produce at different locations where the agricultural lands are situated to save cost of transportation, loading and unloading and to avoid additional cost of labour and supervision of sale proceeds of produce. The amount of agricultural income received from the care-takers after incurring the expenditure for manure, labour and maintenance of agricultural land is deposited into the bank account of your appellant periodically. The A.O. ignored such deposits

ITA Nos. 2505 and 2506/Bang/2018 Page 10 of 15 of agricultural income but considered the sale proceeds of coconuts received from a reputed hotel by cheque only is accepted as agriculture income.

Your appellant has invested large sums for purchase of agricultural property in the preceding 6-7 years which has been mentioned in the Statement of Facts which is part of the appeal proceedings. The same lands purchased are also reflected in the wealth tax returns which has been examined in detail and accepted by the same A.O. The aggregate value of the purchase consideration of agricultural land acquired in the preceding 6-7 years comes to over 3.50 crores. In the A.Y. 2011-12 alone there is additions of agriculture land to the tune of Rs. 1,73,32,540/- . Moreover all these purchase of agriculture property is with standing crop which could be easily realized and sold. If one compares the agriculture income admitted and the investment made in the agriculture property in the past few years, you will please note that the agriculture income admitted is less than 2% of the total investment.

The A.O. did not appreciate the evidence produced before him during assessment proceedings and declined to consider the agriculture income offered as not genuine. The opinion of the A.O. is arbitrary and imaginary. Treating the agricultural income offered in the Return of Income and considering the same as taxable income is unlawful and unacceptable. The A.O. does not spec* in the assessment order under what head of income the agricultural income admitted in the return of income is brought w lux. This is evidenced by the following observation by the A.O. made in the assessment order viz.. "The amount of agriculture income for which the assessee has failed to furnish any kind of evidence, is being treated as not being agricultural in nature and hence not exempt ". There is duty cast on the assessing officer to compute the assessable income under the provisions of Income Tax Act. Whether the income brought to tax is business income or income from other sources or as un disclosed expenditure or investment or deposits to be considered as taxable under the Income Tax Law. There is no provision under the Income Tax Law to disallow agricultural income declared and bring to tax as taxable income without classifying or specking the section of the income tax under which the same becomes assessable. As such it is prayed that the unlawful addition of Rs. 6,02,930/-made to the returned income may please be directed to be deleted in the interest of equity and natural justice. In the case of your appellant the large holdings of agricultural land reflected in the wealth tax returns which has been verified and accepted hi' the same A.O. but does no/ accept the same facts in income tax proceedings is unacceptable. The investment in agricultural land with standing crops purchased by your appellant in the preceding 6-7 years with the large investment of over 3.50 crores should have been taken note of by the A.O. while considering to tax Rs. 6,02,930/- stating it is not genuine agricultural income. Your appellant is enclosing herewith a statement containing the investments made in agricultural lands during 2011-12 assessment along with details of document no., purchase cost, stamp duty, registration charges paid, date of purchase and other relevant facts to convince the bona-fide holding of large agricultural lands with standing crop. Agriculture income as such is not taxable under the I. T Act but for rate purpose the same is reckoned. The same

ITA Nos. 2505 and 2506/Bang/2018 Page 11 of 15 investment if your appellant had made by way of bank deposits, she would have earned 25-28 Lakhs P.A. Whereas the net agricultural income offered by your appellant is only Rs. 6,92,593/- which amounts to less than 2% yield on investment. This amply explains that the A.0 has erred in appreciating the facts of your case of your appellant and came to wrong conclusions to garner unlawful tax from your appellant. As such the action of the A. 0. to tax the sum of Rs. 6,02,930/- is arbitrary. Whereas your appellant has produced sufficient explanation for the source of agricultural income along with proper evidence of large holding of agricultural lands, details of purchase of agricultural properties during 2011-12 assessment, furnishing details of document no. date of purchase, cost of purchase and sample RTC's and in addition to wealth tax assessment order which has been accepted after detailed scrutiny of exemption claimed for agricultural lands. It is unfortunate that the A.O. has not given any weightage or credence for the substantial evidence documents in possession of your appellant. The A.O's finding that not maintaining books of accounts, vouchers etc ignoring other evidences in favour of your appellant to make an addition of Rs.6,02,930/- is unjust , uncalled for and unlawful . 5.3.5 The assessing officer asked the Appellant to furnish information in the form of proof of agricultural income and expenditure, RTC copies and the breakup of income from agricultural land holdings. The Appellant submitted the vouchers towards sale of agricultural produce for only Rs.89,663/-. Regarding the rest of e agricultural income, the Appellant relied on the agricultural land holding and agricultural income declared in the past. It is submitted that the investment in agricultural land in the preceding 6-7 years was over Rs.3.50 crores. It was also submitted that if the Appellant had invested in bank deposits, she would have earned Rs.25-28 Lakhs per annum, whereas the net agricultural income offered by the appellant was only Rs. 6,92,593/- which amounts to less than 2% yield on investment. The Appellant also submitted that the Appellant purchased agricultural lands along with standing crops. It is also submitted that there is no requirement to maintain accounts of agricultural income. The agricultural produce was sold as farm sale at different locations as there was demand and saved cost of transportation, loading and unloading. The agricultural lands at different locations were looked after by trusted servants and the net of the agricultural sale proceeds were deposited in the bank. It was also submitted that over a period of time, the realisation and yield of agricultural income will be higher in view of the recent spurt in value of agricultural produce. 5.3.6 The following undisputed facts/were noticed in the case of the Appellant: a) The Appellant declared agricultural income as under: ASST. YEAR AGICULTURAL INCOME (net) 2009-10 Rs. 2,60,595/- 2010-11 Rs. 4,16,383/- 2011-12 Rs. 7,88,725/- , 2012-13 Rs. 6,42,593/- 2013-14 Rs. 7,67,935/-

ITA Nos. 2505 and 2506/Bang/2018 Page 12 of 15 The assessing officer accepted agricultural—income for the AY 2011-12. However, the assessing officer has not accepted the agricultural income declared for AY 2012-13 and AY 2013-14 and the appeals are pending for adjudication.

b) The Appellant purchased agricultural property and the purchase Consideration re-flected in the WT returns is as under: Asst. Year Purchase consideration* 2006-07 Rs. 40,99,025/- 2007-08 Rs. 77,22,860/- 2008-09 Rs. 30,01,590/- 2009-10 Rs. 26,39,364/- 2010-11 Rs. 4,55,205/- 2011-12 Rs. 1,73,32,540/-

c) The ownership of the agricultural land is not disputed as evidenced by the wealth tax returns filed and the wealth tax scrutiny assessment made by the assessing officer upto AY 2011-12. d) The Appellant submitted RTC copies before the assessing officer. In some of the RTC copies, the name of the Appellant as the owner and the details of crops grown was also not mentioned. 5.3.7 The submissions of the Appellant and the assessment order were considered carefully. There is no merit in the submission of the Appellant in view of the following: a) On a careful study of the various ratios laid down by the Courts. it would be seen that the basic operations must be performed on the agricultural land for the income therefrom to be agricultural income. In a general sense. the basic operations will mean tilling of the land, preparation of soil, sowing of the seeds, planting and such other comparable operations requiring human skill and labour upon the land. There may be some other operations like weeding, removal of undesirable growth, watering, planting of sapling, etc. Some further operations may also be necessary to make the produce fit for sale in the market. These are the necessary elements of cultivation and may enable one to decide whether the income is agricultural or not.

b) It is undisputed that the Appellant holds agricultural land. But were investment in agricultural land does not automatically result in agricultural income. c) The Appellant has produced any specific information with regard to the crops grown, area of cultivation, yield, gross agricultural income and

ITA Nos. 2505 and 2506/Bang/2018 Page 13 of 15 agricultural expenses before the assessing officer. Before me also, the Appellant for the reasons best known to her also did not produce any information with regard to the crops grown, area of cultivation, yield, gross agricultural income and agricultural expenses. d) The Appellant merely stated that she purchased agricultural land along with standing crop in AY 2011-12. However, the detail of the standing crop was not furnished. Although the Appellant purchased agricultural land along with standing crops in AY 2011-12, it cannot be presumed that the same crop would continue to yield agricultural income in the subsequent years also. e) The AR made elaborate general submissions (extracted in paras above) but did not produce any material information (not to talk of evidence) in support of the claim of agricultural income. 5.3.8 In respect of exemption of any income from income-tax, the cardinal principle is that the burden of proof is on the person who claims such exemption. It is the bounden duty of such person to place all relevant material and evidence before the income-tax authorities. In CIT v. R. Venkataswamy Naidu [1956] 29 ITR R 529 (SC), this principle was laid down with the observation that it is not for the income-tax authorities to prove that it is not agricultural income. In CIT v. Ramakrishna Deo [1959] 35 ITR 312 (SC), it was held that the law is well-established that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption claimed is under the Act and that a person who claims the benefit of exemption has to establish it. 5.3.9 The Hon'ble HIGH COURT OF MADRAS in the case of Sri B. Ramachandhiran [2014] 43 taxmann.com 430 (Madras) held that the onus on the earning of agricultural income entirely lies on the assessee to prove that the receipt of income was out of agricultural operation, in the absence of any material produced to discharge the onus in the manner known to law, the Assessing Officer rightly rejected the assessee's claim for granting exemption for receipt of agricultural income. The relevant portion of the judgement is extracted below: 7. We perused the order of the Assessing Officer as well as the First Appellate Authority and Income Tax Appellate Tribunal's order. It is not denied by the assessee that he had not produced any materials whatsoever as to the nature of crop grown and the nature of agricultural operation and the expenditure incurred thereof When the onus on the earning of agricultural income entirely lies on the assessee to prove that the receipt of income was out of agricultural operation, in the absence of any material produced to discharge the onus in the manner known to law, the Assessing Officer rightly rejected the assessee's claim for granting exemption for receipt of agricultural income. … 12. As far as the present case is concerned, if the assessee had any agricultural operation and earned income, certainly, it was always open to the assessee to bring and such material to substantiate the facts. The facts, therefore, ought to

ITA Nos. 2505 and 2506/Bang/2018 Page 14 of 15 have been brought before the Assessing Officer or before the First Appellate Authority to substantiate the caw (?f the assessee, that he had been in receipt of the income earned out of agricultural operation. In the absence of any materials shown or onus discharged in the manner known to law, we do not agree with the assessee's contention based on the decisions cited. In the circumstances, we have no hesitation in rejecting the Tax Case (Appeals) and thereby in confirming the order of the Tribunal. Consequently, the Tax Case (Appeals) stands dismissed. No costs. 5.3.10 In view of the above discussion, I am of the considered view that the Appellant failed to discharge the onus on the earning of agricultural income. In the absence of any specific information or evidence with regard to the crops grown, fixing crops on the lands purchased in AY 2011-12, area of cultivation, yield, "ass agricultural income and agricultural expenses, the action of the assessing effacer is hereby upheld. The ground no.3 is hereby rejected.”

7.3.2 On a careful appraisal of the facts on record and the observations/findings rendered by the CIT(A), after considering the AO’s views and assessee’s contentions (supra), I am of the considered opinion that before me, the assessee has failed to controvert with any material evidence, the cogent findings rendered by the CIT(A) in the impugned orders for Assessment Years 2012-13 and 2013-14 with respect to the determination of agricultural income for these years. In this view of the matter, I find no reason to interfere with or deviate from the findings rendered by the CIT(A) and uphold them. Consequently, ground Nos. 3 and 3.1 raised by the assessee for both Assessment Years 2012-13 and 2013-14 are dismissed.

Pronounced in the open court on this 27th day of November, 2018.

Sd/- Sd/- (G. MANJUNATHA) (JASON P BOAZ) Accountant Member Accountant Member Bangalore. Dated: 27th November, 2018. /NS/*

ITA Nos. 2505 and 2506/Bang/2018 Page 15 of 15 Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order

Assistant Registrar, ITAT, Bangalore.