KANJI GANESH PATEL HUF,MUMBAI vs. INCOME TAX OFFICER, WD-22(2)(1), MUMBAI

Aggrieved assessee preferred an appeal before the learned CIT – A on this ground. The learned CIT – A held that it is for the assessee to prove that the above income is an agricultural income is not for the revenue to prove that such income is not an agricultural income according to him the assessee has miserably failed in producing evidence like proof of claim of agricultural land owned by the assessee either before the AO or during the appellate proceedings. Though the assessee has filed an agreement with the cultivator of the learned, but assessee has not obtained details of the all the income and expenditure Page 2 of 5 Kanji Ganesh Patel HUF A Y 2014-15 ITA number 1186/MM/2024 statement from the said person for verification. The agricultural sale produce invoices are also in the name of the assessee then what is the role of the person cultivated the land. The person who is a cultivator has also failed to prove that he has indulged in such agricultural activities. Accordingly, he confirmed the denial of exemption of agricultural income to the assessee. Therefore, the assessee is in appeal before us.

The learned authorized representative submitted a 54 pages paper book. He submitted that it is not the first year in the case of the assessee where the agricultural income is claimed as exempt under section 10 (1) of the. Assessee is claiming such exemption for assessment year 2013 – 14 to assessment year 2020 – 21. The assessee has been granted on four occasions an exemption in assessment proceedings under section 143 (3) of the act. He produced such assessment orders. He further stated that a certificate of land holding is also provided in form number 7/12 which is held by the assessee for a long period. The form number 12 which shows the produce cultivated for the impugned assessment year as well as for past two different years. He also referred to the sales bill for agricultural produce sold in the local agricultural produce marketing committee. Such sale proceeds received in the bank account of the assessee. He further referred to the memorandum of understanding executive with the cultivator of land wherein the share of the assessee is mentioned. Therefore, he submitted that assessee’s claim should not be denied.

The learned departmental representative supported the orders of the lower authorities.

We have carefully considered the rival contention and perused the orders of the lower authorities. The fact of the case shows that assessee is disclosing agricultural income since assessment year 2013 – 14 in the first instance where assessment made under section 143 (3) Page 3 of 5 Kanji Ganesh Patel HUF A Y 2014-15 ITA number 1186/MM/2024 of the act the agricultural income of the assessee was accepted to the extent of Rs. 2,833,845/–. Further for assessment year 2016 – 17 assessee has claimed exemption of Rs. 3,466,520/– as an agricultural income which is assessed under section 143 (3) of the act. Further for assessment year 2018 – 19 assessee has claimed exemption of agricultural income of Rs. 4,422,523/– and assessee is assessed for that year also under section 143 (3) of the act. F. Further for assessment year 2020 – 21 assessee has disclosed agricultural income of Rs. 4,207,140/– which is also assessed under section 143 (3) of the act. Therefore, agricultural income of the assessee is assessed by the learned assessing officer on several occasions and accepted the claim of the assessee in scrutiny assessment. Further for the other years such as assessment year 2014 – 15, 2015 – 16, 2017 – 18 and 2019 – 20, assessee has claimed exemption of agricultural income ranging from Rs. 27 lakhs to Rs. 46 lakhs and those returns are not disturbed. A further assessee has produced holding of the land and agricultural produce cultivated on such land for all these years including the impugned assessment year. The sales bill of agricultural produce is sold through agricultural market committee and appropriate markets assessee is also paid, sales consideration is received in the bank account of the assessee, for the purpose of sharing of the agricultural produce a memorandum of understanding executive with the farmers is also shown wherein it is stated that such land is with the same cultivator since financial year 2002 – 03. According to the agreement he was supposed to bear the expenditure of agricultural. The case of the assessee is that sale consideration of only 65% of the agricultural produce is with the assessee and the balance of 35% is with the cultivator of the land who is supposed to bear the expenditure. The identity card of the cultivator of the learned was also available. In view of such overwhelming evidence, we find that revenue cannot blow hot and cold in the same breath wherein in one Page 4 of 5 Kanji Ganesh Patel HUF A Y 2014-15 ITA number 1186/MM/2024 assessment year it accepts the claim of the assessee after scrutinizing the claim and in the second year it disturbs the same despite same evidence are produced. For the last several years the assessee is claiming exemption of agricultural income and this assessment year is the lowest amount of such exemption. Therefore, the orders of the lower authorities are reversed, and solitary ground of appeal

is allowed directing the AO to consider Rs. 2,748,802/– as agricultural income of the assessee exempt under section 10 (1) of the Act.