No Cogent Evidence to Establish that Properties Sold by Taxpayer are Agricultural Land: ITAT deletes Addition of Rs.16.8 lakhs [Read Order]

The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs.16.8 lakhs, stating that there was no cogent evidence to establish that the properties sold by the taxpayer were agricultural land.

The assessee Shri D. Ramagopal stated that no income except for agricultural income of Rs.3.80 lakhs out of agricultural activities carried out by him in agricultural land in his name at Ravathur Pirivu and Yelaneli Village, Coonoor Taluk. However, the assessee could not file working of agricultural income except for filing of Mandi receipts for sale of agricultural produce. The gross receipts as per these Mandi receipts were Rs.5.43 lakhs.

The assessee filed bills for expenditure for Rs.1.53 Lakhs and worked out net agricultural income of Rs.3.90 lakhs. This income was stated to have been utilized by the assessee entirely for his personal drawings as per his statements under Section 131 of Income Tax Act, 1961. To verify the genuineness of the Mandi receipts, summons under Section 131 were issued to the 3 parties. However, the same was returned un-served as the parties could not be located at the given addresses

Accordingly, AO held that the income was not genuine. The claim of income was rejected. Since no statement of affairs was filed by the assessee and the application of bogus agricultural income was not available, no addition was made on this account.

The two member bench of the tribunal comprising Mahavir Singh (Vice President) and Manoj Kumar Agarwal (Accountant member) found that there was no cogent evidence to establish that the properties sold by the assessee were agricultural land. The assessee was also unable to furnish any evidence of incurring expenditure also.

Further during the year, the assessee sold two properties via sale agreement dated 31.07.2010 for sale of 67 ¾ cents of land for a consideration of Rs.8.04 Lakhs. As per the information furnished by the divisional engineer (H) C&M, Coimbatore-18 along with a sketch map, the total distance of this land from nearest municipality was less than 8 Kms and therefore, the land could not be held to be agricultural land.

The addition to the extent of Rs.16.86 Lakhs was unjustified. Therefore, ITAT deleted the addition to that extent, accordingly, the appeal stands partly allowed.

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