The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) in a recent judgment directed the Assessing Officer ( AO ) to treat Income of an Assessee as ‘Agricultural Income’ in light of disclosure of sufficient documentary evidence proving the same.
The judgment was rendered by ITAT while hearing an Income Tax Appeal filed by the Assessee, Shri Kolandasamy against the Order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi upholding the Assessment Officer’s (AO) refusal to classify the Income gained by the Assessee as ‘Agricultural Income’.
The Assessee submitted that he had conducted cultivation on the ancestral property priorly utilized by his grandfather for farming, and generated an income of Rs.9.37 Lacs and also received capital gains of Rs.0.41 Lacs by sale of Agricultural Land.
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The AO in opposition, claimed that an amount of Rs.9.37 Lacs had been furnished by the Assessee as ‘Agricultural Income’ but was not backed with evidence proving that it indeed has been gained through Agricultural means.
Upon inspection, the AO observed that the agricultural lands used by the Assessee for cultivation stood on multiple survey numbers and were owned by the Assessee’s grandfather along with other persons; AO cited the lack of registration of the land in the Assessee’s name to disqualify the Assessee from receiving the credits due to an Agricultural Land.
The AO further observed that the Adangal Certificate issued by the Mandal Revenue Office recorded the cultivation of coconut tree, sugarcane, paddy and gingelly as opposed to the Assessee’s submission that the Income had been generated by sale of turmeric.
The two-member Bench of ITAT, Chennai comprising Manoj Kumar Aggarwal, Accountant Member and Manu Kumar, Judicial Member observed that the Assessee has furnished sufficient documentary evidence including Chitta and Adangal to prove that certain agricultural activity had been conducted on the said land.
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Further, ITAT underpinned the Assessee’s capital gains of Rs.0.41 Lacs received the from sale of Agricultural Land priorly owned by his late father.
In light of the AO’s inability to adduce material evidence to disprove the Assessee’s availment of Agricultural exemptions, ITAT par proceeded to accept the agricultural income returned by the Assessee.
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