Agricultural income can not be doubted merely for not paying agricultural cess to Krishi Upaj Mandi – ITAT
In a recent judgment, the ITAT Jodhpur has held that the agricultural income can not be disbelieved merely for not paying agricultural cess to Krishi Upaj Mandi
ABCAUS Case Law Citation:
ABCAUS 4061 (2024) (06) ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the addition made by the Assessing Officer (AO) disbelieving sale of agricultural produce and treating it as undisclosed income u/s 69A and subjecting it to higher tax rate u/s 115BBE of the Income Tax Act, 1961 (the Act).
The assessee had deposited cash in his bank account and claimed that the same was supported by the receipt of sale of agricultural produced. The receipts were issued bearing name of the Krishi Upaj Mandi having the stamp and serial number, wherein the name of seller, name of broker and the details of the sale of items had been mentioned.
The AO issued notice u/s 133(6) and confirmed the invoices produced by the assessee, wherein it was informed that the same were not approved by the agricultural Mandli. Upon receipt of this information the statement of assessee his son and help was recorded by the AO, wherein the AO confronted about the fact that whether the invoices and the agricultural activities done by the assessee is genuine or not.
In that statement the help confirmed to have employed and working on behalf of the assessee. He also stated that the agricultural produce were taken away by the person from the firm and therefore, he was not much aware about that aspect of the matter. Even he had confirmed that the weight was also conducted in his presence in the firm and it was not that same person come to collect the goods, but different person came to collect the different goods.
The AO disbelieved the agricultural income of the assessee on part, based on the information confirmed by Krishi Upaj Mandi wherein it was stated that the bills invoices were not approved by them and the party who had issued the bill had not paid the cess.
The AO drew an inference that invoices were coloured so as to justify to cash deposited by the assessee in his bank account as genuine cash transaction.
The Tribunal observed that it was evident from the record and various statements recorded by the AO, during the course of assessment proceedings, it was very much clear that the assessee had his son and his relative holding 50 bighas of agricultural land and the assessee was having facility for storage of agricultural produce. Even the Krushi Upaj Mandli based on the set of facts placed on record had not lodged any compliant for enquiry.
The Tribunal opined that on these facts, merely invoices which were not of registered firm or a person and having not paid agricultural cess, the same cannot be considered as non genuine.
The Tribunal noted that the Co-ordinate Bench had held in allowed the appeal in favour of the assessee of the assessee holding that that preponderance of probability theory would go in favour of the assessee as the predominant income available with the assessee is only the agricultural income. No other source of income was brought on record by learned Assessing officer and it was not in dispute that the assessee is not engaged in any business or profession.
Following decision of the Co-ordinate Bench, the Tribunal directed AO to delete the impugned addition.
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- Merely increasing/ reducing agriculture expenses/ income not result in taxable income
