Agriculture income cannot be worked out on the basis of sale bills, purchases of pesticides etc.

Agriculture income cannot be worked out on the basis of sale bills, purchases of pesticides etc., but on the basis of landholding, crops grown and expected yield – ITAT

In a recent judgment, ITAT Chandigarh has held that the agriculture income cannot be worked out on the basis of sale bills, purchases of pesticides etc., it can always be determined on the basis of agriculture landholding, crops shown therein and what can be expected yield achieved from such a landholding. 

ABCAUS Case Law Citation:
4427 (2025) (02) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in sustaining the addition made by the Assessing Officer (AO) not accepting the claim of agricultural income.

The appellant assessee had filed his return of income wherein he has declared agriculture income.  The claim of the agricultural income of the assessee was rejected by the AO in an ex-parte assessment order.

Dissatisfied with the addition of the AO, assessee carried the matter in appeal before CIT(A).  He pointed out that in two consecutive succeeding assessment years he had declared agriculture income and both these returns had been accepted in scrutiny assessment under Section 143(3) of the Income Tax Act, 1961 (the Act).  He further contended that he had an agricultural land of more than 50 bighas wherein apple orchard has been planted. 

The CIT(A) did not accept the contentions of the assessee. The CIT(A) accepted the agricultural income in three instances of sale of agriculture products where ssessee submitted requisite evidence exhibiting sale of agriculture products.

The Tribunal observed that the record indicated that neither before AO nor before CIT(A), assessee had filed details of agriculture landholding nor he has filed any evidence from the Revenue record that apple orchard has been planted.  The assessee had only made a bald statement in his written submission that he owns 50 bighas of agriculture land where apple orchard is standing.  But to support that submission, he had not filed copy of Jamabandi or of Girdawari issued by the State Revenue Authorities. 

The Tribunal observed that the agriculture income cannot be worked out on the basis of sale bills, purchases of pesticides etc., it can always be determined on the basis of agriculture landholding, crops shown therein and what can be expected yield achieved from such a landholding. 

It was further observed by the Tribunal that if at 50 bighas of agriculture land, apple orchard had been planted and assessee provides details of number of trees, then the estimated agriculture income ought to have been worked out by the AO. 

Therefore, for a limited purpose, the Tribunal set aside the issue to the file of AO to examine whether the balance addition can be deleted or not.  The AO was directed to compare past agriculture income declared by the assessee in the light of agriculture landholding owned by him. 

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