There is no statutory requirement for an agriculturist to maintain books of accounts – ITAT
In a recent judgment, the ITAT Allahabad has held that there is no statutory requirement for an agriculturist to maintain books of accounts and the insistence on documentary evidences of the nature required from regular businesses to accept the claim of agricultural income is not justified
ABCAUS Case Law Citation:
4287 (2024) (10) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A), NFAC in inter alia sustaining the addition as income from other sources on account of agricultural income declared in the return of income.
In the income tax return, the assessee had shown a substantial amount towards agricultural income from the sale of Eucalyptus trees claiming the same as exempt. Accordingly, the case was picked for limited scrutiny, for examination of this claim. The Assessing Officer observed that, except for submitting some land details and copies of land records, the assessee had not submitted any details / documentary evidences with regard to his claim of agricultural income.
In spite of giving several opportunities, no documentary evidences had been filed for the claim of agricultural income. Therefore, the AO treated the agricultural income in the return as income from other sources and taxed accordingly.
The Tribunal observed that the Assessing Officer had before him all the details of land holdings including copies of land records. The Assessing Officer had not recorded in his order, the extent of land holdings or the nature of the land held by the assessee but had dismissed the claim of the agricultural income only because the assessee did not submit evidences for receipts, details of expenditure, cash flow statement & bank statement etc,.
The Tribunal observed that there is no statutory requirement for an agriculturist to maintain books of accounts and there is no prohibition on transaction of agriculture produce in cash in the relevant assessment year. The Tribunal opined that in the circumstances, the insistence on documentary evidences of the nature required from regular businesses to accept the claim does not seem to be justified.
The Tribunal further opined that once the assessee had furnished the details of land holdings before the Assessing Officer, the AO was in a position to conduct further enquiries with the Revenue authorities to determine the authenticity of the assessee’s claim.
Accordingly, the Tribunal restored the matter back to the file of the Assessing Officer with a direction to the assessee to produce all evidences that he may have in support of his claim of agricultural income from sale of Eucalyptus trees and directed the Assessing Officer to do a fresh assessment of the assessee’s income, after considering the land records presented before it, other documentary evidences which the assessee may submit and after conducting such further enquiries as the Assessing Officer may deem fit.
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