Agricultural income- Evidence- illegal
As per Section 10(1) of the Income Tax Act, 1961, agricultural income is exempted from taxation. The below are the agricultural incomes:-
- Income derived from sale of replanted trees.
- Income from sale of seeds.
- Rent received for agricultural land.
- Income from growing flowers and creepers.
- Profits received from a partner from a firm engaged in agricultural produce or activities
- Interest on capital that a partner from a firm, engaged in agricultural operations, receives.
As where we know that the central government cannot levy tax on the agricultural income received. However, if agricultural income is more than 5000/- then it is considered for calculation for tax purposes while assessing the income tax liability.
Proof of Agriculture Income:-
Exempt agricultural income cannot be accepted in the absence of evidences regarding the performance of agricultural activity or expenditure or sale of the agriculture produce. The above matter can be understood from the below case studies.
ITA No.2003/Mum/2018
Usha Umesh Mishra Vs ITO
Whether claim of exempt agricultural income can be accepted in the absence of evidences regarding the performance of agricultural activity or expenditure or sale of the agriculture produce – NO: ITAT
Assessee’s appeal dismissed: MUMBAI ITAT
Reason/ Comment by Assesses- assesses along with her family members are holding huge amount of land. That they have given the task to a person named Bablu to perform agricultural activity. That the person does all the work and incurs expenditure and after deducting the expense deposits the net receipts in assessee’s bank account.
It was found that this was only a self serving statement. Not an iota of evidence is on record regarding the performance of agricultural activity or expenditure or sale of the agriculture produce.
It was found that CIT(A) had correctly placed reliance upon a catena of case laws. He also referred to ITAT decision in assessee’s own group case wherein such claim of agricultural income was rejected.
ITAT decision finds that after the purchase of land for Rs. 37,30,007/- the assessee has shown return of agricultural income in just two years more than the amount invested in land. The assessee was showing a specific amount of agricultural income but is not giving the details.
It is clearly an unexplained deposit in bank which has been given the garb of agricultural income. Accordingly, assessee’s claim of agricultural income is totally bogus and not at all sustainable in law. In the result, appeal filed by the assessee is dismissed.
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