INCOME TAX ACT, 1961

Section 56

Agricultural income - Genuineness - Assessee having agricultural land -

AO noticed that the assessee had been showing certain agricultural income in each of assessment years in returns of income filed by HUF, but there was no documentary evidence of agricultural land in the name of assessee. Therefore, he held that agricultural income admitted in the status of HUF by all assessment years had to be treated as 'Income from other sources' in the hands of assessee as individual and brought to tax accordingly. CIT(A) held that assessee could not create a status of HUF for the purpose of taxation.Held: The moment a person is born into a family, HUF is created and if land holdings were in joint names of family members, assessee also being part of the HUF, would have a right in income therefrom. Revenue was taking contrary stands. AO had taken the stand that there was no evidence filed in proof of land in the name of HUF and therefore, income had to be treated as 'assessee's individual income under the head 'Income from other sources' while CIT(A) held that assessee was not part of HUF and therefore, income could not be held to be belonging to assessee. The existence of joint family property was recorded by CIT(A) and assessee being member of the joint family, was entitled to his share in property. Once joint family property was established, then on partition, assessee became owner of such share in his individual capacity. In paper book filed by assessee, there were copies of revenue records, wherein name of assessee was recorded as owner of agricultural land in Ramtek. Therefore, it was to be accepted that oral partition, subsequently reduced into writing had been given effect to. Assessee had filed returns in the status of HUF admitting agricultural income in 2012, i.e., after search. Accordingly, there could not be any doubt that assessee or HUF possessed agricultural land. Therefore income from agricultural land was available with assessee to the extent of his share. Therefore, agricultural income offered by assessee had to be accepted and could not be treated as 'Income from other sources.

Relied:Gurucharan Singh v. Kamla Singh and Others 1977 AIR 5 SC.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2001-02 to 2008-09

INCOME TAX ACT, 1961

Section 69

SUBSCRIBE FOR FULL CONTENT