INCOME TAX ACT, 1961

Section 2(1A)

Agricultural income - Assessee produced document showing agricultural land - Revenue alleged assessee not having any machinery equipment and other resources required for cultivation of land -

AO treated agricultural income shown by assessee as 'income from other sources' and made an addition of Rs. 32,68,500 on that account. AO alleged that the assessee did not have any machinery equipment and other resources, which were required and essential for cultivation of land. He further alleged that the assessee did not furnish any proof of carrying out agricultural activities by way of purchase of seeds, fertilizers, labour payment etc., and having any kind of agricultural equipment or machinery to cultivate such vast piece of land as claimed. Further, the CIT (A) confirmed the said addition as made by the AO. Held: Assessee produced document showing the agricultural land to the extent of 25.946 hectares. Further, considering past history of the case and facts of the case in the year under consideration, it was fully proved and established that the assessee was engaged in agricultural operations. Thus, the CIT (Appeals) erred in confirming the finding of the AO that the assessee was not engaged in large-scale agricultural operation. Further, as the agricultural income regularly shown by the assessee in earlier years was accepted, the same would be considered in the year under consideration also. Therefore, considering the past history and also the certificate issued by the Horticulture Department, the agriculture income upto Rs. 22,68,500 was accepted and the addition of Rs. 10 lakhs was sustained.

REFERRED :

FAVOUR : Partly in favour of assessee

A.Y. : 2014-15

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