2012 (8) TMI 588 - AT - Income Tax

Rejecting the claim of agricultural income - Held that - Exactly for this reason the ITAT earlier has set aside the assessment specifically directing the AO to examine the MRO and the person responsible for maintaining the Adangal register and thereafter decide the issue after giving an opportunity of cross examination to the assessee but the ITAT s direction has not been complied - AO ignored the assessee s submission of certified true copy of the revenue records (pahani) which clearly proves ownership of land in the name of assessee - also the copy of sale deed reveals that the assessee had purchased the land with standing crop and mandava evidencing that the assessee was having some income from agriculture - restore the assessment back to the file of the AO to examine the MRO or the person maintaining Adangal register - in favour of assessee for statistical purpose.

Summary

Issues:
- Assessment of agricultural income for assessment years 1997-98 and 1999-2000.

Analysis:
The judgment by the Appellate Tribunal ITAT, Hyderabad pertains to four appeals filed by two different assessees against orders of CIT (A)-V, Hyderabad for assessment years 1997-98 and 1999-2000. The appeals were clubbed together due to common and identical issues. The focus was on the assessment of agricultural income. In the specific case related to the assessment year 1997-98, the assessee disclosed total income in the return, but the assessment order determined a higher income, leading to an appeal. The ITAT had earlier set aside the assessment, directing the AO to re-examine certain individuals and documents related to the agricultural income claim.

In the subsequent reassessment proceedings, the AO summoned Tahsildars for information regarding the agricultural land in question. However, the Tahsildars did not appear, citing official work dislocation. The assessee provided documents supporting ownership of the land and cultivation activities, including the purchase of land with standing crop and borewells for cultivation. The AO rejected the claim of agricultural income based on information from the Tahsildar's office, adding it as income from other sources. The CIT (A) upheld this decision, stating that the land was not suitable for certain crops like seedless grapes and vegetables.

The ITAT analyzed the evidence and submissions, noting that the claim of agricultural income was disputed despite evidence of land ownership and cultivation activities. The ITAT found fault with the AO for not examining crucial individuals as directed earlier. The Tribunal highlighted that while the agricultural income claim might not be entirely acceptable, it could not be disregarded completely. The CIT (A) was criticized for not considering this aspect and merely adopting the AO's findings. The ITAT decided to send the assessment back to the AO for a detailed inquiry, emphasizing the examination of key individuals and providing the assessee with a chance for cross-examination.

Ultimately, the ITAT allowed all appeals for statistical purposes, emphasizing the need for a thorough examination and proper assessment of the agricultural income claim. The judgment was pronounced on 25-06-2012.