2015 (11) TMI 1266 - AT - Income Tax

Agricultural income - DR has submitted that the assessee has not filed any details in respect of purchase of seeds, fertilizers, pesticides, details of wages to labours and also submitted that no details were maintained by the assessee - Held that - When the assessee has produced all the details as asked by the Assessing Officer and explained in detail, it is open to the Assessing Officer to disprove the details filed by the assessee. In the present case, the assessee has discharged its onus cast upon it to prove that it has been carried cultivation of paddy, casuarina. The Assessing Officer, without disproving the activities carried by the assessee, simply rejected the explanation without making any inquiry or investigation. If at all the Assessing Officer has doubted the certificate issued by the Village Administrative 2Officer, the Assessing Officer having every power to examine him under section 131 of the Act. The Assessing Officer has not done any positive ac to disprove the facts submitted by the assessee. Under these facts and circumstances,the income earned by the assessee is an agricultural income and accordingly, the same is exempt under the Income Tax Act. - Decided in favour of assessee.

Summary

Issues involved:
Assessment of agricultural income for exemption under the Income Tax Act, 1961 based on details provided by the assessee.

Analysis:

Issue 1: Assessment of agricultural income for exemption
The assessee, a company, declared Nil income for the assessment year 2005-06, claiming exemption under the Income Tax Act for income earned through agriculture. The Assessing Officer requested details regarding the cultivation activities, yield, sale proceeds, and ownership of cultivable land. The assessee provided information on owning 40.43 acres of land, cultivating paddy and casuarina, and selling the produce. However, the Assessing Officer was unsatisfied, requesting further proof like land revenue records and details of expenses incurred. The Assessing Officer denied the exemption claimed by the assessee as agricultural income. On appeal, the CIT(A) upheld the Assessing Officer's decision. The Tribunal considered the evidence presented by the assessee, including land ownership documents, crop details, and weigh bridge slips for sale transactions. The Tribunal noted that the Assessing Officer did not disprove the activities carried out by the assessee and rejected the explanation without proper inquiry. The Tribunal found that the assessee had fulfilled its burden of proof, concluding that the income earned was agricultural and therefore exempt under the Income Tax Act. The appeal was allowed, granting the assessee relief.

Issue 2: Commonality of issues in multiple appeals
The Tribunal consolidated four appeals by different assessees against similar orders from the CIT(A) for the sake of convenience. The issues raised in these appeals were identical, involving the assessment of agricultural income for exemption based on the evidence provided by the assessees. Following the decision in the first appeal, the Tribunal allowed the appeals of the other assessees as well, as the facts and circumstances were similar. Consequently, all appeals were allowed, providing relief to the assessees.

In conclusion, the Tribunal's judgment focused on the assessment of agricultural income for exemption under the Income Tax Act, emphasizing the importance of providing sufficient evidence to support the claim. The decision highlighted the Assessing Officer's duty to thoroughly investigate and disprove the details submitted by the assessee before denying the claimed exemption. The Tribunal's thorough analysis and consideration of the evidence resulted in the allowance of all appeals, providing a favorable outcome for the assessees.