2024 (2) TMI 1109 - AT - Income Tax

Addition of agricultural income - Admission of additional evidence to substantiate agriculture activities of assessee - HELD THAT - During the hearing, AR placed on record the surveyors report, wherein the land used for agriculture activities, types of trees, and other activities are mentioned. Accordingly, the learned AR submitted that the land measuring 66.8135 Hector was used for the plantation of mango, cashew, coconut, pineapple, banana, jackfruit, chikoo, jamun, bamboo, and animal feeding plantation. Thus, it is the claim of the assessee that apart from the 7/12 extract the aforesaid surveyors report also justifies the claim of the assessee that an amount of Rs. 22.70 lakh is the agriculture income of the assessee. Since the aforesaid document, now placed as additional evidence, was not considered by any of the lower authorities, therefore, in the interest of justice, we deem it appropriate to restore this issue to the file of the jurisdictional AO for de novo adjudication after consideration of the additional document furnished by the assessee - We also direct the AO to conduct thorough verification/examination of all the aspects pertaining to the claim of income as agricultural income - As a result, ground no. 1 raised in assessee s appeal is allowed for statistical purposes. LTCG - Exemption u/s 54F - claim denied as vacant and peaceful possession of the residential house is not handed over to the assessee as full and final consideration is not paid - During the hearing, in support of the claim that the assessee is the lawful owner of the flat and the share certificate by the Co-operative Housing Society has also been transferred in its name, reference was made to the copy of share certificate issued by Housing Society - HELD THAT - It is evident from the record that the aforesaid documents have not been considered by the lower authorities and the claim of the assessee was rejected u/s 54F on the basis that the assessee is not the owner of the flat. Therefore, in the interest of justice, we deem it appropriate to restore this issue to the file of the jurisdictional AO for de novo adjudication after consideration of all the material as furnished by the assessee. Appeal by the assessee allowed for statistical purposes.

Summary

Issues involved:
The judgment involves issues related to addition of agricultural income, claim of exemption under section 54F of the Income Tax Act, disallowed expenses, and initiation of penalty proceedings under section 271(1)(c).

Addition of Agricultural Income:
The assessee challenged the addition of agricultural income as an undisclosed source. The assessee claimed the income to be exempt under section 10(1) of the Act. The Assessing Officer (AO) disallowed the claim as the supporting documents did not substantiate the agricultural activities and sale of produce. The Appellate Tribunal directed the AO to reexamine the issue considering additional evidence submitted by the assessee, including a surveyors' report, to verify the agricultural income claim thoroughly.

Claim of Exemption under Section 54F:
The assessee claimed exemption under section 54F for investing in a residential house. The AO rejected the claim as the purchase was not completed within the stipulated time frame and full payment was not made. The Appellate Tribunal found that additional evidence, such as share certificate and ledger, supporting the completion of the purchase was not considered by the lower authorities. The issue was remanded to the AO for fresh adjudication after considering all relevant material.

Disallowed Expenses:
The claim for disallowed expenses was dismissed as not pressed during the hearing.

Initiation of Penalty Proceedings:
The issue of penalty proceedings was deemed premature and dismissed.

The appeal by the assessee was partly allowed for statistical purposes, with specific directions given for reevaluation of the agricultural income and exemption claim under section 54F.