2018 (10) TMI 804 - AT - Income Tax

Addition u/s 68 - AO treating the agricultural income as non agricultural income and invoking the provisions of section 68 - Held that - Referring to assessee s own case for the assessment year 2009-2010 findings of the Assessing Officer was never dispelled by the assessee by placing contra evidence. Admittedly, the assessee was never the owner of the agricultural properties from where it is claimed that he was in receipt of agricultural income of ₹ 12,36,000. The assessee did not produce any documentary evidence to prove that he was in receipt of any agricultural income on account of any agricultural operation carried out by him. Therefore, we are of the view that the Income-tax Authorities have correctly held that the assessee was not in receipt of ₹ 12,36,000 as agricultural income. Having held ₹ 12,36,000 as not agricultural income, the sum that is credited to the book of account has to be necessarily added as income from other sources u/s 68 of the I.T.Act. Therefore, we see no reason to interfere with the order of the CIT(A) and we confirm the same - decided against assessee.

Summary

Issues:
1. Treatment of agricultural income as non-agricultural income and invoking section 68.
2. Whether income earned was agricultural and tantamount to income by overriding title.
3. Taxation of income in the hands of relevant owners instead of the appellant.
4. Taxing receipts as non-agricultural income based on ownership.

Issue 1: Treatment of Agricultural Income:
The appellant's appeal contested the treatment of agricultural income as non-agricultural income under section 68 by the Assessing Officer. The Assessing Officer, in the assessment for the year 2011-2012, taxed the agricultural income of &8377; 11,71,000 as income from other sources. The CIT(A) upheld this addition. The appellant argued that the income was indeed agricultural and should not have been treated as non-agricultural income.

Issue 2: Nature of Income Earned:
The appellant claimed that the income earned was agricultural and should be considered income by overriding title. The appellant contended that even if they were not the owner of the properties, the income should not have been taxed as non-agricultural income. The appellant emphasized that the income derived was from agricultural operations and should be treated as such.

Issue 3: Taxation in the Hands of Relevant Owners:
The appellant raised a point that if they were not entitled to the agricultural income, it should have been taxed in the hands of the relevant owners and not in their hands under other sources. The argument centered around the ownership of the properties from which the income was generated and the allocation of tax liability based on ownership rights.

Issue 4: Taxing Receipts Based on Ownership:
The appellant contended that merely not being the owner of the properties should not enable the officer to tax the receipts as non-agricultural income. The appellant highlighted the importance of ownership rights in determining the tax treatment of income and argued against the taxation of receipts solely based on ownership status.

In the detailed analysis, the Tribunal referred to a similar issue in the appellant's own case for the assessment year 2009-2010. The Tribunal had decided in favor of the Revenue in that case, dismissing the appeal of the assessee. The Tribunal's findings emphasized that the appellant did not provide sufficient evidence to prove ownership of the agricultural properties or receipt of agricultural income. As the appellant failed to substantiate their claim with documentary evidence, the Tribunal confirmed the addition of the sum as income from other sources under section 68 of the Income Tax Act.

Based on the precedent set in the appellant's previous case and the lack of evidence presented to establish ownership or receipt of agricultural income, the Tribunal upheld the Income-tax Authorities' decision to add the sum as income from other sources. The Tribunal concluded that the appellant was not entitled to the agricultural income based on the evidence provided and confirmed the dismissal of the appeal.