Case Law Details
Lalit Kumar Vs ITO (ITAT Chandigarh)
In the recent case of Lalit Kumar Vs ITO, the Income Tax Appellate Tribunal (ITAT) Chandigarh made a notable ruling regarding the classification of agricultural income. The tribunal overruled the earlier classification of an assessee’s agricultural income as income from undisclosed sources and deleted the addition accordingly.
Lalit Kumar, the appellant, had declared agricultural income of Rs. 2,50,000/- during the tax year 2011-2012. The lower authorities, however, reclassified this income as income from undisclosed sources because the land was officially registered in the name of Lalit Kumar’s father, not the appellant.
The crux of the matter was the ownership of the land. The Assessing Officer believed that the agricultural income should have been reported under the owner of the land’s name. The CIT(A) later confirmed this decision.
However, ITAT Chandigarh overturned this decision, stating that the ownership of the land did not determine the generation of agricultural income. It upheld the argument that even leased land could generate agricultural income and that the assessee, in this case, had tilled and cultivated the land to earn the agricultural income.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The present appeal has been preferred by the assessee against the order dated 31.01.2023 of the Commissioner of Income Tax (Appeals)/NFAC, Delhi [in short ‘CIT(A)’] pertaining to 2011-12 assessment year.
2. The sole issue raised by the assessee in this appeal is relating to addition made by the lower authorities of Rs.2,50,000/- by treating the agriculture income shown by the assessee as income from undisclosed sources.
3. The brief facts are that the assessee during the year claimed agriculture income of Rs.2,50,000/-. When asked to prove the aforesaid agriculture income, the assessee submitted the necessary documents such as copy of Jamabandi, Kisan Pass Book and other documents. However, the aforesaid claim of agriculture income has been denied solely on the ground that the land in question was standing in the name of the father of the assessee namely Shri Diwan Chand. The Assessing Officer (in short ‘the AO’) observed that the agriculture income could have been assessed in the name of the owner of the land and not in the name of the assessee.
4. The ld. CIT(A) confirmed the addition so made by the AO.
5. The ld. Counsel for the assessee has submitted that, merely because the land was standing in the name of the father of the assessee, that does not mean that the assessee did not have the aforesaid agriculture income. That it is not necessary that for claiming agriculture income, land must be in the name of the agriculturist. Even the land can be taken on lease also. He has further submitted that in this case the land was standing in the name of the father of the assessee. The father of the assessee has not booked any extra agriculture income. The assessee tilled the land and got the agriculture income. The agriculture property and cultivation thereupon has not been denied.
6. Considering the above submissions of the ld. Counsel for the assessee, I do not find justification on the part of the lower authorities in making the impugned addition and same is, accordingly, ordered to be deleted.
7. In the result, the appeal of the assessee stands allowed.
Order pronounced on 30th May, 2023.
