Ishwar Chander Pahuja Vs ACIT (ITAT Delhi)
ITAT Delhi held that agriculturist are not required to maintain books of accounts as provisions of section 44AA of the Income Tax Act. Accordingly, exemption claim u/s. 10(1) allowed.
Facts- During assessment proceedings, AO observed that assessee has shown agricultural income of Rs.23,36,957/- u/s. 2(1A) of the Act and claimed the same as exempt u/s 10(1) of the Act, thus the assessee has claimed tax rebate on agricultural income of Rs.6,01,097/-. AO further observed that assessee has not claimed any expenses for any agricultural income. Because of this, AO was of the opinion that claim of agricultural income appeared doubtful.
In view of the unsatisfactory explanation, the agricultural income declared by the assessee is disallowed and added to the income of the assessee. CIT(A) sustained the addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that the Assessing Officer observed that assessee has not maintained any books of account as per section 44AA of the Act. In my view, assessee’s income falls under section 10(1) of the Act and as per section 44A of the Act, as per the provisions of the Act, who are supposed to maintain books of account, does not include agriculturist. Therefore, assessee’s case does not fall u/s 44AA of the Act. I also observed that the assessee has submitted copy of bills of sale of agricultural produce to various persons, even though to the related parties. In our considered view, considering the agricultural income declared by the assessee over the years, the claim of the assessee is genuine and assessee has submitted that the agricultural expenses were met out of sale of seedlings to farmers is acceptable. If at all required, assessee would have grossed up the sales by including the seedlings sales and claimed the agricultural expenditure.
