Tattaruparambil Mathew Joseph Vs ITO (ITAT Bangalore)
Reasonable Agricultural Income Cannot Be Denied Altogether- Bangalore ITAT Gives Relief in Rubber Plantation Case, Sends ₹20 Lakh Lease Receipt Back for Verification
The Bangalore ITAT granted partial relief to an assessee whose agricultural income from rubber plantation was treated entirely as “Income from Other Sources” by the AO and NFAC. The Tribunal held that once the ownership of agricultural land and existence of agricultural activities are accepted, the department cannot completely deny agricultural income merely because exhaustive details were not furnished.
The assessee had declared agricultural income of ₹28.12 lakh from 8.01 acres of rural agricultural land containing rubber plantation. The income comprised ₹20 lakh lease receipts from leasing the plantation land for rubber extraction and around ₹8.12 lakh from sale of natural rubber/latex. The AO doubted the sudden increase in agricultural income compared to earlier years and rejected the claim on the ground that proper quantitative details, sale bills, cultivation expenses and supporting evidence were not produced. The AO also questioned the validity of the lease agreement and treated the entire amount as income from other sources.
Before the Tribunal, the assessee produced additional evidence including PAN, Aadhaar and bank details of the lessee to support the ₹20 lakh lease receipt. The ITAT observed that these documents went to the root of the matter and therefore restored the limited issue of lease receipts back to the AO for fresh verification after granting opportunity to the assessee.
However, the Tribunal strongly disagreed with the total rejection of the remaining agricultural income. It noted that the assessee had consistently shown agricultural income in earlier years and the Revenue had not brought any positive material to establish that the receipts arose from non-agricultural activities. The Bench observed that mere suspicion arising from increase in agricultural income cannot justify taxing the entire receipts as non-agricultural income. Accordingly, the ITAT directed the AO to accept agricultural income of ₹8.12 lakh relating to rubber/latex sales and granted partial relief to the assessee.
.FULL TEXT OF THE ORDER OF ITAT BANGALORE
The present appeal has been instituted by the assessee against the order of the NFAC, Delhi passed u/s 250 of the Act dated 08.12.2025 relevant to AY 2020-21.
