Transparent Agro Pvt. Ltd. Vs ITO (ITAT Delhi)
Delhi ITAT Upholds Reassessment and Denial of Agricultural Income Exemption; Section 68 Addition Remanded Where Loans Were Opening Balances
The Delhi ITAT upheld the reassessment and additions made in the case of a company claiming substantial exempt agricultural income, holding that the Assessing Officer was justified in reopening the assessments for AYs 2014-15 to 2016-17 based on tangible material gathered during scrutiny of subsequent years, which revealed that the assessee was not carrying on genuine agricultural operations. The Tribunal accepted the Revenue’s finding that the land had been leased to a hotel company, no evidence of agricultural produce, sale bills, transportation records or supporting bank entries had been furnished, and therefore the amounts shown as agricultural income and agricultural rent were rightly assessed as income from other sources. The Tribunal also held that the principle of res judicata does not apply to income-tax proceedings, and acceptance of similar claims in earlier years did not preclude fresh examination. However, for AY 2020-21, while sustaining the denial of exemption for agricultural income, the Tribunal remanded the addition under section 68 in respect of unsecured loans after noting the assessee’s contention, supported by audited financial statements and confirmations, that no fresh loans had been received during the year and the impugned amount represented only opening balances. Holding that this factual aspect required verification, the Tribunal restored the issue to the Assessing Officer with a direction that if no loan was received during the relevant year, no addition under section 68 could be made.
