Kangayam Chennpalanisamy Vs ITO (ITAT Chennai)
No Receipts? No Problem, Says ITAT – When Land & Past Acceptance Prove Agriculture- Consistency Principle Applied – ITAT Chennai Restores Agricultural Income Claim
Assessee appealed against the order of CIT(A), NFAC, Delhi dated 27.03.2025 confirming the disallowance of agricultural income of ₹71,06,500.
During assessment, AO noted that Assessee owned about 10 acres of agricultural land & claimed substantial agricultural income without producing any supporting evidence such as sale receipts, invoices for inputs, or proof of expenditure. Consequently, AO treated the entire claim as non-agricultural income. CIT(A) sustained the disallowance.
Before Tribunal, Assessee contended that similar agricultural income had been accepted in earlier & subsequent years — AYs 2016–17, 2018–19, 2019–20 & 2020–21 — & produced assessment orders evidencing that Department consistently accepted such income, except in AY 2016–17 where only a small adjustment was made for yield difference in sugarcane production.
Assessee emphasized that the ownership & cultivation of agricultural lands were undisputed & that the rejection solely for lack of receipts was unjustified.
ITAT observed that in AY 2016–17, the AO had only reduced the yield rate & accepted agricultural income of ₹54.60 lakh out of ₹69.04 lakh claimed. In AYs 2018–19, 2019–20, & 2020–21, the Department accepted the returned income as filed, including the agricultural income component.
