No Proof, No Exemption – ITAT Remands “Agricultural Income” Claim with Cost

Yohann Kekoo Sethna Vs ITO (ITAT Bangalore)

In the case of Yohann Kekoo Sethna, the Bangalore ITAT dealt with addition of ₹33.12 lakh claimed as agricultural income but treated as unexplained cash credit u/s 68 and taxed u/s 115BBE.

The Assessing Officer made the addition because:

• The assessee failed to furnish basic evidence such as land ownership/lease, crop records, sales details, or books of account.
• The claim of agricultural income remained completely unsubstantiated.

The CIT(A) upheld the addition.

Before ITAT:

• The assessee sought one more opportunity to produce evidence.

The Tribunal observed:

• There was total lack of documentary support at earlier stages.
• However, considering the nature of the claim, factual verification is essential before final taxation.

Accordingly, ITAT:

• Set aside the addition,
• Restored the matter to AO for fresh examination, and
• Directed the assessee to produce complete evidence of agricultural activity.

 At the same time, ITAT imposed a ₹2,000 cost for non-compliance and delay in furnishing evidence.

Agricultural income claims don’t get a free pass-no evidence = taxable income. But ITAT still ensures one fair opportunity before final addition sticks

FULL TEXT OF THE ORDER OF ITAT BANGALORE

This appeal is directed against the order passed by the Commissioner of Income-tax (Appeals), NFAC, Delhi dated 21.11.2025 for Assessment Year 2021–22, wherein the addition of ₹33,12,391 made by the Assessing Officer under section 68 of the Income-tax Act, 1961 and taxed under section 115BBE of the Act was confirmed.

2. The assessee is an individual stated to be engaged in agricultural activities, particularly cultivation of coffee beans. For Assessment Year 2021–22, the assessee filed return of income declaring agricultural income of ₹33,12,391 only. During scrutiny proceedings, the Assessing Officer called upon the assessee to furnish supporting evidence such as land records, proof of cultivation, sale details, crop records, and books of account. The assessee failed to furnish any substantive documentary evidence. The Assessing Officer, finding no supporting material, treated the said amount as unexplained cash credit under section 68 of the Act and brought it to tax under section 115BBE of the Act. The action was confirmed by the CIT(A)/NFAC.

3. Being aggrieved by the order of ld. CIT-A, the assessee is in appeal before us.

4. The ld. AR before us submitted to set aside the issue to the file of the AO for fresh adjudication as per law and undertake the responsibility for making necessary compliance. On the other hand, the ld. DR supported the order of the authorities below.

5. We have considered the submissions and perused the materials available on record. It is an undisputed fact that the assessee has not furnished any supporting evidence such as proof of landholding or lease, evidence of agricultural operations, crop production records, sale or stock movement details, or books of account substantiating the claimed agricultural activity. However, considering the nature of the claim and in the interest of justice, we are of the view that the matter requires factual verification at the level of the Assessing Officer. In the facts and circumstances of the case, we deem it appropriate to restore the matter to the file of the Assessing Officer for fresh adjudication. The AssessingOfficer shall provide reasonable opportunity of being heard to the assessee, allow the assessee to furnish all supporting evidence, and decide the issue afresh in accordance with law, uninfluenced by earlier findings.

5.1 Since the assessee failed to comply with statutory notices and did not furnish basic supporting evidence during assessment and appellate proceedings, we impose a cost of ₹2,000/-, to be deposited by the assessee in the Prime Minister’s National Relief Fund (PMNRF) within a reasonable time. Hence, the ground of appeal of the assessee is partly allowed for statistical purposes.

6. In the result, the appeal is allowed for statistical purposes.

Order pronounced in court on 29^th day of April, 2026