Rajbala Chaudhry Vs ITO (ITAT Chandigarh)
A Spelling Mistake Cannot Uproot a Eucalyptus Sale — Suspicion Is No Substitute for Enquiry
The Chandigarh Bench of the ITAT has held that agricultural income arising from the sale of eucalyptus trees cannot be treated as “Income from other sources” merely because the sale invoice contains a spelling mistake or the purchaser’s confirmation does not mention its PAN and email address. Once the assessee produces prima facie evidence of the transaction, the AO must conduct an independent enquiry before rejecting it as bogus. The Tribunal’s reasoning centred on the absence of any effective verification from the purchaser under u/s 133(6).
The assessee, Rajbala Chaudhry, had declared agricultural income of ₹38.54 lakh for AY 2018-19. This included sale proceeds of ₹21.81 lakh from eucalyptus trees sold to M/s SKS Contractors. In support of the sale, the assessee furnished the relevant invoice/receipt and a confirmation from the purchaser.
The AO rejected the agricultural income claim. He noticed that the confirmation did not mention the purchaser’s PAN and email address. Further, the purchaser’s name was incorrectly written in the invoice as “SKS Constractions” instead of “SKS Contractors”. The AO also noted that the purchaser was described as a “Government Contractor and Supplier” and entertained doubts as to why such a person would purchase eucalyptus trees. The fact that the sale was made in cash also weighed against the assessee. On the basis of these discrepancies, the AO treated the confirmation as bogus and assessed the entire agricultural income of ₹38.54 lakh under the head “Income from other sources”.
