Vinod Kumar Sharma Vs ITO (ITAT Jaipur)
Agricultural Savings Explain Land Investment: ITAT Deletes ₹11 Lakh Addition
Introduction
The Income Tax Appellate Tribunal, Jaipur Bench, deleted an addition of ₹11 lakh towards unexplained investment in agricultural land, holding that the assessee had sufficiently established the source through accumulated agricultural income of his joint family.
The Tribunal considered an irrigation certificate, electricity bills and affidavits explaining the family’s agricultural activities and earnings. It noted that the Revenue had neither identified defects in these documents nor investigated the factual assertions to disprove them.
On the particular facts, the Bench held that demanding further records of every agricultural activity from an agriculturist living in a backward rural area was excessive when the evidence already furnished adequately explained the investment.
Background of the Case
The Department reopened the assessee’s case after receiving information that he had purchased agricultural land for ₹25 lakh, with registration recorded in March 2014. A part payment of ₹11 lakh was made during the year relevant to Assessment Year 2015-16.
The assessee had declared income of ₹2,69,380 in his return. During reassessment, the Assessing Officer found that the source of the ₹11 lakh investment had not been adequately explained and added that amount to the assessee’s income.
The CIT(A), National Faceless Appeal Centre, upheld the addition through an order dated 17 November 2025.
The assessee approached the Tribunal, challenging both the reassessment proceedings and the addition. However, the ground questioning reopening was not pressed and was dismissed accordingly. The substantive adjudication concerned the source of the investment.
Assessee’s Explanation and Evidence
The assessee consistently explained that the investment came from accumulated funds of his joint family, whose members were engaged together in agricultural operations.
He stated that he lived in a small village in Dausa district, Rajasthan, where banking facilities were unavailable nearby. His explanation therefore had to be considered in the context of the family’s rural circumstances and agricultural livelihood.
To support his case, the assessee furnished a Sinchai Praman Patra, or irrigation certificate. He relied on it to demonstrate that his family, including his father and other family members, jointly undertook agricultural operations on 60 bighas of land.
He also submitted electricity bills relating to the irrigation well. Further, affidavits from the assessee and his father stated that the family had earned approximately ₹55 lakh over the preceding eight years.
The Tribunal additionally noted that the assessee had declared agricultural income of ₹2,69,380 for the relevant year.
Revenue’s Objections
The Revenue considered the evidence insufficient. It objected that the assessee had not furnished adequate documents establishing ownership or controlling possession of agricultural land.
The authorities also sought details and records concerning crops cultivated, land preparation, agricultural inputs, harvesting, post-harvest operations, transportation and sale of produce.
The CIT(A) therefore declined to accept the explanation based on the irrigation certificate and other material submitted.
Before the Tribunal, the Revenue maintained that the claimed source of investment lacked adequate evidentiary support.
Tribunal’s Findings
The Tribunal found that the irrigation certificate sufficiently established agricultural operations on 60 bighas by the assessee and his father’s joint family. The electricity bills strengthened that explanation by supporting the use of irrigation facilities.
Importantly, the Revenue had not alleged that the irrigation certificate was false. Nor had it disputed that the certificate referred to the land being irrigated by the assessee and his family.
The Bench considered these documents together with the affidavits and the agricultural income declared in the return. Collectively, they supported the explanation that the assessee had earned agricultural income over several years.
The Revenue had also not disputed the affidavit’s assertion of ₹55 lakh in agricultural earnings over eight years. No inquiry or investigation had been undertaken to disprove that statement.
Further Evidence Was Unnecessary on These Facts
The Tribunal assessed the documentary requirements against the assessee’s background as an agriculturist living in a backward rural area.
It observed that expecting him to retain extensive documents for agricultural activities was asking too much in the circumstances. The additional records sought by the Revenue were supplementary to evidence already furnished.
The Bench held that, unless the existing evidence was discredited, further documents were unnecessary to establish the agricultural earnings relied upon for the investment.
This conclusion arose from the combined evidence and the Revenue’s failure to rebut it; it was not a general exemption from substantiating agricultural income.
Decision and Significance
The Tribunal held that the source of the ₹11 lakh investment was sufficiently established and directed deletion of the addition. The appeal was allowed, while the reopening challenge remained dismissed as not pressed.
The decision highlights the importance of evaluating evidence collectively and in its factual setting. Here, undisputed irrigation records, electricity bills and affidavits adequately supported accumulated agricultural income sufficient for the land investment.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER
The present appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”), dated 17.11.2025 under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
2. The grounds raised by the assessee read as under:-
1. That the Ld. CIT(A), NFAC has grossly erred in upholding the validity of re-assessment proceedings initiated by issuing notice under section 148. That the Ld. CIT(A) has failed to appreciate the fact that the Assessing Officer has not brought on record escapement of income which is essential ingredient for initiation of re-assessment proceedings under section 147. That the authorities below have denied the claim of cash transactions despite assesse having repeated stated that there was absence of banking facility in the village of the assesse and therefore it was not possible to do transactions through banking channels. This claim of the assessee of absence of banking facility in the village of the assesse had not been rebutted by either of the authorities below. That the authorities below have made and sustained the additions despite there being evidence of irrigation of land which proves that agricultural activities had been carried on at land owned by the family of the assessee.
2. That the facts of income from dairy and agricultural activities have not been rebutted by the authorities below and therefore additions made by the Assessing Officer and sustained by the CIT(A), NFAC does not hold ground. That the authorities below have not rebutted the affidavits submitted by Chiranjilal Govind Narayan Joshi and Vinod Kumar Chiranjilal Sharma. It is settled position of law that unrebutted affidavitare accepted evidence in favour of the assessee. That the CIT(A) has grossly erred in sustaining addition of RS. 11,00,000/- /1264910/- made under section 69 by treating the payment for purchase of land as unexplained investment.
3. The solitary issue in the present appeal relates to the addition made to the income of the assessee on account of investment made in purchase of land to the tune of Rs.11,00,000/-, the source of which remained unexplained.
4. The case of the assessee was reopened by issuing notice u/s 148 of the Act on the AO coming in possession of information that the assessee had purchased agricultural land for Rs.25 lakhs, which was registered after payment of stamp duty during on 14/15-03-2014 and part payment for the purchase of this property, of Rs.11 lakhs, was made during the impugned assessment year. The assessee was found to have declared income in his return of income filed for the impugned assessment year of Rs.2,69,380/-. Thereafter assessment was framed u/s 147 of the Act and finding the assessee to have not adequately explained the source of investment in land, addition of Rs.11 lakhs was made to the income of the assessee. The same was confirmed by the Ld. CIT(A).
5. Ground No.1 raised before us has not been pressed. The same is therefore dismissed as not pressed.
6. Ground No.2 raised by the assessee challenges the confirmation of addition made of Rs.11 lakhs by the Ld. CIT(A).
7. We have heard both the parties. The consistent explanation of the assessee to the Lower Authorities regarding the source of investment in land is that it was out of the accumulated fund of his family, all of whom together were involved in agricultural operations.
8. The case of the Revenue however, is that the explanation of the assessee is not supported with adequate evidences.
9. The orders of the authorities below reveal that the assessee had explained that he was residing in a combined family and undertook agricultural operations. The assessee had stated to reside in an economical backward place i.e. small village in District Dausa Rajasthan, where no banking facilities were available in vicinity of his village. The assessee had stated his major source of income to be agriculture, which he had evidenced by furnishing the following:-
- Sinchai praman patra i.e. Irrigation certificate, to prove that the assessee and his father resided together and earned their livelihood with the co-owners of agricultural land (who are brothers of father of assessee and assessee). The assessee referred to this document to prove that the families of the assessee and brothers had been living jointly with their family members i.e. father and his brothers and that the investment had been made out of the combined accumulated fund of the family, which included all the brothers of the father and the assessee. This irrigation certificate was also referred to demonstrate that the assessee and his family held 60 bighas of agricultural land.
- The assessee also furnished electricity bills of sinchai kunwa to support his contention of being a mere agriculturalist.
- Besides this, the assessee had filed his own affidavit and his father’s affidavit stating that in the last 8 years, the family had earned estimated income of Rs.55 lakhs.
9.1. Copies of all the above documents were also placed before us atpaper book page Nos.1 to 5.
10. In the return of income filed for the impugned year also, the assessee had returned agricultural income to the tune of Rs.2,69,380/-.
11. The Revenue Authorities have found no infirmity in any of the documents submitted by the assessee as above. The case of the Revenue, to discard the assessee’s explanation, is that the assessee had furnished no documentary evidence to prove that he was the owner of agricultural land, had furnished no details of crops cultivated, no evidence to prove that he had undertaken agricultural operations, no documentary evidence of harvesting, post-harvesting activities and transportation of agricultural products. The findings of the Ld. CIT(A) in this regard are contained at para 5.7 of his order as under:-
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5.7 However, it is found that the assessee has only submitted solitary document to show that the assessee has some agricultural land in the form of irrigation certificate. Apart from this, the assessee has not submitted any documentary evidence to support its claim of ownership of agricultural land and cultivation of such agricultural land. The assessee has not submitted any documentary evidence that the assessee was in controlling possession of any agricultural land along with explanation and record of rights. The assessee has also not submitted the details of the cultivation of crops and notice of agricultural crops. The assessee failed to submit any documentary evidences to prove that the assessee has taken agriculture corporations like pre-germination operations, preparation of land, germination operations, harvesting, post harvesting, use of agricultural inputs like crop seeds, fertilisers, pesticides, weedicides, et cetera. The assessee has also not submitted any documentary evidence of harvesting and post harvesting activities and transportation of agriculture produce. The assessee could not submit any documentary evidence pertaining to the sale of agriculture produce.
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12. Considering the fact that the assessee is purely an agriculturalist living in a small village of Rajasthan in Dausa, had furnished evidence of the irrigation certificate proving the fact that he along with his joint family of his father were undertaking irrigation operations on agricultural land of 60 bighas and had also furnished electricity bill in this regard, all of which has not been disputed by the Revenue, there is no doubt that the assessee had proven with documentary evidence that he was involved in carrying out agricultural activities. It is not the case ofthe Revenue that the irrigation certificate was false, it is neither the case ofthe Revenue that the irrigation certificate did not mention the fact of 60 bighas of land being irrigated by the assessee along with the joint family of his father.
13. Therefore, the irrigation certificate sufficiently established the fact of the assessee along with joint family of his father carrying out agricultural operations on 60 bighas of land. This is further strengthened by the electricity bills submitted by the assessee proving the use of irrigation facilities on his agricultural land. The assessee had further filed an affidavit both of his father and himself stating to have earned Rs.55 lakhs of agricultural income in the last 8 years. He has filed return of income declaring income of Rs.2,69,380/-. All the above evidence together sufficiently substantiate the assessee’s explanation of being an agriculturalist for the past several years including the impugned year and earning agricultural income year-to-year.
14. The Revenue has not disputed the facts stated by the assessee in his affidavit of having earned agricultural income for the past 8 years of Rs.55 lakhs. No inquiry or investigation has been carried out by the Revenue to disprove the facts stated by the assessee as above.
15. The assessee being an agriculturist ,living in a back ward area, it is asking for too much for him to have and retain documentary evidences of having carried out agricultural activities.In the facts of the present case , considering the back ground of the assessee, the evidences furnished , we hold, sufficiently substantiate his explanation of having earned agricultural income for the past 8 years and even in the impugned year, sufficient enough for making investments of Rs.11 lakhs in the purchase of immovable property during the year. The evidences, which the Revenue has found lacking are mere add on to evidences already furnished by the assessee and until and unless the Revenue discards the evidences already furnished by the assessee, there is no need for any further evidences to be produced by the assessee to prove his case having earned agricultural income for investing in the land property.
16. In the light of the above, and considering the facts and circumstances of the case before us, we hold that the source of investment of Rs.11 lakhs in agricultural land during the impugned year is sufficiently established by the assessee. The addition therefore made to the income of the assessee by the Revenue treating the same as from unexplained sources is directed to be deleted.
17. In effect, the appeal of the assessee is allowed.
Order pronounced in the Open Court on 26.10.2026
