ITAT: No Tax on Agricultural Income U/S 148 Deposited by Cash

According to a recent ruling by the Income Tax Appellate Tribunal (ITAT) Amritsar Bench, cash deposits of agricultural income are not taxable.

The assessee’s case was reopened under Section 148 of the Income Tax Act on the basis of reasons recorded after receiving joint commissioner of income tax approval, to sum up, the situation briefly. The appellant is an agriculturalist and has regularly reported agriculture revenue in the income tax forms submitted annually. In the village of Bhangala, the assessee jointly and individually owns more than 20 acres of property.

As the assessee’s total income fell below the set statutory limit for the year in question, the appellant did not file a report of income as required by Section 139(1) of the Income Tax Act.

According to Rohit Kapoor, CA, who spoke on behalf of the assessee, the assertion made in the written submissions was not supported by any evidence that the appellant had produced. In this respect, the attorney claims that the appellant has properly provided Jamabandi, which includes information on the land holdings registered in his or her name and the names of any family members.

Ravinder Mittal, a department official, angrily objected and cited the directives of the revenue authorities.

The Income Tax Appellate Tribunal (ITAT) bench of Judicial Member Anikesh Banerjee and Accountant Member Dr M L Meena noted that “The Jamabandi/Girdawari represents the nature of income of the assessee as an agriculturist. Further, the assessee properly raised the ground related to addition u/s 68 of the Act without maintaining the books of accounts.”

Hence, it was determined that the assessee’s use of Section 68 was uncalled for and that cash deposited by the assessee was agricultural income, which is not taxable income.

“The opening balance of cash was also not considered during the determination of peak by the ld. AO. We set aside the order of revenue authorities. So, the entire addition amount to Rs. 737,948/- is quashed.”