Agricultural Land Claim Rejected For Lack Of Proof | HC

Case Details: M J George vs. Deputy Commissioner of Income-tax - [2026] 182 taxmann.com 243 (Kerala) 

Judiciary and Counsel Details

• DR. A.K.jayasankaran Nambiar & Easwaran S., JJ.
• Nisha John, Adv. for the Appellant.
• Jose Joseph, SC for the Respondent.

Facts of the Case

The appellant-assessee sold an extent of 5.21 Acres of land at Kakkanad village for Rs.977.10 Lakhs vide registered Sale Deed dated 13.2.2006. He reported the income from the sale of land as agricultural income and claimed it to be exempt from tax. However, the Assessing Officer (AO) rejected the assessee’s claim and taxed the income as capital gains.

The assessee preferred an appeal to the CIT(A), and the CIT(A) granted relief to the assessee. Aggrieved by the order, an appeal was filed to the Tribunal. The Tribunal reversed the order of CIT(A) and confirmed the additions made by the AO. The matter then reached the Kerala High Court.

High Court Held

The High Court held that the assessee did not produce any evidence other than a certificate from the Village Officer that the land in question was agricultural land, which certificate went against the revenue records itself, which pointed to the land being in the nature of ‘Purayidam’, which translates as dry land suitable for the construction of houses.

In addition, the assessee also produced copies of some returns showing that he had returned an amount slightly over Rs. 1 lakh as agricultural income derived from the property over many years prior to the sale of the land. The appellant, however, did not produce any other cogent evidence such as wages paid to agricultural labourers, purchase invoices in respect of manure, fertilizers etc., purchase invoices pertaining to agricultural implements, if any, used in connection with the agricultural operations, the details regarding the source of water for irrigation purposes, etc.

It is on account of the absence of any cogent evidence adduced by the appellant that the appellate tribunal proceeded to hold, based on the evidence on record, that the appellant had not established that the land sold by him was agricultural in nature. The above findings of the appellate tribunal are entirely factual and, in the absence of any evidence adduced by the assessee, cannot be said to be arbitrary or perverse for the purposes of maintaining an appeal under Section 260A of the Income Tax Act.

List of Cases Reviewed

• CIT v. M.J. George IT Appeal No. 525 (Coch) of 2011, dated 31-10-2023 (para 10) affirmed

List of Cases Referred to

• CIT v. M.J. George [IT Appeal No. 117 of 2013, dated 3-7-2015] (para 5).