Burden to Prove Agricultural Use for Section 54B Relief Lies on Assessee | ITAT

Case Details: Income-tax Officer v. Nitinbhai Kanubhai Patel - [2025] 179 taxmann.com 365 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• Ms Suchitra R. Kamble, Judicial Member & Makarand V. Mahadeokar, Accountant Member
• Veerabadram Vislavath, Sr. DR. for the Respondent.

Facts of the Case

The assessee, an individual, sold agricultural land for a substantial consideration. He filed his return of income, declaring agricultural income and claiming a deduction under section 54B. During the reassessment proceedings, the Assessing Officer (AO) disallowed the claim of deduction as the assessee failed to furnish any conclusive evidence of agricultural produce or sales for the period 2015-16.

Furthermore, specific bills submitted by the assessee were undated or pertained to years after the year in question. Unsatisfied with the evidence, AO concluded that no agricultural activity was carried out on the land during the stipulated two years and disallowed the claim of deduction.

Aggrieved-assessee preferred an appeal to the CIT(A). CIT(A) deleted the additions made by AO. Aggrieved-revenue filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that the initial burden of proving eligibility for deduction under Section 54B rests with the assessee. Only when prima facie evidence of agricultural use is furnished does the onus shift to the Department.

In the instant case, the assessee failed to file cogent, verifiable, and contemporaneous records of cultivation during the relevant period. CIT(A) erred in reversing the finding of the AO without recording independent satisfaction that the assessee had indeed discharged this initial burden.

Therefore, the order of CIT(A) was set aside, and the matter was restored to his file with a direction to decide the issue afresh after conducting an independent and comprehensive examination of all relevant evidence.

List of Cases Reviewed

• Commissioner of Wealth-tax v. Officer-in-Charge (Court of Wards) [1976] 105 ITR 133 (SC) (para 5.6) Followed.
• Ashokbhai Kanubhai Patel v. ACIT (IT) [IT Appeal No. 405 (Ahd) of 2020. dated 31-5-2021] (para 5.4) Distinguished.

List of Cases Referred to

• Ashokbhai Kanubhai Patel v. ACIT (IT) [IT Appeal No. 405 (Ahd) of 2020. dated 31-5-2021] (para 2.2)
• Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64/444 ITR 1/286 Taxman 183 (SC) (para 2.3)
• Commissioner of Wealth-tax v. Officer-in-Charge (Court of Wards) [1976] 105 ITR 133 (SC) (para 5.6).