Question And Answer
Subject: Sale of rural agricultural cash receipt or advace
Querist: Mahesh.M
Answered by:
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Date: March 23, 2022
Query asked by Mahesh.M

Regarding sale of rural agricultural land i want to know cash receipt of any amt could be deposited in Bank. If so or so not y wt is the reason . Y u k not dep cash received on sale of agriculture land as it is not a income according to capital asset or gain.








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Sale of agricultural rural land and cash received from the said sale transaction can be deposited in bank. Assessee is able to explain source of said deposits as well as demonstrate said land is rural agricultural land as per the land revenue records and capital assets fall under section 2(14)(iii), addition was not justified under section 68 even if the assessee deposited advance against the sale of rural land.
In the case of ITO vs. Kulwinder Singh [2018] 169 ITD 577 (Chand)(Trib.) held that assessee showing that amount deposited in savings bank account came from sale of agricultural land and, thus, addition made under section 68 was not sustainable.
Whereas in the case of Jagdish Prasad Sharma v. ITO [2020] 182 ITD 246 (Delhi)(Trib.) held that, where the assessee had deposited cash in its account and explained that sum was received as advance against sale of agricultural land however, failed to show creditworthiness of depositors against sale of land, addition under section 68 was justified.

Burden is on the assessee to prove that the cash deposited was from the sale of agricultural land

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