Agricultural income claim upheld where untested third-party statements were unreliable and supporting sale evidence corroborated crop receipts.

Receipts from sale of Prosopis Juliflora crop grown on the assessee's land were treated as agricultural income under section 2(1A) of the Income-tax Act because the revenue's evidence was insufficient to displace the claim. The seed dealer's statement was found unreliable due to inconsistencies, and the assessee was not given a fair opportunity to cross-examine that witness. Supporting sale records and other material corroborated the crop sale, so adverse inference could not be drawn merely from doubts about the dealer's version or the revenue's view of how the crop was grown. The receipts were held not to be income from other sources.

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Issues: Whether the receipts from sale of Prosopis Juliflora crop grown on the assessee's land constituted agricultural income under section 2(1A) of the Income-tax Act, 1961.

Analysis: The evidence relied upon by the revenue was found insufficient to dislodge the assessee's claim. The statement of the seed dealer was treated as unreliable because it was inconsistent and the assessee was not afforded effective opportunity to test that statement by cross-examination. The record also contained sale details and other supporting material showing that the assessee had sold the crop. In these circumstances, adverse inference could not be drawn merely from doubts about the dealer's statement or from the revenue's view of the manner in which the crop was grown.

Conclusion: The receipts were held to be agricultural income and not income from other sources.

Ratio Decidendi: An assessee's claim to agricultural income cannot be rejected solely on an untested and unreliable third-party statement when the surrounding evidence supports the claim and the assessee has not been given a fair opportunity to cross-examine the witness.

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