Agricultural income

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Lavitha Shetty

20 Points Posted on 08 November 2019

Hello all

One of my clients accountant filed ITR of my client showing 84lac as receipts from agriculture and 40 lacs as agricultural expenditure. And no other income was shown. My client is a coffee planter having plantation around 22 acres..

His bank accounts do not have major transactions.. It is below 15 lac

And his actual agricultural income do not 10 Lac

Now AO asking for proof for receipts and payments mentioned in itr

Or else same treated as business income and tax shall be paid.

Now how to deal with this.. Kindlys suggest.

Replies (4)

shiva sai

student

20 Points Posted on 08 November 2019

Show the same gross receipts u/s 44AD

provide 8% of gross receipts as profit.

rama krishnan

20 Points Posted on 08 November 2019

Even if you furnish all receipts and payment details, 25% or 40%, as the case may be, is chargeable as business income under rule 7B of income tax rules

Kapadia Pravin

20 Points Posted on 08 November 2019

Income from Growing and Manufacturing of Coffee [Rule 7B]

Income derived from the sale of coffee grown and cured by the seller in India, shall be computed as if it were income derived from business, and 25% of such income shall be deemed to be income liable to tax.

Income derived from the sale of coffee grown, cured, roasted and grounded by the seller in India, with or without mixing chicory or other flavouring ingredients shall be computed as if it were income derived from business, and 40% of such income shall be deemed to be income liable to tax.