ITAT Delhi Allows Partial Agricultural Income Exemption Where Nursery Land Ownership Remained Unproven — Grow More Vs DCIT
Case Overview
The Income Tax Appellate Tribunal, Delhi SMC Bench, rendered its decision in Grow More Vs DCIT, ITA No. 6989/Del/2026, pertaining to Assessment Year 2021-22. The Tribunal partly allowed the assessee's appeal, which had challenged the outright denial of an agricultural income exemption of Rs. 30,98,899 claimed under Section 10(1) of the Income-tax Act, 1961.
The proceedings before the Tribunal originated from the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (CIT(A)/NFAC), Delhi, bearing DIN and Order No. ITBA/NFAC/S/250/2026-27/1088645890(1), dated 27 April 2026. The underlying assessment had been framed under Section 143(3) read with Section 144B of the Income-tax Act, 1961. The Tribunal pronounced its order in open court on 19 August 2026.
Background and Nature of the Dispute
What Was Claimed by the Assessee
The assessee, Grow More, had claimed exemption from income tax in respect of agricultural income amounting to Rs. 30,98,899 under Section 10(1) of the Income-tax Act, 1961. The source of this income was stated to be a plant nursery operated on a parcel of land measuring one bigha, located in the revenue estate of village Khamba, Jodhpur Highway, Tehsil Ahore, Jalore District, Rajasthan.
The assessee further submitted that:
- The land in question formed part of the capital reflected in its balance sheet.
- A functioning plant nursery was being operated from the said land.
- The exemption claim was not a fresh or disputed matter, as the Department had already accepted identical exemption claims for Assessment Years 2022-23 and 2023-24.
Position of the Lower Authorities
Both the Assessing Officer and the CIT(A)/NFAC declined to accept the agricultural income exemption claim in its entirety. The lower authorities were not satisfied with the evidence and submissions placed before them to establish either the ownership of the land or the actual conduct of nursery operations thereon.
Key Legal Issue Before the Tribunal
The central question before the ITAT Delhi SMC Bench was whether the assessee's claim for agricultural income exemption under Section 10(1) of the Income-tax Act, 1961 deserved to be accepted — either fully, partially, or not at all — given:
- The inadequacy of documentary evidence regarding land ownership and nursery activity.
- The precedent set by the Department itself in accepting similar claims for subsequent assessment years.
- Whether a complete denial of the claim was justified in the facts and circumstances of the case.