Claim of agricultural income allowed in view of ownership of large land, girdwari and village sarpanch certificate
ABCAUS Case Law Citation
ABCAUS 3436 (2021) (01) ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in part confirming the additions made by the Assessing Officer (AO) arising out of disallowance of agricultural income.
The assessee had filed his return of income under the head “profits and gain from business or profession” alongwith agricultural income. The case of the assessee was selected for limited scrutiny under CASS and notice u/s 143(2) of the Income Tax Income Tax Act, 1961 (the Act) was issued.
The assessee submitted that assessee by typographical mistake claimed the total agricultural income by Rs. 20 lakhs more than the agriculture income actually earned.
The assessee also filed girdwari as evidence of cultivation of land showing the ownership land. Assessee also submitted Form J in support of his produce and sold agricultural which was however less than the corrected figure of agricultural income.
In other words, there were three figures on record with respect to the claim of the agricultural income, i.e.
(a) agricultural income claimed in ITR
(b) revised agricultural income = ( a ) – Rs. 20 lakhs
(c) agricultural income as per form-J
Since the assessee had not submitted any details in respect of expenses incurred for producing the agricultural income the AO he estimated the expenses @ 40% of (c) above and worked out the net agricultural income at (d) which was (c) – 40% of (c).
The AO made addition of the difference between (a) and (d) to the total income of the assessee and completed the assessment u/s 143(3) of the Act.
On appeal, CIT(A) gave minor relief to the assessee by holding that the gross agricultural receipts were Rs. 20 lakhs less than the figure mentioned in ITR. However for the difference between the revised agricultural income at (b) and the net agricultural income worked out by the AO, the CIT(A) was of the view that since the assessee offered no explanation, it would be his undisclosed income.
The Tribunal, in view of the evidences filed by the assessee and the statement of the Sarpanch alongwith Certificate and in view of the huge ownership of land by the assessee opined that the addition was wrongly made by the lower authorities only on estimate basis rejecting the documentary evidences filed by the assessee.
The Tribunal held that addition was not sustainable in the eyes of law and deleted the same while allowing the appeal of in the favour of the assessee.
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