2015 (4) TMI 398 - AT - Income Tax

Agricultural income - CIT (Appeals) restricting the addition as the assessee has not maintained separate books of account related to agricultural income and did not furnish any evidence to the satisfaction of the Assessing Officer in support of the claim of expenditure - Held that - As from a perusal of the impugned orders of the CIT (Appeals) that in estimating the assessee's agricultural income for the assessment years in question, the learned CIT (Appeals) has considered the Assessing Officer s estimation and also the fact that other commercial inter crops like pepper, vanilla, plantations, etc. have been cultivated. It is in this context we find that the learned CIT (Appeals) has sustained the additions made by the Assessing Officer to ₹ 1,00,000, ₹ 5,00,000, ₹ 5,00,000 and ₹ 1,00,000 respectively for Assessment Years 2006-07 to 2009-10. In the factual matrix of the case as discussed above, we find that except for raising the grounds challenging the impugned orders of the learned CIT (Appeals) on the issue of estimation of agricultural income, revenue has neither been able to controvert the estimation made by the learned CIT (Appeals) nor to establish with any material evidence that the orders of the Assessing Officer in estimating the agricultural income were factually correct. In this view of the matter, we uphold the impugned orders of the learned CIT (Appeals) on the issue of estimation of agricultural income in the given facts and circumstances of the case - Decided against Revenue.

Issues Involved:
1. Estimation of Agricultural Income.
2. Additions made by the Assessing Officer under Sections 68 and 69 of the Income Tax Act, 1961.
3. Validity of the CIT (Appeals) order granting partial relief to the assessee.
4. Cross Objections by the assessee supporting the CIT (Appeals) order.

Issue-wise Detailed Analysis:

1. Estimation of Agricultural Income:
The primary issue in the appeals was the estimation of agricultural income declared by the assessee for the Assessment Years 2006-07 to 2009-10. The Assessing Officer had brought to tax a part of the agricultural income declared by the assessee as unexplained investment under Section 69 of the Act for three years and as cash credit under Section 68 of the Act for the year 2007-08. The CIT (Appeals) had granted partial relief to the assessee by restricting these additions. The revenue contested this decision, arguing that the CIT (Appeals) had erred in restricting the additions without proper evidence or separate books of account related to agricultural income. The Tribunal, however, upheld the CIT (Appeals) decision, noting that the Assessing Officer's estimation was based only on arecanut and coconut income, ignoring other inter-crops like vanilla, pepper, and banana. The Tribunal found the CIT (Appeals) estimation more reasonable and factually sustainable.

2. Additions made by the Assessing Officer under Sections 68 and 69:
The Assessing Officer had made additions under Sections 68 and 69, treating a part of the agricultural income as unexplained investment and cash credit. The CIT (Appeals) had reduced these additions significantly. The revenue argued that the CIT (Appeals) had not justified the reduction properly. The Tribunal, after reviewing the evidence, including the remand reports and expert opinions, concluded that the Assessing Officer's additions were not supported by material evidence and were based on arbitrary estimates. The Tribunal upheld the CIT (Appeals) decision to restrict the additions.

3. Validity of the CIT (Appeals) order granting partial relief to the assessee:
The revenue challenged the CIT (Appeals) order, claiming it was opposed to law and facts. They argued that the CIT (Appeals) had erred in restricting the additions without proper justification and that the method adopted was inconsistent across different assessment years. The Tribunal, however, found that the CIT (Appeals) had considered all relevant factors, including expert opinions and certificates from horticulture authorities, and had adopted a reasonable approach in estimating the agricultural income. The Tribunal upheld the CIT (Appeals) order, dismissing the revenue's appeals.

4. Cross Objections by the assessee supporting the CIT (Appeals) order:
The assessee had filed cross objections supporting the CIT (Appeals) order. Since the Tribunal upheld the CIT (Appeals) order, the cross objections were rendered infructuous. The Tribunal dismissed the cross objections as infructuous.

Conclusion:
The Tribunal dismissed both the revenue's appeals and the assessee's cross objections for the Assessment Years 2006-07 to 2009-10, upholding the CIT (Appeals) order granting partial relief to the assessee. The Tribunal found the CIT (Appeals) estimation of agricultural income reasonable and factually sustainable, and the Assessing Officer's additions under Sections 68 and 69 were not supported by material evidence.

← Previous Next →