2010 (3) TMI 1272 - AT - Income Tax

Summary

Issues Involved:
1. Deletion of addition made u/s 69C of the Act.
2. Deletion of addition made on account of treatment of money received in lieu of agricultural land given on lease.
3. Consistency in assessment across different assessment years.

Summary:

Issue 1: Deletion of addition made u/s 69C of the Act
The Revenue challenged the deletion of an addition of Rs. 6,75,000/- made u/s 69C for unexplained expenditure on an apple orchard. The Assessing Officer (AO) estimated the expenditure based on a recognized scientific formula ratified by Dr. Y.S. Parmar University of Horticulture & Forestry. The assessee failed to furnish detailed expenditure records. The CIT(A) deleted the addition, noting that the AO's estimation was based on surmises and lacked evidence. The CIT(A) emphasized the rule of consistency, as similar income and expenditure were accepted in the previous assessment year 2005-06. The Tribunal upheld the CIT(A)'s order, stating that the AO failed to provide evidence of actual expenditure incurred by the assessee beyond what was claimed. The Tribunal also noted that section 69C applies to actual, not estimated, expenditure.

Issue 2: Deletion of addition made on account of treatment of money received in lieu of agricultural land given on lease
The Revenue contended that the CIT(A) erred in deleting the addition of Rs. 5,00,000/- by treating the lease money as income from other sources instead of agricultural income. The AO argued that the lease agreement specified the land's use for wheat and paddy seed production, and the payment was based on the quality of earth and market rates. The CIT(A) found that the income was consistently treated as agricultural income in previous years and deleted the addition. The Tribunal upheld the CIT(A)'s decision, emphasizing the rule of consistency and lack of evidence to support the AO's claim.

Issue 3: Consistency in assessment across different assessment years
The Revenue argued that the CIT(A) allowed relief based on the acceptance of similar facts in the previous assessment year 2005-06, which was not examined in detail. The Tribunal upheld the CIT(A)'s reliance on the rule of consistency, citing the Supreme Court's decision in CIT v J.K. Charitable Trust, which supports consistency in similar fact situations across different assessment years. The Tribunal found no merit in the AO's rejection of the assessee's explanation for the fall in income and upheld the CIT(A)'s order.

Conclusion:
The Tribunal dismissed the Revenue's appeal, confirming the CIT(A)'s deletion of additions made u/s 69C and on account of lease money treatment, and upheld the rule of consistency in assessment across different years.