2019 (9) TMI 190 - AT - Income Tax

Income from other sources - revised return of income filed to reduce the agricultural income - failure to prove large agricultural income - HELD THAT - Assessee has filed revised return of income during assessment proceedings reducing the agricultural income. Though this revised return was not accepted by the assessing officer, but, it would show that assessee has in fact not earned huge agricultural income. The assessee in the earlier year as well as in subsequent years have shown meager agricultural income ranges from ₹ 5 lacs to ₹ 8 lacs only. The assessee did not produce any sufficient documentary evidences before the authorities below to claim huge agricultural income of ₹ 24,78,544/- earned out of small agricultural land holdings. The agreement with Shri Rajesh was executed on 8th June 2017 i.e., after closure of the financial year relevant to assessment year under appeal. Therefore, it is concocted and fabricated by the assessee. Conduct of the assessee in changing stand at different level and claiming lesser agricultural income before the authorities below would clearly show that authorities below were very reasonable in estimating the agricultural income at ₹ 14 lacs, though the assessee claimed lesser amount of the same subsequently. Therefore, authorities below were justified in considering as income from other sources. - Dismiss the appeal of the assessee.

Summary

Issues:
Challenging addition of &8377; 10,78,544/- as income from other sources due to disputed agricultural income estimation.

Analysis:
The appeal was against the order of the Ld. CIT(A) for the assessment year 2015-16, contesting the addition of &8377; 10,78,544/- to the taxable income. The case was scrutinized due to the issue of high agricultural income declared by the assessee, which seemed disproportionate to the actual land ownership. The assessing officer requested details and documents to verify the agricultural income claimed. The assessee initially stated ownership of 48 kanals of land and leasing 96 kanals from family members. However, discrepancies arose during the investigation regarding the actual land ownership and cultivation details.

The assessing officer found inconsistencies in the assessee's claims and revised returns, reducing the agricultural income without valid basis. Previous and subsequent years' agricultural income declarations were significantly lower, raising suspicions about the accuracy of the current claim. The assessing officer estimated agricultural income at &8377; 50,000/- per acre for the 28 acres cultivated, resulting in a total of &8377; 14 lacs. The remaining amount was treated as income from undisclosed sources, leading to the contested addition.

During the appeal, the assessee presented arguments and evidence to support the declared agricultural income, emphasizing the production of Mandi receipts and lease agreements. However, the Tribunal found the explanations insufficient and inconsistent with the financial records and land holdings presented. The Tribunal observed that the revised return and lack of substantial evidence undermined the credibility of the claimed agricultural income. The agreement with Shri Rajesh, executed after the relevant financial year, was deemed fabricated.

Ultimately, the Tribunal upheld the authorities' decision to treat &8377; 10,78,544/- as income from other sources, dismissing the appeal. The Tribunal concluded that the assessing officer's estimation of agricultural income at &8377; 14 lacs was reasonable given the circumstances and the assessee's changing statements. The lack of compelling evidence and the discrepancies in the assessee's submissions led to the rejection of the appeal and the affirmation of the addition to the taxable income.