2019 (3) TMI 259 - AT - Income Tax

Agricultural income - assessee could not produce bills and vouchers for sale of agricultural produce - assessee could not establish the fact of cultivation - estimation of coconut yield - evidence available on the land to show that the assessee has cultivated as claimed - HELD THAT - Estimation of yield in agriculture is something difficult and which needs to be appreciated by the authorities who are performing judicial function. When agricultural produce including coconuts is traded in unorganized market like Uzhavar Sandhai and other local market, expecting the assessee to produce bills and vouchers is nothing but asking the assessee to perform an impossible task. Therefore, this Tribunal finds no reason to disallow any claim of the assessee. Had the AO found that the assessee has no land or he has not cultivated as claimed, the matter might have stood in a different foot. In this case, the Assessing Officer accepted the fact that the assessee has cultivated the land. The only reason for disallowance is that the assessee could not produce bills and vouchers for sale of agricultural produce and receipts for expenses. Apart from that, the assessee has established by producing copy of adangal extract that the land in question was subject to cultivation. In those circumstances, this Tribunal is of the considered opinion that there is no reason to disallow any part of claim. - Decided in favour of assessee.

Summary

Issues:
Dispute over agricultural income disclosure and disallowance of claimed amount by Assessing Officer.

Analysis:
The appeal pertains to the assessment year 2015-16 where the assessee disclosed a sum of ?20,00,000 from agriculture, but the Assessing Officer restricted it to ?12,00,000, adding the remaining ?8,00,000 to taxable income. The assessee's counsel argued that cultivation was not disputed, and the disallowance was solely due to lack of bills and vouchers for sale of produce. The counsel provided evidence of cultivation on 22 acres of land with crops like paddy, coconut, and teak. On the other hand, the Departmental Representative contended that in the absence of sales bills, the estimation was reasonable. The Tribunal noted that the assessee's cultivation was established through adangal extract, despite the lack of bills and vouchers.

The Tribunal highlighted the unorganized nature of the agricultural sector where sales often lack formal documentation. It emphasized that the assessee had proven cultivation through official records like the adangal extract, which is crucial in the absence of bills. The judgment stressed that in agriculture, yield estimation is common due to the nature of the sector, and expecting detailed bills for sales is impractical. The Tribunal concluded that since cultivation was proven, and the disallowance was solely due to lack of bills and vouchers, the addition of ?8,00,000 was unjustified. The lower authorities were directed to delete the addition, and the appeal was allowed in favor of the assessee.

This detailed analysis of the judgment showcases the legal intricacies involved in the dispute over agricultural income disclosure and the importance of official records in establishing claims, providing a comprehensive understanding of the Tribunal's decision.