2021 (1) TMI 237 - AT - Income Tax

Undisclosed income - Assessee failed to produce details of total sale proceeds of the agricultural produce sold and also failed to produce details of expenditure incurred on the agricultural activities - According to the assessee, the assessee has earned about ₹ 32,36,200/- from agricultural income instead of ₹ 52,36,200/- which was wrongly mentioned, due to typographical mistake - HELD THAT - Gross receipt in the year in dispute is ₹ 29,25,000/- and not ₹ 54,36,200/- as claimed by the assessee. CIT(A) has rightly corrected the mistake, but keeping in view of the evidences filed by the assessee and the statement of the Sarpanch of the village alongwith Certificate given by him i.e. Sarpanch and in view of the huge ownership of land by the assessee for which the assessee has produced all the documentary evidences as mentioned in the impugned order, Assessing Officer as well as Ld. CIT(A) made and confirmed the addition in dispute only on estimate basis and disallowed the same on the basis of the documentary evidences rejecting the claim of the assessee which is on the basis of the evidences of the revenue authorities. Hence,addition in dispute has wrongly been made for this year by the revenue authorities without any basis and the same is not sustainable in the eyes of law and is hereby deleted in the interest of justice, by accepting the appeal of the assessee.

Summary

Issues:
Assessment of agricultural income discrepancy and addition made by Assessing Officer, Relief granted by Ld. CIT(A) and appeal before the Tribunal.

Analysis:
The appeal was filed by the Assessee against the order passed by the Ld. CIT(A) in relation to the assessment year 2014-15. The Assessee had initially filed a return of income showing profits and gains from business or profession along with agricultural income. The case was selected for limited scrutiny, and notices were issued to the Assessee. The Assessing Officer made an addition to the total income of the Assessee based on discrepancies in the agricultural income declared. The Assessee contended that there was a typographical mistake in the income declared and provided documentary evidence to support the correct figures. The Ld. CIT(A) partly allowed the appeal, reducing the gross agricultural receipts but still making an addition to the income. The Assessee appealed to the Tribunal against this decision.

During the hearing, the Assessee's counsel argued that the Assessing Officer and Ld. CIT(A) had not considered the documentary evidence provided by the Assessee adequately. The counsel emphasized the ownership of agricultural land and the evidence of cultivation submitted by the Assessee. The counsel requested the Tribunal to accept the return filed by the Assessee and delete the addition made to the income.

On the other hand, the Department representative supported the decisions of the lower authorities, stating that the Assessing Officer had correctly assessed the income based on the evidence submitted by the Assessee. The Department argued that the relief granted by Ld. CIT(A) was sufficient given the lack of evidence provided by the Assessee.

After considering the arguments and reviewing the documentary evidence, the Tribunal found that the gross receipt of the Assessee was lower than initially claimed. However, the Tribunal noted that the Assessing Officer and Ld. CIT(A) had made the addition to the income on an estimate basis without sufficient basis. The Tribunal concluded that the addition was not sustainable in the eyes of the law and deleted the addition in the interest of justice, thereby allowing the Assessee's appeal.

In conclusion, the Tribunal allowed the Assessee's appeal, ruling in favor of the Assessee and deleting the addition made to the income by the revenue authorities.