2024 (7) TMI 1093 - AT - Income Tax

Estimation of income on turnover - AO estimated the same at 15% and according to the assessee it is only at 5% - HELD THAT - There is no evidence to support the claim of the assessee at 5%. Taking a pragmatic view on this matter, the ends of justice would be met if the same is estimated at 8% of the turnover. Therefore, direct the AO to estimate the income of the assessee on real estate business at 8%. Agricultural income - disallowance of agri income as documents produced by the assessee do not bear his name and the show the name of some other persons - HELD THAT - Assessee does not dispute this fact, but on the other hand states that due to the fear of litigation at the instance of the tenants, the landlords are slow in excluding the documents in favour of the tenants and also that the agricultural marketing committees are also not issuing the receipts on the name of the tenants. Though, we cannot brush aside this contention of the assessee, it is difficult that the entire amount of ₹ 5.85 Lacs is derived by the assessee without any document. The disallowance of the total receipt does not seem to be correct and at the same time, having regard to the smallest of amount deem it not proper to send it back for any further verification. Thus, direct the AO to take 40% of the receipt as agricultural income of the assessee. Rest of the addition is upheld. Assessee appeal partly allowed.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Estimation of income for the assessment year 2021-22.
3. Disallowance of agricultural income.

Condonation of Delay:
The assessee filed an appeal with a delay, attributing it to not being aware of the order and not regularly checking emails. The delay was condoned by the tribunal, considering the circumstances and allowing the appeal to be heard on merits.

Estimation of Income:
The assessee, a non-filer of income tax returns, had his income estimated by the Assessing Officer due to lack of material provided. The tribunal reduced the estimated income from 15% to 8% of the turnover for the real estate business. The tribunal noted the lack of evidence to support both the original 15% estimation and the assessee's claim of 5%.

Disallowance of Agricultural Income:
The Assessing Officer disallowed the entire agricultural income due to lack of documents bearing the assessee's name. The tribunal, acknowledging the unique circumstances, directed the Assessing Officer to consider 40% of the receipt as the assessee's agricultural income, upholding the rest of the addition. The tribunal avoided further verification to expedite the resolution of the issue.

In conclusion, the appeal of the assessee was partially allowed by the tribunal, addressing the issues of delay condonation, income estimation, and agricultural income disallowance. The judgment aimed to strike a balance between the interests of the assessee and the requirements of tax assessment, providing a pragmatic resolution to the disputes presented.