9911796707
TMI Blog2024 (7) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... Income which are exempted u/s 10(1) of the Act would give rise to Total Income chargeable to tax u/s 4(1) of the Act under head Income from Other Sources . We are of the opinion that the question of increasing or decreasing of any agriculture expenditure may become irrelevant if income of the assessee HUF is considered solely agriculture in nature therefore merely by increasing the Agriculture expenditure reducing the exempted Agriculture income will not resulted in Income from other sources automatically unless the AO brought some material on record to show that the assessee HUF earns any other income also. It is also well settled that the AO cannot step into the shoes of an assessee , or question or even sermons to his beleaguered assessees on the conduct of the business. This is more particularly so, when there is nothing in the enacted laws, that requires an assessee to conform to a particular set of business practices. Merely on the basis of some estimation assumption of the AO, increasing of Agriculture expenditure consequently reducing the Agriculture income will not automatically culminate in Income from Other Sources without any material being brought on record to show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timating the agricultural expenditure at a certain percentage of revenue is not a determinative factor as the expenditure will not vary in commensurate with the revenue. 5. On the facts and circumstances of the case, and in the provisions of the law, the Assessing Officer erred in estimating the agricultural expenditure at a higher amount than the amount claimed by the Appellant and then treating/deeming such expenditure as income from other sources as against the fact that in records of the department, there is no information that the Appellant is having income other than the agricultural income for deeming the income from other sources. 6. For these and other reasons which may be adduced at the time of the hearing, this Honourable Bench is requested to delete the addition made by the A.O. As the A.O estimates the expenditure, assuming that the expenditure varies in commensurate with income but it was not so. 7. The Appellant Trust craves leaves to add, to alter, to amend or to delete any other grounds at the time of the hearing. 3. The brief facts of the case are that the assessee being a Hindu Undivided Family (HUF) has been deriving income only from the source of agriculture si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 4,93,850/- corresponding to the high Agricultural income at Rs. 58.16,488/-. Since, the appellant could not explain the low expenses as above, the Assessing Officer after analyzing the yield of agricultural produce of the appellant vis-a-vis corresponding expenditure through different scientific and agricultural data available for the crop pattern observed that in order to harvest the agricultural produce, nearly 48.78% of the corresponding cultivation expertise is required. Further, the Assessing Officer has also analyzed the expenditure of the appellant from subsequent years and found that the appellant has claimed the expenses for the AY 2018-19 at 66 77% and for A.Y. 2019-20 at 29.99%, and arrived at a conclusion that at least 30% of cultivation expense is a reasonable expenditure on the Gross Agricultural income. Therefore, the Assessing Officer computed the agricultural expenses of Rs. 17,44,946/- at 30% of Gross Agricultural income and reduced the Exempt Agricultural Income of the appellant to Rs 40,71,542/-, thereupon, added Rs 12,51,096/- (i.e. Total Expense Rs 17,44,946/- Rs. 493850/-) as taxable income from other sources. The present appeal has been constituted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us, the learned A.R. of the assessee submitted that the assessee is holding 8 acres 27 guntas of agricultural land at Purle Village in Shimoga Taluk of Karnataka State where the assessee is cultivating coffee, pepper, areca nut, coconut, banana and coco. During the course assessment proceedings the assessee has submitted all the sale bills in support of the gross agricultural income and there is no dispute with regard to this. The AO merely on assumption of the facts came to the conclusion that the expenditure claimed by the assessee towards agricultural income is less and estimated 30% based on pure guess and surmises. Further the A.R. of the assessee vehemently submitted that the AO has not brought into record a single evidence to show that the income is earned through other sources of income and the AO should follow rule of consistency as in the earlier years the same were never disputed by the AO. 7. The learned D.R., on the other hand, supported the orders of the authorities below and submitted that on verification of return of income from assessment years 2016-17 to 2018-20 it was seen that expenditure varies from 8.49% to 66.77% which is quite abnormal and, therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted Agriculture income will not resulted in Income from other sources automatically unless the AO brought some material on record to show that the assessee HUF earns any other income also. It is also well settled that the AO cannot step into the shoes of an assessee , or question or even sermons to his beleaguered assessees on the conduct of the business. This is more particularly so, when there is nothing in the enacted laws, that requires an assessee to conform to a particular set of business practices. In our considered view, merely on the basis of some estimation assumption of the AO, increasing of Agriculture expenditure consequently reducing the Agriculture income will not automatically culminate in Income from Other Sources without any material being brought on record to show that agriculture expenses are not genuine or they are understated. AO has merely acted on the basis of surmises and conjuncture in adopting the estimate of 30% of gross agriculture income as Expenditure in connection of agriculture activities without carrying out further verification. In this case we note that both the authorities have failed to discharge their duties properly as none of the parties ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
