REGIS INDUSTRIES LIMITED,KOLKATA vs. ITO, WARD 3(1), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.248/KOL/2026 Assessment Year:(2018-19) Regis Industries Limited, ITO, 2, Barretto Lane, Kolkata - 700069 Vs. Ward – 3(1), Kolkata [PAN: AABCB1368G] (Appellant) .. (Respondent) Appellant by : Shri Abhishek Bansal, FCA Respondent by: Shri Praveen Das Chowdhury, Sr. DR Date of Hearing 23.07.2026 Date of Pronouncement 01.09.2026 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: This appeal preferred by the assessee against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi(hereinafter referred to as the “ld.CIT(A)”], dated 14.07.2025 for Assessment Year (AY) 2018-19.

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO auto-deleted. When it came to know about the penalty notice u/s 271AAC(1) of the Act, the assessee downloaded the dismissal order and immediately consulted with a new tax consultant. The learned Authorized Representative (ld. AR) requested that the delay was neither intentional nor deliberate but due to the circumstances beyond its control. The ld. AR prayed that the delay may be condoned in the interests of justice. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) opposed the prayer of ld. AR and submitted that assessee has not given sufficient cause/ reason to condone the delay. After hearing the rival submissions of both parties, we condone the delay and admit the appeal for adjudication.

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO expenses. The AO noted that assessee has claimed exemption of agricultural income of Rs.80,27,500/- and accordingly, the assessee was required to submit details thereof. The AO noted that in the return filed during the A.Y. 2017-18, 2616.947 metric tons of onion was shown at a value of Rs.2,61,69,470/-. The AO noted that assessee has taken an agricultural land on lease for Rs.70,000/- only and grown such quantity of onion in the said land. Finally, the AO added the same to the income of assessee on the ground that assessee failed to establish an agricultural income by furnishing evidences in the assessment framed u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Act, dated 31.01.2021.

“In the instant case, the following facts emerge from primary documentary evidence, the whole of which was filed before the Ld. AO and none of which has been controverted by any enquiry, summons or cross-examination: (a) The Appellant took 35 acres of agricultural land on lease from M/s BSP Infrastructure and Construction Limited by a lease deed executed on 04.04.2016, (under Khata No. 2298/636, Plot Nos. 6589/8764, 6622/8265, 6590/8766 and 4180, at MauzaKharasahapur, P.S. Soro, ZillaSoro, District Balasore, Odisha, registered with the Sub-Registrar, Soro, Balasore) (b) The lease is expressly for a period of 12 months. The lease charge is Rs.2,000/- per acre per annum, and one year's charge, being Rs.70,000/-, was paid as a non-refundable advance at the time of signing (Clauses 1 and 2). (c) Clause 7 of the lease agreement conveys to the Appellant the exclusive right to carry out farming, farm produce handling and processing on the said

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO land, and the sale of the farm produce as it is or after processing, with liberty to erect structures commensurate with farming. Clause 6 records that the Appellant 'is, by status, a Leased Farmer on the land'. (d) Clause 3 of the lease agreement casts upon the Appellant the water charges, labour charges and all other charges incurred as a result of the direct farming activities carried out by it on the said land. Clause 4 casts the land revenue, local body tax, government taxes, land rates and fees upon the lessor alone, with no deduction from the Appellant. (e) The recital to the Lease Agreement records that the lessor is the absolute owner of the scheduled land, having purchased it on or about 19.02.2013, and a photocopy of the Sale Deed was annexed to and formed part of the Lease Agreement. (f) The Memorandum of Association of the Appellant expressly permits agricultural activity under its 'Other Objects', and a complete copy of the MOA/AOA was placed before the Ld. AO. (g) The onion crop was raised in F.Y. 2016-17. The month-wise cultivation statement for April 2016 to March 2017 aggregates Rs. 1,69,90,204.51 and comprises land dressing and raking (4,113.88 mandays @ Rs. 400/-), matured saplings (880 cartons @Rs. 300/-), soil sterilization by neem cake, mud cake and ash (2,17,000 sq. ft. @ Rs. 5/-), farm yard manure (2,400 M.T.), vermicompost (48 M.T.), N-P-K fertilisers and micronutrients, plant protection chemicals (Dithane M, Metasystox and Karathane), a farm manager, two head supervisors and fifteen supervisors over a twelve-month cycle, mess charges, local conveyance, labour for the twelve-month cycle (Rs. 15,82,400/-), transportation and carriage inwards, 55,000 reused gunny bags, cutting and hand tools, land rent of Rs. 70,000/-, ten sets of water pump with diesel engine and accessories on rent, diesel for the water pump (Rs. 7,67,756/-) and commission payable. (h) The harvested produce of 2,616.947 metric tonns was carried as opening stock of onions valued at Rs. 1,69,90,000/- as on 01.04.2017, being the cost of cultivation, and was so reflected in the audited financial statements for F.Y. 2016-17 and F.Y. 2017-18 laid before the shareholders at the 36th Annual General Meeting and filed with the Registrar of Companies. (i) The entire quantity of 2,616.947 M.T. was sold during F.Y. 2017-18 at Rs. 10,000/-per M.T. for Rs. 2,61,69,470/- to M/s PinakiRoychowdhury having office at 152/153, Peary Mohan Roy Road, Chetla, Kolkata, under a marketing agreement dated 08.08.2017, evidenced by seven farm-gate consignment

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO challans/invoices (Nos. 001 to 007 dated 30.09.2017, 31.10.2017, 30.11.2017, 31.12.2017, 31.01.2018, 28.02.2018 and 31.03.2018), each supported by a day-wise consignment sales statement reconciling challan quantity to the third decimal place. (j) The purchaser, M/s PinakiRoychowdhury, independently confirmed the transaction by its letter dated 28.10.2018, furnishing a day-wise cash collection and payment statement aggregating Rs. 2,61,68,785/-against the said seven challans. (k) The sale consideration of Rs. 2,61,69,470/- less the cost of cultivation of Rs. 1,69,90,000/- (debited as consumption of opening stock) yields a gross agricultural surplus, from which, after the proportionate expenses of Rs. 1,40,407/-, the Appellant returned net agricultural income of Rs. 80,27,500/- and reported book profit of Rs. 78,87,093/-. (l) Significantly, the Ld. AO has accepted the sale of Rs. 2,61.69.470/- as a receipt and has equally accepted the corresponding cost of sale by allowing the reduction in stock: he has taxed only the resultant surplus, Having accepted both limbs of the trading account, it was not open to him to disbelieve the very activity which produced them.

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO appeal on merits by a reasoned order, for non-prosecution. and has no power to dismiss an appeal for non-prosecution. (i) CIT v. B. Bhaskaran [1998] 229 ITR 658 (Mad) and BhagwanSahai v. CIT [1978] 111 ITR 84 (All) an appeal cannot be dismissed in limine for default of appearance; the appellate authority must examine the merits. (iii) Ajay Gupta v. CIT [2007] 297 ITR 125 (Del) - the powers of the first appellate authority are co-terminous with those of the Ld. AO and must be exercised. (iv) The reliance placed by the Ld. CIT(A) on CIT v. B.N. Bhattacharjee [1979] 118 ITR 461 (SC) and Estate of Late TukojiraoHolkar v. CWT [1997] 223 ITR 480 (MP) is misplaced. The former concerns withdrawal of a settlement application and the latter a reference which the assessee failed to prosecute; neither authorises dismissal of a statutory appeal without adjudication of the grounds. (b) THE INCOME IS AGRICULTURAL INCOME WITHIN THE MEANING OF SECTION 2(1A) AND IS EXEMPT U/S 10(1). Section 2(1A)(b)(i) defines agricultural income to include any income derived from land situated in India and used for agricultural purposes by agriculture. The classic test laid down by the Constitution Bench in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC) is that there must be 'basic operations' tilling of the land, sowing of seeds, planting and similar operations involving expenditure of human skill and labour upon the land itself followed by 'subsequent operations' such as weeding, tending, pruning and rendering the produce fit for the market. In the instant case, every limb of that test is satisfied and are on the record. The expenditure statement for F.Y. 2016-17 evidences land dressing and raking measured in man days, planting of matured saplings, soil sterilisation, application of manures, fertilisers and plant protection chemicals, a farm manager, head supervisors, supervisors and labour engaged over a twelve- month cycle, irrigation by diesel pump, and cutting, grading and gunny- bagging of the harvest. These are, in terms, the basic and subsequent operations contemplated in Raja Benoy Kumar Sahas Roy (supra). The Ld. AO's finding at paragraph 12 of the assessment order that 'the assessee failed to establish that any basic operation has been carried out' is therefore contrary to the material he himself extracted. It is further respectfully submitted that:

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO (i) CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC) comprises the integrated activity of the agriculturist; where basic operations are performed, the income is agricultural. (ii) K. Lakshmanan& Co. v. CIT [1999] 239 ITR 597 (SC) and CIT v. All India Tea & Trading Co. Ltd. [1996] 219 ITR 544 (SC) the character of the income is determined by the nature of the operations on the land, not by the legal form of the receipt. (iii) SakarlalNaranlal vs. CIT [1965] 56 ITR 503 (Guj) - where the produce is raised (iii) SakarlalNaranlal v. CIT [1965] 56 ITR 503 (Guj) by the performance of basic operations, subsequent marketing does not denude the income of its agricultural character. (c) A COMPANY IS ENTITLED TO THE EXEMPTION; THE OBJECTS CLAUSE AND THE TENURE OF THE LAND ARE NO BAR. In the stated that Section 10(1) exempts agricultural income in the hands of any 'person' as defined in section 2(31), which expressly includes a company. Neither section 2(1A) nor section 10(1) requires ownership of the land; income derived from land held on lease and cultivated by the assessee is equally agricultural income. The Ld. AO's inference from the NIC code appearing on a third-party web portal (www.zaubacorp.com) is wholly extraneous. The objects of a company are to be ascertained from its Memorandum of Association, which was produced and which permits agricultural activity. (d) THE OBJECTION AS TO NON-REGISTRATION OF THE LEASE IS UNSUSTAINABLE ON THE FACE OF THE INSTRUMENT. Section 17(1) (d) of the Registration Act, 1908 requires registration of leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent. Section 107 of the Transfer of Property Act, 1882 is to like effect. The Lease Agreement dated 04.04.2016 is expressly 'for a period of 12 months', with one year's charge paid as a non-refundable advance at the time of signing and an exit on one month's notice to either party (Clause 12). A lease for a fixed term of twelve months, not from year to year and not reserving a yearly rent, falls outside section 17(1) (d) and required no registration. Even if registration had been required, an unregistered instrument is admissible under the proviso to section 49 of the Registration Act as evidence of a collateral transaction here, the nature and character of the Appellant's

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO possession and the purpose for which the land was held. The lease is not sought to be enforced against the lessor; it is relied upon to establish the fact of cultivation. The lessor has at no time disputed the lease. It is not open to a third party, at whose instance neither party to the instrument complains, to impugn a transaction inter parties. The Ld. AO's assumption that the lessor 'is not wholly and exclusively owner of said land as there are two other partners' is contrary to the recital in the Lease Agreement, which records the lessor as the absolute owner having purchased the land on or about 19.02.2013, and to the Sale Deed annexed thereto. No material whatsoever has been brought on record to support the assumption, and no enquiry was made of the lessor. As to the objection that different persons signed the Sale Deed and the Lease Agreement, a company acts through such authorised representatives as its Board may from time to time appoint, and there is nothing in law which requires the same individual to execute a purchase in 2013 and a lease in 2016. Shri A. Dash has executed the Lease Agreement and initialled every page thereof as 'Authorised Representative' of the lessor. The Appellant craves leave to place on record the relevant authority of the lessor company, if this Hon'ble Bench so requires. As to the absence of attesting witnesses, no provision of law requires a lease of this description to be attested. Attestation is prescribed for specified instruments mortgage under section 59 and a gift under section 123 of the Transfer of Property Act and a lease is not among them. The instrument is executed on non-judicial stamp paper, is signed by both parties, is initialled on every page by both, and has been acted upon by both. (e) SECTION 68 HAS NO APPLICATION TO THE FACTS, AND CONSEQUENTLY SECTION 115BBE CANNOT BE INVOKED. 1. First limb: a net income figure is not a 'sum credited' in the books. Section 68 is attracted where 'any sum is found credited in the books of an assessee'. The provision operates upon a credit entry, as it appears in the books. The sum of Rs. 80,27,500/- is not credited anywhere in the Appellant's books. It is a computed resultant a net income figure arrived at after setting off the cost of cultivation and the attributable expenses against the gross sale consideration. No such entry exists to be explained.

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO The distinction is not one of form. The Ld. AO could have proceeded against the gross credit of Rs. 2,61,69,470/-, had he been minded to hold the sales bogus; he did not, and could not, because he had simultaneously allowed the corresponding debit. Having chosen to tax the arithmetical difference, he has taxed a figure which section 68 does not reach. A deeming provision must be applied strictly and within its own terms. 2. Second limb: the Ld. AO has accepted the very activity he professes to disbelieve. In the instant case, By allowing the debit of Rs. 1,69,90,000/- towards the cost of the onions sold, the Ld. AO has necessarily accepted that there was a stock of onions, that it had a cost, and that it was sold. By accepting the credit of Rs. 2,61,69,470/- as a receipt he has accepted the sale itself. Both limbs of the trading account stand accepted, and only the surplus is taxed. It is not open to an assessing authority to accept the purchase and the sale and yet hold that the intervening activity never occurred; the position is self- contradictory. Where sales are accepted and the corresponding stock movement is accepted, the resultant surplus cannot be assessed as a cash credit - CIT v. Bhaichand N. Gandhi [1983] 141 ITR 67 (Bom); Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC). Where a receipt is recorded in the books as a trading receipt CIT v. Vishal Exports and the books are not rejected, section 68 has no play Overseas Ltd. (Guj); CIT v. Kailash Jewellery House (Del). In any event, the nature and source of the receipt are not merely explained but documented: a named purchaser, a marketing agreement, a specified quantity, a specified rate, seven serially numbered challans, day-wise delivery statements, and the purchaser's own written confirmation. That is the discharge of the onus which section 68 contemplates. The authorities relied upon by the Ld. AOA. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807 (SC), Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1 (SC), SumatiDayal v. CIT [1995] 214 ITR 801 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) are each cases in which the assessee offered no evidence, or offered evidence shown on enquiry to be false. Here the Appellant has offered primary evidence and the Revenue has made no enquiry at all. Section 115BBE operates only upon income assessed under sections 68 to 69D. The foundational provision failing, the special rate cannot survive.

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO (1) THE ADDITIONS REST ON SURMISE, ON EXTRANEOUS MATERIAL AND ON GROUNDS CONTRARY TO LAW. (i) Merely Non-filing of returns for A.Y. 2013-14 to 2017-18 cannot displace audited accounts. The Appellant is a listed company whose accounts for F.Y. 2016-17 and F.Y. 2017-18 were audited, adopted in general meeting and filed with the Registrar of Companies. Any default under section 139(1) carries its own consequences under the Act; it is not a licence to disbelieve books which have not been rejected under section 145(3). No defect in the books has been pointed out, and the books have not been rejected. (ii) Sale of agricultural produce in cash attracts no disability. There is no requirement of GST/SGST registration or of a GSTIN on the sale of fresh onions, the same being exempt agricultural produce. Section 40A(3) applies to payments made by an assessee and not to receipts, and in any case is inapplicable to computation of agricultural income. The Ld. AO has drawn an adverse inference from the absence of bank routing when the purchaser has itself confirmed payment in cash, day by day. (iii) The 'cold storage' and 'crop loss' objection proceeds on a factual error. The Ld. AO has assumed the entire opening stock of Rs. 13,00,00,000/- to be onions. The record shows that the opening stock as on 01.04.2017 comprised onions of Rs. 1,69,90,000/- and unlisted equity shares of Rs. 11,30,10,000/-. The whole of the onion stock was sold within F.Y. 2017-18 itself, and the closing stock of Rs. 11,30,10,000/- represents shares alone. The premise of an unsold, decaying onion stock is therefore non-existent, and the questions of cold storage and of unclaimed crop loss do not arise. (iv) Sale of agricultural produce in cash attracts no disability. Fresh onions are exempt from GST and no GSTIN is required on their sale. Section 40A(3) applies to payments made by an assessee and not to receipts, and has no application to the computation of agricultural income. The purchaser has itself confirmed payment in cash, day by day, over a seven-month collection cycle consistent with the 'six months collection basis' stipulated on the face of each challan. (v) The absence of PF/ESI does not establish the absence of labour. Seasonal farm labour engaged on a leasehold farm in Odisha and paid in cash does not attract the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 or the Employees' State Insurance Act, 1948 on the applicable thresholds. The salary of Rs. 4,65,000/- debited in the profit and loss account pertains to administrative staff; the farm labour cost of Rs. 15,82,400/- is separately reflected in the cultivation statement for F.Y. 2016-17 and forms part of the

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO cost of stock. Clause 3 of the Lease Agreement expressly contemplates labour charges being incurred by the Appellant on its direct farming activities. (vi) The absence of water and electricity bills is explained by the instrument itself. The cultivation statement discloses ten sets of water pump with diesel engine, pipes and accessories taken on rent, and diesel of Rs. 7,67,756/-. Irrigation by diesel pump on leasehold land generates no electricity bill and no water bill. The Ld. AO's inference that the Appellant 'was not able to procure bogus diesel bills' is speculation, and no enquiry was made of the supplier. (vii) The land cess objection is answered by Clause 4. The Ld. AO faulted the Appellant for not producing evidence of land cess and other taxes. Clause 4 of the Lease Agreement places land revenue, local body tax, government taxes, land rates and fees upon the lessor alone, with no deduction from the Appellant. The Appellant did not bear the cess and could not have produced a receipt for it. (viii) The Director's Report has been read out of context. The observation that the Company carried on no 'business activity' is made in the context of its commercial objects; agricultural operations do not constitute 'business' whose income is chargeable, and the statement is not an admission that no cultivation was undertaken. (ix) The 'girdawari' objection is untenable. A girdawari or khatauni entry is a State revenue record. Its absence, where the produce was neither sold to a government agency nor made the basis of any subsidy claim, cannot be the sole determinant of agricultural activity, particularly where the Khata number and each Plot number stand identified in the Schedule of Property to the Lease Agreement and the land is registered with the Sub-Registrar, Soro. If the Ld. AO doubted the record, section 133(6) was available to him. reference in this regards made to the decision in the case of Mahaveer Kumar Jain v. CIT [2018] 404 ITR 738 (SC), on the principle that entitlement to exemption turns on the statute and not on collateral records. (x) No adverse material was confronted. The Ld. AO relied on www.zaubacorp.com, on economictimes.indiatimes.com and on material attributed to the Indian Council of Agricultural Research, without supplying copies or affording an opportunity of rebuttal. Such material, gathered behind the back of the assessee, is inadmissible Kishinchand Chellaram v. CIT [1980] 125 ITR 713 (SC); Andaman Timber Industries v. CCE [2015] 281 CTR 241 (SC).

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO (xi) Suspicion, however strong, cannot take the place of proof Umacharan Shaw & Bros. v. CIT [1959] 37 ITR 271 (SC); Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC). The assessment proceeds on the Ld. AO's own conjecture as to what crops are grown in District Balasore and what an onion crop must cost, without any enquiry from the lessor, the purchaser or the revenue authorities of the State of Odisha, and without a single summons u/s 131 or notice u/s 133(6). 5. THE ARITHMETIC OF THE ADDITION: WHAT THE Ld. AO HAS ACCEPTED It is necessary at the threshold to identify precisely what has been added, because the figure itself is dispositive of much of the controversy. The profit and loss account for the year, as extracted by the Ld. AO himself at paragraph 6 of the assessment order, discloses gross receipts of Rs. 2,61,69,470/- on the credit side, and the consumption of opening stock (opening stock Rs. 13,00,00,000/-less closing stock Rs. 11,30,10,000/-, i.e. Rs. 1,69,90,000/-) on the debit side. The difference between the two, being Rs. 91,79,470/-, is the gross surplus from the harvest. After the expenses attributable thereto, the Appellant returned net agricultural income of Rs. 80,27,500/-. The Ld. AO has added Rs. 80,27,500/-. He has not added the gross receipt of Rs. 2,61,69,470/-. He has not disturbed the debit of Rs. 1,69,90,000/- towards cost of the produce sold. He has not rejected the books u/s 145(3). He has taxed the net figure alone, and that net figure is arrived at only by giving credit for the cost of cultivation 6. PRAYER In the premises aforesaid, it is most respectfully prayed that this Hon'ble Tribunal may be pleased to: (a) hold that the net agricultural income of Rs. 80,27,500/- is agricultural income within the meaning of section 2(1A) and is exempt u/s 10(1) of the Act, and delete the addition in its entirety; (b) hold that section 68 has no application to a net income figure which stands nowhere credited in the books, and that section 115BBE consequently cannot be invoked; (c) set aside the impugned order dated 14.07.2025 as having been passed in breach of section 250(6) and of the principles of natural justice; and

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO (d) pass such further or other order as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case.” 7. We have heard rival submissions and perused the materials available on record. We find that assessee has taken agricultural land on lease and derived income therefrom by growing/cultivating onion. We note that during the year, the assessee has effected sales of Rs.2,61,69,470/- and claimed net agricultural income of Rs.80,27,500/- in the return of income as exempt. We note that assessee sold the opening stock of onions coming over from the preceding year and hence, claimed the income u/s 10(1) of the Act as exempt. We note that AO has not disputed the sales made by the assessee and even the expenses to the extent of Rs.1,69,90,000/- in connection with onion growing, were also accepted by the AO, then how the AO can reject the resultant profit arising from the said sales and cost of goods, which is coming from earlier year. In our opinion, when the AO has accepted the sales and corresponding movement of stock, then the resultant surplus cannot be assessed as a cash credit. The case of the assessee is squarely covered by the judgment of Hon'ble Bombay High Court in case of CIT vs. Bhaichand N. Gandhi (1983) 141 ITR 67 (Bom.) wherein it has been held that sales recorded in the books of account as a trading receipt cannot be added u/s 68 of the Act when the books are not rejected. We note that assessee is a listed company and accounts are audited and also filed with the ROC. We note that books are audited and moreover the AO has not pointed out any defect in the books of accounts. We also note that there is no requirement of GST registration for sale of onion as the onion is an agricultural produce and is exempt. We also note that provisions section 40A(3) of the Act apply to payments made by the assessee and not to receipts by way of sales, and above all in any case

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO inapplicable to computation of agricultural income. We also note that the assessee is having seasonal farming and showed the diesel expenses of Rs.7,67,756/-. We also note that diesel pump is on lease hold basis and there was no electricity and water bills. We also note that AO has relied on the external material gathered behind the back of the assessee which in our opinion cannot be used to make addition. The case was covered by the order of Hon'ble Supreme Court in cases of Kishinchand Chellaram vs. CIT [1980] 125 ITR 713 (SC) and Andaman Timber Industries vs. CCE [2015] 281 CTR 241 (SC). Therefore, the addition made on the basis of any suspicion, however strong, cannot take the place of proof. The case is covered by the judgment of Hon'ble Supreme Court in case of Umacharan Shaw & Bros. vs. CIT [1969] 37 ITR 271 (SC). We also note that AO has not done any enquiry either u/s 133(6) of the Act or by issuing summons u/s 131 of the Act. Under the circumstances, we are inclined to set-aside the order of ld. CIT(A) and direct the AO to delete the addition.

The order is pronounced in the open Court on 01/09/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUTANT MEMBER Kolkata, Dated: 01/09/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwardedto: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent. 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT

ITA No.248/Kol/2026/A.Y.2018-19 Regis Industries Limited vs. ITO 4. आयकर] �ǕÈ�(अपील) / The CIT(A) ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 5. 6. �ȡ�[�ȡ_�/ Guard file.

BY ORDER, // TRUE COPY // Deputy Registrar, ITAT, Kolkata