JAI SINGH,GOHANA vs. ITO, WARD - 1, SONIPAT, SONIPAT

The solitary issue in present appeal is against the addition of Rs.21,62,360/- made by the Assessing Officer (AO) u/s. 68 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). Shri Naveen Gupta, appearing on behalf of the assessee submits that the assessee owns agricultural land admeasuring 48 acres. During the period relevant to assessment year under appeal, the gross agriculture receipts of the assessee were to the tune of Rs.57,73,745/-. The assessee in his return of income declared income from agriculture as Rs.79,36,105/- inadvertently after adding expenditure. In assessment proceedings, the assessee furnished details of agricultural land, jamabandi/fard, lease deeds and Form J in support of the agricultural

Shri Manoj Kumar, representing the department vehemently supported the impugned order and prayed for dismissing appeal of the assessee.

Both sides heard, orders of the authorities below examined. The assessee had furnished documents relating to his agricultural land holding and had also furnished Form J in support of the agricultural receipts. The AO himself recorded that the assessee had furnished Form J and other documents relating to the agricultural activities. Further, during the proceedings, the assessee furnished his capital account, balance sheet, revised computation of income and certificate from the professional who had prepared the return, explaining that the agricultural expenses of Rs.21,62,360/- had inadvertently been included in the agricultural income while filing the return. The mistake in adding expenditure on agricultural appears to be bonafide. In any case, the amount of Rs.21,62,360/- does not represent unexplained cash credit or unexplained income. The provisions of section 68 of the Act are attracted in respect of sums found credited in the books of the assessee for which the assessee offers no satisfactory explanation regarding the nature and source thereof. In the facts of the present case, the impugned amount represents agricultural expenditure claimed by the assessee and not any unexplained credit. Further, the assessee's explanation regarding the clerical mistake is supported by the certificate of the professional who had prepared the return and the capital account/balance sheet and revised computation furnished during the proceedings. Merely because separate supporting evidence for each item of agricultural expenditure was not furnished, the same could not have been treated as unexplained income under section 68 of the Act. The nature of the impugned amount and the explanation furnished by the assessee have not been properly appreciated by lower authorities. Considering totality of facts and circumstances of the case, I find merit in the contention of the assessee. The addition of Rs.21,62,360/- made by the Assessing Officer and sustained by the CIT(A) is directed to be deleted.