SHIVANANDASWAMY GURUPRASAD,CHAMARAJANAGAR vs. INCOME TAX OFFICER, WARD-1, CHAMARAJANAGAR

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

ITA Nos. 2329 & 2330/Bang/2025 Assessment Years : 2013-14 & 2014-15

Sri Shivanandaswamy Guruprasad, The Income Tax Somanahalli Village, Officer, Gundlupet Taluk, Ward – 1, Chamarajanagar – 571 111. Chamrajanagar. Vs. PAN: AMZPG9021B APPELLANT RESPONDENT

: Shri V. Narendra Sharma, Assessee by Advocate

Revenue by : Shri Subramanian .S, JCIT-DR

Date of Hearing : 12-02-2026 Date of Pronouncement : 11-05-2026

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

These are the appeals filed by the assessee challenging the orders of the NFAC, Delhi dated 18/08/2025 in respect of the A.Y. 2013-14 and 2014-15.

Page 2 of 11 ITA Nos. 2329 & 2330/Bang/2025 narrated and the decision arrived in the said appeal will apply mutatis mutandis to the other appeal in ITA No. 2330/Bang/2025.

Page 3 of 11 ITA Nos. 2329 & 2330/Bang/2025

Page 4 of 11 ITA Nos. 2329 & 2330/Bang/2025 assessment order, we found that the assessee had filed various supporting documents to show that the assessee had earned agricultural income through the coconut trees. The AO had no other details or documents to disbelieve the agricultural income reported by the assessee except the allegation that the assessee had not furnished the evidences. Before the Ld.CIT(A), the assessee had filed a detailed written submissions and also enclosed a paper book. In the said paper book, the assessee had furnished the various details of the land holdings and the crops cultivated in the said lands and also the profit and loss account from tally and the balance sheets for the year ended 31/03/2013 and 31/03/2014. Along with the said documents, the assessee had also furnished the copies of the sales ledger, tender coconut sales account, sales ledger of nursery plants, sales ledger of sheep and copies of expenditures like repairs and maintenance, veterinary doctor charges, electricity, animal feeds, fertilizers, fixed labour charges, medicine, vehicle repairs and maintenance etc. For the sake of easy reference, we are extracting the written submissions filed by the assessee before the Ld.CIT(A) “The appellant begs to submit that, it had filed a paper book before the CIT[Appeals] containing Written Submissions along with copies of ITR-5, ITR-4 booklet, list of agricultural land holdings with survey numbers, land extent, crops cultivated and land in whose family members name exist like mother, brother, etc, profit and loss account from tally, Balance Sheet for the year ended 31.03.2013 and 31.03.2014 along with copies of sales ledger, tender coconut sales account, sales ledger of nursery plants, sales ledger of sheep, and copies of expenditures like repairs and maintenance, veterinary doctor charges, electricity, animal feeds, fertilizers, fixed labour charges, medicine, labour wages, vehicle repairs and maintenance etc. Also enclosed copies of compensation orders of Horticultural Department in Kannada language dated. 05.07.2019 stating nearly 2090 coconut trees were dried in the earlier years, prior to financial year 2017-18 and 2018-19 and compensation amount were paid on the basis of Rs. 400.00 per tree lost. Therefore, the appellant must have much more trees than the number of trees stated by the Income-tax inspector. The trees lost on which compensation obtained was also to be added to the

Page 5 of 11 ITA Nos. 2329 & 2330/Bang/2025 number of trees gave by the income tax inspector, was given subsequent to the assessment year. The Income-tax inspector in his report subsequent to the financial year under assessment has observed that coconut trees, have diseases and reported 3200 trees are bearing fruits. This was almost 2 years from the middle of assessment year. Therefore, the trees are stated to have been lost also to be counted, as they were fruit bearing in the year of assessment. Therefore, the amount realized on coconut cultivation with a yield of 120 nuts per year, per tree is reasonable and request your goodself to accept the same. The appellant has coconut trees in 67.29 acres details furnished earlier. The appellant has submitted all the available information to the Assessing Officer to enable him to complete the assessment. The appellant is an intensive agriculturist and else has any job to do. He and his family are solely depending on the agriculture. This is evident from the extent of land holdings. All the lands have come from succession from one generation to another generation. Under the Karnataka Land Revenues Act; a person can hove 52 acres of land in his name. Since the appellant stated that he is cultivating in 94 acres of land means definitely the appellant family members also should have lands in their names. In the published report of coconut cultivation in one tree gives an annual yield of 120 to 150 nuts. The yield varies from region to region. The maximum yield a tree could give 150 nuts to a minimum of 70 nuts. Similarly, in another published report in one hectare (2.5 acre) of land. coconut cultivation gives 3500 nuts to 6000 nuts. Therefore the appellant admitting agriculture income Rs. 68,05,260.00 for the financial year 2013-14 and Rs. 10,06,250.00 from the cultivation of coconut and other crops in 94.23 acres of land is very reasonable and request you to accept the same. The appellant in response to a notice u/s 142(1), dated 14.12.2016 has submitted as under and we re-produce the same as under; 1. “RTC: I have furnished RTC for the whole year along with details of crops. 2. A statement showing the details of crops and yield and income is enclosed.

Page 6 of 11 ITA Nos. 2329 & 2330/Bang/2025 3. Copy of the sale bills: Sale bills are maintained for all crop sales. 4. Expenses: Expenses shown in the profit and loss accounts are covered by vouchers. 5. Details of Agricultural Income: I have maintained regular books of accounts in course of agriculture income supported by vouchers. 6. Capital: I have shown statement of profit and loss accounts and the capital account is prepared taking Assets and Liabilities all the assets are from ancestors,. I have taken market value 7. Capital expenses: I have incurred nearly 50 lakhs towards development of Land shown separately. I have incurred expenses towards fencing, Bore Well, Drip and Ponds as shown in the Balance Sheet. I am an agriculturist covering 94.23 acres shown in the name of family members cultivated by me. All income earned from agriculture is invested only on agriculture land”. The reason gave by the assessing officer is that all the vouchers are computerized vouchers and are signed by Sri. Ravikumar. Said vouchers appear to have prepared for producing before the department. Hence opined that he has not generated so much of agricultural income. Hence he has rejected the quantum of agricultural income claimed and restricted the same to Rs. 22,75,000.00 and 37,60,000.00 for the Assessment year 2013-14 and 2014-15 respectively. The appellant contends that, he has received agriculture income to the extent of Rs. 68.05.260.00 from the cultivation of 94.23 acres of land, mainly from coconut plantations. The appellant states that in the assessment year 2013 14, it had 5300 trees in 67.29 acres and remaining lands were utilized for cultivation of other crops. It means in 67.29 acres the appellant had 5300 number of coconut trees, amounting to less than 80 trees per acre which is ideal and reality. Similarly it has taken less than 120 nuts per tree per year, which is also good and fair. It is not exorbitant and reasonable. The number of trees worked out as under; Number of Sl.No. Particulars trees The actual No’s of trees 1 3200 adopted by AO based on

Page 7 of 11 ITA Nos. 2329 & 2330/Bang/2025 ITI’s reports No of trees dried up due to decease and compensation received from coconut Welfare 2 2090 Board, Horticulture Departemnt Government of Karnataka (copies enclosed) Total 5290 When we have furnished details of agricultural land, land holdings, crops cultivated the learned Assessing Officer ought to have accepted the agricultural income declared. The assessing officer has also stated that in some of the RTCs no crop information was mentioned and details are not clear. It may please be noted that the inspector of the department has seen the standing crop of coconut. The average life of a coconut tree is about 60 years. We have trees varying from 15 years to 30 years. When trees are standing for so many years, mentioning of no crop information is futile, false and baseless. The village accountant maintains record for which he has to visit the agricultural land during monsoon and reverse monsoon time to ascertain crops cultivated by each land owner. If the village accountant for some reason or the other could not visit the land the comment of no crop information will appear in the RTC. Therefore the AO is not correct in stating that crop information was not adduced because the fact of coconut trees could not be changed but for the statement like 'no crop information'. What is available in the year 2010 or 2011 or 2012 should be available in the year 2012-13 and 2013-14, unless it is destroyed by act of nature or human being. The average life of a coconut tree is between 50 to 60 years. Therefore, the number of trees estimated by the inspector or assessed by Assessing Officer, is totally not correct. The learned Assessing Officer has also stated while rejecting and estimating agricultural income that no substantial amount were routed through the bank account, Hence he was of the opinion that, the assessee has not derived agricultural income to the extent shown in the return of income Rs. 68,05,260.00 and Rs. 70,06,250.00 respectively for the assessment year

Page 8 of 11 ITA Nos. 2329 & 2330/Bang/2025 2013 14 and 2014-15 respectively. It is submitted that the appellant has not utilized this agricultural income for any other purpose other than improving the agricultural land. The appellant has submitted the Balance Sheet showing assets and liability as on 31.03.2013 and 31.03.2014 respectively. From the analysis of Balance Sheet as on 31.03.2014, the following emerges; Agricultural 50,00,000.0 LandDevelo 0 Fencing 6,00,100.00 pment Bore well 3,92,740.00 Drip 5,02,800.00 Ponds 2,00,250.00 Plantation 2,40,550.00 Drawing 1,20,000.00 Total 70,56,440.00 In addition to the above capital expenditure, the appellant had incurred expenditure for Bore Well Repairs and Maintenance (45,800.00), Conveyance (61,445.00), Electricity (59,720.00), Fertilizers (15,30,260.00), Vehicle Maintenance (1,21,590.00), Salary (8,10,000.00) Labour Lakshmi (72,000.00), Feeds (90,340.00), Doctor Visiting Charges (12,500.00) and Medicines (9,310.00). None'of this expenditure is seen by the learned AO, hence refrained from commenting. The appellant has also declared agricultural crop income from cotton 3.34 acres Rs. 75,000.00, jowar 11.14 acres Rs. 2,10,000.00, coconut nursery plants Rs. 21,00,000.00 and from sunflower 2.2 acres Rs. '60,000.00, even on these crop income the learned AO has not commented. Amount in bracket is expenditure. It is interesting to note that the entire profit and loss account and balance sheet contains only agricultural based activities, resultant expenditures, assets and income. No asset or expenditure other than agriculture is forth coming in the statement. If the Assessing Officer doubting any of the income or expenditure corollary the expenditure or the income is to be reduced from the relevant assets. The appellant has not withdrawn any funds from the agricultural section to invest in non- agricultural activities. In this context we have submitted The Supreme Court citation of the case of CIT Ernakulam V/s P.K. Noor Jahan, 237 ITR 570. The difference between incomes computed by the AO against the income computed by the appellant is nothing but from

Page 9 of 11 ITA Nos. 2329 & 2330/Bang/2025 agricultural activity. Therefore, the asset created out of the agricultural income is to be redrawn. It may also be noted that the assessing officer has stated that, no amount is routed through the bank accounts, hence suspected the scope of income. It is well known fact that the operation of agricultural activity is carried on in cash only as he has to spent money on agricultural operation in cash only. The sale proceeds are received in cash only as most of the dealers in agricultural produce operate in cash only at the field therefore we submit that nothing is wrong to incur expenditure in cash. The Government of India has accepted the agricultural economy is operated in cash only and whereby announcing number of concessions to handle its operation in cash with concession to facilitate agricultural economy. It is also submitted that the appellant at least some books of accounts in the nature cash book and ledger and is maintained in the village with available records. The learned Income-tax officer has rejected the books of account and estimated the agriculture income as Rs. 25 000.00 per acre and Rs. 40,000.00 for the assessment year — 2013 - 2014 and 2014-15 respectively. His estimation is pitted against the actual books of account maintained by the appellant. Thus, we request your goodself to set aside the addition to the total income reported by the Assessing Officer.” 9. From the above said written submissions, the assessee had explained the facts in detail and also submitted that the agricultural activity is normally carried out in cash only and similarly the sale proceeds are received in cash only. We are also in agreement with the submissions made by the assessee that normally, the agricultural operation as well as the activities are mostly conducted in cash only and therefore it could not be taken as a reason for estimating the agricultural income. Similarly, we have also noticed that the inspector of the department had verified the agricultural lands of the assessee and she might have witnessed the standing coconut crops and in that circumstances even though the RTC had mentioned “No crop information”, the same could not be taken as a ground for estimating the agricultural income. In the written submissions, the assessee had also explained that the number of coconut trees available

Page 10 of 11 ITA Nos. 2329 & 2330/Bang/2025 during the assessment years are more than the trees found out by the inspector at a later point of time and therefore the number of trees adopted by the AO based on the report of the inspector of the department could not be taken as correct one. The assessee had also furnished the details of the various expenditures incurred by him but none of the said expenditures were considered by the AO while passing the assessment order. Apart from the coconut, the assessee had also declared other incomes which were also placed before the AO but the AO had not at all considered the said incomes also except the income earned from the coconut trees. From the written submissions filed by the assessee, the assessee had maintained various records/documents in respect of the sales as well as in respect of the various expenditures. But none of the said documents were considered by the Ld CIT(A). Even while going through the assessment order, we do not find that such details were produced before the AO. In fact the said details were filed before the Ld.CIT(A) along with the written submissions.The Ld CIT could have called for a remand report.

Page 11 of 11 ITA Nos. 2329 & 2330/Bang/2025 one. The other agricultural incomes are also not considered by the AO. Therefore, in the interest of justice, we are inclined to remit this issue to the file of the AO for fresh consideration, in accordance with law. We also permit the assessee to furnish all the details which were furnished before the Ld.CIT(A) and also the other details in support of their claim, in the assessment proceedings taken up by the AO. We also direct the AO to grant a reasonable opportunity of being heard to the assessee before passing the assessment order.

Order pronounced in the open court on 11th May, 2026.

Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice President Judicial Member

Bangalore, Dated, the 11th May, 2026. /MS /

Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order

Assistant Registrar, ITAT, Bangalore