VERKEY ROYMON KANJIRATHINKAL ,SOMWARPET vs. INCOME TAX OFFICER, WARD-1, MADIKERI
What did the Tribunal hold?
The Tribunal held that there cannot be a straight-jacket formula to determine yield and average government data cannot be the sole basis for disallowing claims. However, since the assessee failed to substantiate their claim despite opportunities, the case was remanded.
What were the facts?
The Assessing Officer added Rs. 40,97,213/- to the assessee's income as excess agricultural income. The Commissioner upheld this addition, finding that the assessee's claimed ginger yield was significantly higher than government records and lacked satisfactory explanation.
What were the issues?
Whether the assessee's claimed agricultural yield is substantiated by adequate evidence, and if not, whether the addition made by the AO and upheld by the CIT is justified.
Which sections of the Income-tax Act were involved?
Section 250,Section 147,Section 143(3),Section 143(3a),Section 143(3b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE BENCH “SMC”, BANGALORE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI WASEEM AHMED
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 20.02.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2018-19.
In the instant case, the Assessing Officer (AO) vide assessment order dated 17.03.2021 u/s 147 r.w.s 143(3) r.w.s 143(3a) & 143(3b) of the Act, has made the addition of Rs.40,97,213/- being excess claim of agricultural income.
The Assessee, being aggrieved against the aforesaid addition, preferred first appeal before the Ld. Commissioner, who vide impugned order dismissed the appeal, affirming the said addition, by observing as under:
“The Assessee failed to provide any details and documentary evidence qua the yield of ginger @6375/hector by observing that this is almost 2.5 times the average yield shown by the government record of Horticultural Department. Further, the Assessee neither provided any satisfactory explanation as regards to abnormally large production of ginger cultivation, as compared to average rate of production provided by Department of Agricultural of Government of India. Therefore, the total yield of ginger shown by the Assessee is not comparable with the Government data and hence cannot be said to be fair and reasonable, hence, cannot be accepted as true quantity of production”.
We by giving thoughtful considerations to the peculiar facts and circumstances of the case, observe that there cannot be any straight jacket formula to determine the quantitative yield in a particular area. Even the average rate of production provided by the Department of Agricultural of Government of India cannot be the sole basis or criteria for disallowing the claim of the Assessee. However, considering the peculiar facts, as the Assessee, despite of affording various opportunities by the Ld. Commissioner, failed to substantiate his claim and thus considering the peculiar facts and circumstances in totality, for just and proper decision of the case, equitable relief, fair play and substantial justice, we are inclined to remand the instant case to the file of the Ld. Commissioner for decision afresh, suffice to say by affording reasonable opportunity of being heard to the Assessee.
We also deem it appropriate to direct the Assessee to comply with the notices to be issued by the Ld. Commissioner and file the relevant submissions and documents as would be essentially required for proper and just decision of the case. We also clarify that in case of subsequent default, the Assessee shall not be entitled for any leniency.
Thus, the case is accordingly remanded to the file of the Ld. Commissioner for decision afresh.
In the result, the Assessee’s appeal is allowed for statistical purposes.
Order pronounced in the open court on 14.08.2025.
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- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
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