ARUMUGAM MALINGUPRABHU,METTUPALAYAM vs. ITO, NON CORPORATE WARD 3(1), , COIMBATORE

Brief facts are as under: The assessee is an agriculturist and is not doing any activities other than agricultural activities and has been filing return of income for all the assessment years offering agricultural income. During the assessment year under consideration, the appellant filed his return of income offering agricultural income of Rs.56,08,750/-. The assessee also reported interest income at Rs.14,566/. The case of the assessee was selected for scrutiny to verify the issue of "Large agricultural income compared to total income" and in this regard, the assessee was issued notices regarding the agricultural income earned, for which the assessee had filed detailed submissions establishing the activities and crops cultivated by the appellant for earning the agricultural income. The Assessing officer (‘AO’ in short) however, proceeded to estimate the addition at Rs.16,85,125/-, being the difference in agricultural income from the AY 2017-18 (Rs.39,23,625/-) and AY 2018-19 (Rs.56,08,750/).

Aggrieved, the assessee challenged the assessment order before the CIT(A). The CIT(A) partially allowed the appeal by estimating addition of Rs.10,96,581/- as income from other sources of the appellant. He also further held that provisions of section 115BBE are not applicable in this case.

The learned counsel for the assessee submitted that the increase in agricultural income is due to the increase in banana plants as intercrop due to huge demand and increase in market price for bananas. He further stated that the break-up of plants along with the details of the land where the intercrop was planted was also submitted before the lower authorities to substantiate the Counsel further submitted that during the first appellate proceedings, the assessee vide his written submissions dated 15.02.2023 (Page 239 of the paper book) in Para 4 and 5 submitted the entire details of land and crops contributing to the agricultural income earned by the appellant. The ld. Counsel furthermore submitted that the assessee had also placed on record in Para 7 of the submissions made before First Appellate Authority that under similar market situation/ intercrop being a cash crop/banana during the AY 2020-21, the assessee had earned an income of Rs.52,02,865/- which agricultural income earned by the appellant was also subjected to assessment and accepted by the department.

Per contra, the ld. DR, Addl. CIT relied upon the order of the CIT(A) and pleaded for the dismissal of the appeal.

We have heard rival submissions and perused records. We find that the CIT(A) while deciding the appeal filed by the appellant had granted partial relief to the appellant by estimating addition of Rs.10,96,581/- as income from other sources of the Appellant without taking into account to section 115BBE of the Act (Para 6.3 of the CIT(A) Order) and allowed the agricultural income of Rs.41,06,284/-. We have gone through the entire conspectus of matter and cut short the dispute inter se, estimating the agricultural income on par with the agricultural income of AY 2020-21 (Rs.52,02,865/-) is justified. To bring quietus to the present proceedings, we direct the AO to take income at Rs.4,05,885/- under the head income from other sources under normal provisions of the Act. We also held that Section 115BBE of the Act is not applicable in this case.

In result, appeal of the assessee is partly allowed.