POMONA FARMS & PRODUCTS,KOLKATA vs. D.C.I.T., CIRCLE - 34,, KOLKATA

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ITA 1939/KOL/2024Status: DisposedITAT Kolkata24 April 2025AY 2017-20184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made by the Assessing Officer was without any basis. The Tribunal noted that the assessee is the owner of agricultural land and had provided necessary details and evidences to the AO. Crucially, the Tribunal observed that the department had accepted the agricultural income from the same land in AY 2005-06 and 2006-07, with significant amounts accepted in those years (₹1,89,07,751/- for AY 2005-06 and ₹64,28,220/- for AY 2006-07). Furthermore, the assessee had produced a certificate from the local revenue authority confirming the land as 'Adangal' and detailing the produce. Considering these facts, the Tribunal found no justification for treating the agricultural income as bogus. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition. The ratio decidendi is that established agricultural income from owned land, supported by revenue authority certificates and past acceptance by the department, cannot be arbitrarily treated as bogus without contrary evidence.

What were the facts?

The assessee, Pomona Farms & Products, filed appeals against the orders of the National Faceless Appeal Centre, Delhi, for Assessment Years (AY) 2017-18 and 2018-19. The appeals were filed with a delay of 77 days, which the Tribunal condoned. The sole issue in both appeals was the confirmation of an addition of ₹23,59,540/- made by the Assessing Officer (AO) on account of alleged bogus agricultural income. The assessee had declared this amount as exempt agricultural income. The AO treated this income as bogus and added it to the assessee's total income. The assessee had provided evidence of land ownership and cultivation, and the AO had accepted agricultural income from the same land in AY 2005-06 and 2006-07. During appellate proceedings for AY 2018-19, there was no representation from the assessee, leading to an ex-parte order.

What were the issues?

1. Whether the addition of ₹23,59,540/- on account of bogus agricultural income is justified, turning on the interpretation of Section 10(1) of the Income Tax Act, 1961, concerning the exemption of agricultural income. Assessee's Contentions: The assessee argued that it is the owner of agricultural land, and the income generated is genuine agricultural income. Evidences, including a certificate from the local revenue authority certifying the land as 'Adangal' (agricultural land) with specified produce, were submitted. The assessee also relied on the fact that the department had accepted agricultural income from the same land in AY 2005-06 and 2006-07, citing the assessment orders for those years. Revenue's Contentions: The judgment does not record any specific contentions made by the Revenue before the Tribunal. The additions were made by the AO and confirmed by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 10(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 03.05.2024 for the AY 2018-19.

2.

Since, the issue involved in both these appeals is common and the appeals relates to the same assessee, therefore, these appeals are being disposed off by this common order for the sake of brevity and convenience.

3.

At the outset, we observed that there is a delay of 77 days in filing the appeals by the assessee for which the condonation petitions along with the affidavits were filed before us.

5.

The only issue raised is against the confirmation of addition of ₹23,59,540/- by ld. CIT (A) as made by the ld. AO on account of bogus agricultural income.

6.

The facts in brief are that the assessee filed the return of income on 23.03.2018, declaring total income at ₹ nil while claiming that the agricultural income of ₹23,59,540/- as exempt. The case of the assessee was selected for scrutiny and accordingly, the statutory notices along with questionnaire were issued and were also replied by the assessee. The assessee is owner of agricultural land qua which the evidences were placed before the ld. AO in the current year as well as in the earlier assessment years. The ld. AO has accepted the agricultural income in the A.Y. 2005-06 and 2006-07 and the copies of the assessment orders are available in the paper book. However, during the year, the ld. AO treated the income from agriculture as bogus and added the same to the income of the assessee.

7.

In the appellate proceedings, there was no representation on the part of the assessee resulting into passing an ex-parte order filed by the appellate authority.

8.

After hearing the rival contentions and perusing the materials available on record, we find that the assessee is owner of agricultural land for which the necessary details/evidences were filed before the ld. Assessing Officer. Admittedly, there is no dispute as to the ownership

9.

The issue raised in this appeal is similar to one as decided by us in ITA No. 1939/KOL/2024. Accordingly, our decision would, mutatis mutandis, apply to this appeal of assessee in ITA No.1940/KOL/2024. Hence, the appeal of assessee is allowed.

10.

In the result, both the appeals of the assessee are allowed.

Order pronounced in the open court on 24.04.2025.

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