REDDY SAMPAT VIJAYA,HYDERABAD vs. ACIT., CENTRAL CIRCLE -1(1), HYDERABAD

PER MANJUNATHA G., A.M :

The captioned appeals are filed by a single assessee viz., ‘Reddy
Sampat Vijaya” against the separate orders of the learned
Commissioner of Income Tax (Appeals), Hyderabad – 11, dated
27.08.2025 for A.Ys. 2015-16 and 2017-18 and dated 05.08.2025
for A.Y. 2019-20. Since common issues are involved in all these three appeals, these appeals were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity.
2. First we take up assessee’s appeal in ITA
No.1496/Hyd/2025 for A.Y. 2015-16. The grounds raised by the assessee read as under :
“1 The order passed by the Ld. CIT(A) under section 250 dated 22-08-
2025 is erroneous both on facts and in law to the extent the order is prejudicial to the interests of the appellant.
2. The Ld. CIT(A) ought to have considered that no assessment is pending as on the date of search u/s 132 conducted on 26-04-2018, and no incriminating material was found during the course of said search u/s 132. The notice issued u/s 153A for this A.Y. 2015-16 is invalid and, however, if any assessment be completed u/s 153A, the income returned has to be accepted.
3. The Ld. CIT(A) ought to have considered that the stipulated period for issue of notice u/s 143(2) has expired on the return of income filed on 13-
07-2016. The assessment u/s 143(1) is final and no notice u/s 153A can be issued in the absence of any incriminating material, and the assessment u/s 153A of the Act has to be completed accepting the income returned.
4. The Ld. CIT(A) ought to have considered that no addition can be made in the assessment year u/s 153A of the Act in the absence of incriminating material found at the time of search u/s 132, and which view is supported by the decision of the Hon’ble Supreme Court in the case of Abhisar Builders Pvt. Ltd. vs. PCIT (2023) 149 Taxmann.com 399. 5. The Ld. CIT(A) ought to have considered that the time limit for issue of notice u/s 143(2) has lapsed/expired and the assessment was completed—unabated; hence, no addition can be made in the absence of incriminating material seized at the time of search u/s 132. 6. The Ld. CIT(A) erred in upholding the addition of Rs. 4,00,000/- as made by the A.O. without fairly and properly considering the facts of the case.
7. The Ld. CIT(A) ought to have considered that the A.O. erred in making disallowance of Rs. 4,00,000/- from agricultural income admitted of Rs.
9,00,000/- without there being any incriminating material found during search in the case of the appellant.
8. The Ld. CIT(A) erred in not considering the fact that the A.O. made addition merely on the basis of surmises and suspicions and without any corroborative material on hand, which cannot be part of incriminating material.
9. The Ld. CIT(A) ought to have considered the fact that the assessee already provided the patta passbook which shows the assessee is having sufficient landed properties to earn agricultural income of Rs.
9,00,000/-.
10. The Ld. CIT(A) ought to have considered the fact that agricultural produce is seasonal in nature and depends on various factors viz., crop pattern, source of water, pest and pest control methods, demand and supply for the crops grown, timely marketing strategy, etc., and thus a specific uniform rate cannot be assigned to every landholding.
11. The Ld. CIT(A) ought to have considered the fact that the A.O. made the addition of Rs. 9,55,000/- based on dumb documents without considering the evidences submitted by the assessee.
12. The Ld. CIT(A) ought to have considered that the registered sale deed is a final registered document and such deed cannot be altered.
13. The Ld. CIT(A) ought to have considered that the agreement of sale dated 05-02-2015 is only a dumb document, where no signature of the vendee was made confirming the contents therein.
14. The Ld. CIT(A) ought to have considered that there is no material to support the assumption of the A.O. that the assessee has paid by the appellant.
15. The appellant may, add or alter or amend or modify or substitute or delete and /or rescind all or any of the grounds of appeal at the time before or at the time of hearing of the appeal.”
3. The brief facts of the case are that, the assessee is a partner in M/s. Giridhari Constructions and has filed her original return of income for A.Y. 2015-16 on 13.07.2016 admitting total income of Rs.3,20,670/- and agricultural income of Rs.9,00,000/-. A search and seizure operation was conducted u/s 132 of the Income Tax
Act, 1961 in the case of M/s. Giridhari Constructions on 26.04.2018 and as part of search operations, warrant u/s 132 of the Income Tax Act, 1961, was executed on the assessee.
Consequent to search, notice u/s 153A of the Income Tax Act,
1961 was issued and served on the assessee. In response thereto, the assessee filed her return of income on 27.04.2019 admitting total income of Rs. 3,20,670/- and agricultural income of Rs.
9,00,000/-. The case was selected for scrutiny and during the course of assessment proceedings, the A.O. noticed that, the assessee has reported agricultural income of Rs.9,00,000/-. The A.O. called upon the assessee to furnish evidences for claiming agricultural income along with details of crops grown, bills/vouchers for sale of agricultural produce and expenditure incurred for agricultural operations. In response, the assessee vide her letter dt.28.12.2020 and 15.02.2021 has furnished details of of crops grown, bills/vouchers for sale of agricultural produce.
Therefore, the A.O. taken into account the landholding of the assessee has estimated agricultural income @ Rs.15,000/- per acre on the total landholding of the assessee of Ac.31.20 guntas and allowed agricultural income of Rs.4,93,875/- and rounded off to Rs.5,00,000/- and balance amount of Rs.4,00,000/- has been treated as “Income from other sources”. The A.O. further noted that, as per the seized documents found during the course of search, the assessee’s husband entered into an agreement for purchase of agricultural land admeasuring about Ac.2.10 guntas for a consideration of Rs.11,80,000/-. The same land was purchased by the assessee for a consideration of Rs.2,25,000/-.
The difference of Rs. 9,55,000/- has been treated as unexplained investment and added to the income returned.
4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A).
5. Before the Ld. CIT(A), the assessee challenged the additions made by the A.O. towards ad hoc disallowance of agricultural income and assessed the income under the head “Income from other sources” and also made addition towards unexplained investment being the difference between the consideration as per sale agreement and the registered sale deed. The Ld. CIT(A), after considering the submissions of the assessee and also taken note of various evidences found during the course of search, observed that, during the appellate proceedings, the assessee failed to furnish any evidence to reconcile the difference between the consideration stated in the sale agreement and that of the registered sale deed. The assessee merely contended that, the registered sale deed reflects the final consideration with no extra payment made in cash or otherwise and that its contents cannot be altered. The agreement of sale dt.05.02.2015 for purchase of agricultural land admeasuring Ac.2.10 guntas situated at Arkathala Village, Nawabpet Mandal, Ranga Reddy District records the consideration of Rs.11,80,000/- whereas the registered Sale Deed No.4570/2015 mentions only Rs.2,25,000/-.
The difference was required to be explained by the assessee with from the assessee’s premises. Since no evidence has been submitted, the A.O. has rightly assessed the difference as unexplained investment.
6. The Ld. CIT(A) further noted that, the assessee could not furnish any other evidences except the details of landholding in support of agricultural income. Therefore, there is no error in the reasons given by the A.O. to estimate agricultural income @
Rs.15,000/- per acre in the absence of relevant details. Thus, rejected the explanation of the assessee and sustained the additions made by the A.O. towards ad hoc disallowance of agricultural income under the head “Income from other sources”
and additions made towards the difference between consideration as per sale agreement and consideration as per the registered sale deed.
7. Aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal.
8. The first issue that came up for our consideration from ground nos.4 to 10 of assessee’s appeal is additions towards agricultural income of Rs.4,00,000/-.
9. The learned counsel for the assessee Shri P. Murali Mohan
Rao, C.A. referring to the details of landholding like copy of Pattadar Pass Book and Sale Deed etc. submitted that, the assessee owns Ac.31.20 guntas of land in different survey numbers and the same has been used for carrying out agricultural operations. The assessee has declared agricultural income for many years, including the earlier assessment years. The assessee has furnished the details of landholding, however, could not furnish relevant details of sale of agricultural produce and expenditure incurred for carrying out agricultural operations.
Although, the A.O. accepted the fact that, the assessee is holding huge extent of agricultural land and also carrying out agricultural operations, but made an ad hoc estimation of Rs.15,000/- per acre without any basis. Therefore, he submitted that, the additions made by the A.O. should be deleted.
10. The learned Senior A.R. for the Revenue, Dr. Sachin Kumar, on the other hand, supporting the order of Ld. CIT(A) submitted that, except the details of landholding, the assessee did not furnish relevant details of crops grown, bills and vouchers for sale of agricultural produce and expenditure incurred for carrying out agricultural operations. In the absence of any relevant details, the A.O. has rightly estimated agricultural income @ Rs.15,000/- per acre and disallowed the balance amount and assessed the income under the head “Income from other sources”. The Ld. CIT(A), after considering the relevant facts, has rightly sustained the additions made by the A.O. Therefore, he submitted that, the additions made by the A.O. and sustained by the CIT(A) should be upheld.
11. We have heard both sides, perused the material available on record and had gone through the orders of the authorities below.
There is no dispute with regard to the fact that, the assessee is regularly reporting agricultural income in the return of income filed u/s 139(1) of the Act, for all these assessment years, including for earlier assessment year. The assessee had also furnished relevant details of copies of Pattadar Pass Book and Sale
Deed etc. to show that she is holding Ac. 31.20 guntas in different survey numbers. In fact, the A.O. never disputed the fact that, the assessee holds Ac.31.20 guntas of agricultural land and also carried out agricultural operations.
However, estimated agricultural income at Rs.15,000/- per acre and disallowed balance amount only on the ground that, the details of crops grown, bills/vouchers for sale of agricultural produce and expenditure incurred for carrying out agricultural operations has not been furnished by the assessee. The assessee has furnished relevant details of agricultural land details and as per the details submitted by the assessee, the assessee holds Ac.31.20 guntas of agricultural land in different survey numbers. The assessee had also carried out agricultural operations for many years which is evident from the return of income filed for earlier assessment years where she has reported agricultural income for many years and the same has been accepted by the Department. In fact, for the year under consideration also, the A.O. has accepted the fact of holding agricultural income and carrying out agricultural operations which is evident from partial disallowance made by the A.O. towards agricultural income. Since the A.O. has accepted the fact of carrying out agricultural operations, in our considered view, without any basis, the ad hoc estimation made by the A.O. @
Rs.15,000/- per acre cannot be accepted. Since the assessee is holding huge extent of Ac.31.20 guntas of agricultural land and also carried out agricultural operations, in our considered view, the agricultural income reported by the assessee should be accepted. Further, the A.O. himself has accepted the agricultural income reported by the assessee for A.Ys. 2016-17 and 2018-19. Since the A.O. has accepted the agricultural income declared by the assessee for few years and also accepted the agricultural income declared for the year under consideration partly, in our considered view, the ad hoc estimation made by the A.O. for disallowance of agricultural income and assessing under the head
“Income from other sources” cannot be upheld. The Ld. CIT(A), without appreciating the relevant facts, simply upheld the additions made by the A.O. Thus, we set aside the order of Ld.
CIT(A) and direct the A.O. to delete the additions made towards disallowance of agricultural income of Rs.4,00,000/- and assessed the income under the head “Income form other sources.”
12. The next issue that came up for our consideration from ground nos.11 to 14 of assessee’s appeal is addition of Rs.9,55,000/- towards unexplained investment for purchase of property at Arkathala Village, Nawabpet Mandal, Ranga Reddy
District.
13. The A.O. had made addition of Rs. 9,55,000/- on the basis of agreement, dated 05.02.2015 and Sale Deed No.4570 of 2015 for purchase of agricultural land and as per the agreement, the consideration was shown at Rs. 11,80,000/- and finally the property was purchased by the assessee for Rs. 2,25,000/-. The A.O. made additions on the ground that, the assessee could not explain the difference between the value stated in the agreement and that in the sale deed and thus, made addition as unexplained investment.
14. The learned counsel for the assessee referring to agreement of sale dated 05.02.2015 submitted that, the agreement was between
Shri Sampath Srinivasa Reddy, husband of the assessee, and Shri
Raghupathi Reddy, seller and it is in no way connected to the assessee. Further, the so called property has been purchased by the assessee for the subsequent financial years. The A.O. without appreciating those facts, simply made additions in the hands of the assessee even though the agreement is not in the hands of the assessee and the assessee has not paid any consideration as per the agreement. Therefore, he submitted that, the addition made by the A.O. should be deleted.
15. The learned counsel for the Revenue, on the other hand, supporting the order of Ld. CIT(A) submitted that, there is a clear difference between agreement value and sale deed value and the same could not be explained by the assessee with source of income. Therefore, the A.O. has rightly made additions as unexplained investment and the Ld. CIT(A), after considering the relevant facts, has rightly sustained additions made by the A.O.
Therefore, he submitted that, the additions made by the A.O.
should be upheld.
16. We have heard both the parties and perused the material available on record and had gone through the orders of the authorities below. We find that, the A.O. made addition of Rs.
9,55,000/- as unexplained investment and added to the total income on the basis of an agreement of sale dated 05.02.2015
between Shri Sampath Srinivasa Reddy and Shri Raghupathi
Reddy on the ground that, the assessee agreed to purchase the property for a consideration of Rs. 11,80,000/- and finally registered the property for a consideration of Rs. 2,25,000/-. We have gone through the relevant agreement of sale dated
05.02.2015 and we find that, the said agreement was not between the assessee and the seller. Further, the above property has been purchased by the assessee in the subsequent financial years for a consideration of Rs.2,25,000/-. Since the agreement is not between the assessee and the seller and further, the said agreement was not signed by the assessee and also not witnessed by any witness, in our considered view, the additions made by the A.O. on the basis of on unrelated agreement cannot be sustained.
The Ld. CIT(A), without appreciating the relevant facts, simply sustained the additions made by the A.O. Thus, we set aside the order of Ld. CIT(A) on this issue and direct the A.O. to delete the addition of Rs. 9,55,000/- made towards unexplained investment.
17. In the result, the appeal filed by the assessee for A.Y. 2015-16
is allowed.
ITA No.1497/Hyd/2025 for A.Y. 2017-18. 18. The grounds raised by the assessee read as under :
“1. The order passed by the Ld. CIT(A) under section 250 dated 22-06-
2025 is erroneous both on facts and in law to the extent the order is prejudicial to the interests of the appellant.
2. The Ld. CIT(A) erred in upholding the addition of Rs. 8,00,000/-, treating agricultural income as income from other sources, made by the A.O. in the absence of any incriminating material found during the course of search u/s 132 on 26-04-2018. 3. The Ld. CIT(A) ought to have considered that no addition can be made basing on statement recorded u/s 132(4), made in the absence of any corroborative evidence.
4. The Ld. CIT(A) erred in considering the fact that the A.O. made addition merely on the basis of surmises and suspicions and without any corroborative material on hand, which cannot be part of incriminating material.
5. The Ld. CIT(A) ought to have considered the fact that the agricultural income admitted of Rs. 13,00,000/- is reasonable keeping in view the landholdings, crops grown, and as such, no addition should have been made towards income from other sources.
6. The Ld. CIT(A) ought to have considered the fact that agricultural produce is seasonal in nature and depends on various factors viz., crop pattern, source of water, pest and pest control methods, demand and supply for the crops grown, timely marketing strategy, etc., and thus a specific uniform rate cannot be assigned to every landholding as was estimated by the A.O.
7. The Ld. CIT(A) ought to have considered the fact that the A.O. made the addition of Rs. 6,71,548/- without considering the evidences submitted by the assessee.
8. The Ld. CIT(A) failed to consider that the estimation of agricultural income at Rs. 15,000 per acre by the A.O. has no basis or material evidence and that the agricultural income admitted by the appellant is quite reasonable.
9. The Ld. CIT(A) ought to have appreciated the fact that the cash deposits are nothing but business advances being part of the assessee’s regular business operations and do not come under the purview of income of the assessee.
10. Without prejudice to Ground No. 8 above, the Ld. CIT(A) ought to have considered that the appellant was in receipt of remuneration of Rs.
6,00,000/- during the year under consideration, and thus the sources for the total credits of Rs. 28,83,000/- have been explained by the appellant, and no addition of Rs. 6,71,848/- needs to be made on this count.
11. Without prejudice to Ground Nos. 8 & 9 above, the Ld. CIT(A) ought to have considered that no addition need be made towards credits in the bank account keeping in view the fact that the appellant has sources of funds from returned income in the past 3 to 4 years, which ought to have been telescoped.
12. The appellant may add, alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal.”

Hyderabad, dated 14.11.2025. TYNM/sps
आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-

आदेशधिुसधर / BY ORDER

Sr. Private Secretary
ITAT, Hyderabad