GEETA VIPULKUMAR CHAUDHARY,MEHSANA vs. THE ACIT, CIRCLE MEHSANA, MEHSANA
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the addition of Rs. 8,14,054 on account of agricultural expenses could not be sustained. The Tribunal reasoned that while the ITAT had upheld 40% agricultural expenses in the case of Shri Dhirubhai L. Narola & Others, this did not automatically imply that agricultural expenses in every case must be 40%. Agricultural expenses can vary based on factors like land area, crop type, mechanization, and irrigation. The Tribunal noted that the Assessing Officer neither disputed the gross agricultural receipts nor found fault with the evidence for the claimed expenses. The disallowance was based on presumption, and no evidence was presented to show that the assessee incurred additional expenses of Rs. 8,14,054. Therefore, the addition was deleted. The appeal of the assessee was allowed.
What were the facts?
The assessee, Geeta Vipulkumar Chaudhary, filed her return of income for Assessment Year 2017-18 on February 16, 2018, declaring an income of Rs. 59,27,350. Her case was selected for scrutiny. The Assessing Officer (AO) noted that the assessee claimed agricultural expenses of Rs. 37,28,364 against gross agricultural receipts of Rs. 1,13,56,045, which amounted to 32.83%. The AO, relying on a previous ITAT decision in the case of Shri Dhirubhai L. Narola & Others which upheld 40% agricultural expenses, determined that the assessee's expenses should be 40% of gross receipts. This led to an addition of Rs. 8,14,054 as excess expense incurred out of undisclosed income. The assessment was completed under Section 143(3) on December 6, 2019, at a total income of Rs. 67,41,404. The assessee's appeal to the Additional/Joint Commissioner of Income Tax (A)-1, Nashik, was dismissed. The assessee filed the present appeal before the ITAT.
What were the issues?
1. Whether the addition of Rs. 8,14,054, made by estimating agricultural expenses at 40 percent of gross agricultural income instead of the 32.83 percent actually incurred by the assessee, is legally sustainable? (Question of law and fact, turning on Section 143(3) of the Income Tax Act, 1961). Assessee's contentions: The assessee argued that there was no basis for the addition, as it was based on mere presumption without rejecting the evidence submitted. The assessee contended that a decision in a third-party case regarding agricultural expenses cannot be automatically applied to the present case. Revenue's contentions: The revenue relied upon the orders of the lower authorities.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order of the Additional/Joint Commissioner of Income Tax (A)-1, Nashik (in short “the Addl. CIT(A)”) dated 30.12.2024 for the Assessment Year (A.Y.) 2017-18 in the proceedings under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
There was a delay of 94 days in filing of the appeal. The assessee had explained that the delay was for the reason that she was out of the country at the relevant period and her accountant also could not attend (Assessment Year: 2017-18) Geeta Vipulkumar Chaudhary vs. ACIT Page 2 of 5 the matter in time due to medical issues. Considering the explanation of the assessee, the delay in filing the appeal is condoned.
The brief facts of the case are that the assessee had filed her return of income for the A.Y. 2017-18 on 16.02.2018 declaring income of Rs.59,27,350/-. The case was selected for scrutiny under CASS. In the course of assessment, the Assessing Officer found that the assessee had shown gross agricultural receipt of Rs.1,13,56,045/- against which agricultural expense of Rs.37,28,364/- was claimed. The Assessing Officer found that the agricultural expense was only 32.83% of the gross agricultural receipt, which was low considering the fact that the ITAT in the case of Shri Dhirubhai L. Narola & Others had upheld the agricultural expense of 40% of the gross agricultural receipt. Accordingly, the Assessing Officer held that the agricultural expense incurred by the assessee should be 40% of the gross agricultural receipt and accordingly the excess expense of Rs.8,14,054/- was held as incurred out of undisclosed income of the assessee. The assessment was completed under Section 143(3) of the Act on 06.12.2019 at a total income of Rs.67,41,404/-.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. Additional/joint CIT(A) vide the impugned order and the appeal of the assessee was dismissed.
The assessee is now in second appeal before us. The following grounds have been taken in this appeal: - (Assessment Year: 2017-18) Geeta Vipulkumar Chaudhary vs. ACIT Page 3 of 5
1. The Honourable CIT(A) erred in law and on facts confirming addition of Rs.8,14,054/- by estimating agriculture expenses at 40 percent of gross agriculture income instead of 32.83 percent actually incurred by assessee. The addition made by the Honourable CIT(A) deserves to be deleted. The same be deleted now.
2. The Honourable CIT(A) has erred in not properly appreciating the facts, various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order ex-parte due to non-attendance confirming high pitched addition.
3. The order passed by the Honourable CIT(A) is illegal, invalid and bad in law. It be so held now.
4. The appellant craves leave to add, amend, alter, delete, change or modify any or all grounds of appeal before or at the time of the hearing.”
6. Shri Deepak R. Shah, Ld. AR of the assessee submitted that there was no basis for making addition of Rs.8,14,054/- on account of agricultural expense by treating such expense to be at 40% of gross agricultural receipt, instead of 32.83% as actually incurred by the assessee. He submitted that the addition was based on mere presumption and without rejecting the evidences brought on record by the assessee in this regard. He further submitted that the decision of the Ld. Tribunal in respect of agricultural expense in a third-party case cannot be automatically applied to the present case.
Per contra, Shri B.P. Srivastava, Ld. Sr. DR relied upon the orders of the lower authorities.
We have carefully considered the rival submissions. In the course of assessment, the assessee had brought on record evidences for agricultural expense of Rs.37,28,364/- incurred by her, which was 32.83% of the gross agricultural receipt. Merely because the Tribunal had upheld (Assessment Year: 2017-18) Geeta Vipulkumar Chaudhary vs. ACIT Page 4 of 5 the agricultural expense @ 40% of the gross agricultural receipt in another case of Shri Dhirubhai L. Narola & Others, it does not automatically imply that the agricultural expense in every case will be @ 40% only. The agricultural expense may vary from case to case depending upon multifarious factors viz. area of land under cultivation, nature of crop, level of mechanization, use of fertilizers and pesticides, irrigation facilities etc. In the present case, the Assessing Officer neither disputed the gross agricultural receipt disclosed by the assessee nor found fault with the evidences for agricultural expense brought on record by the assessee. The disallowance made by the Assessing Officer is found to be based on mere presumption and no evidence was brought on record to establish that the assessee had incurred additional agricultural expense of Rs.8,14,054/-. Therefore, the addition as made by the AO can’t be sustained. Accordingly, the addition of Rs.8,14,054/- on account of agricultural expenses, is deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on this 7th October, 2025.
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