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Facts
The assessee declared agricultural income of Rs. 26,20,240/- for AY 2016-17, which was a significant increase from the previous year. The Assessing Officer disallowed Rs. 20,65,295/- of this income, considering it excess. The CIT(A) upheld this disallowance.
Held
The Tribunal found that the Assessing Officer and CIT(A) did not dispute the fact that the assessee, along with his brother, jointly owned and cultivated agricultural land. The assessee had provided details of agricultural produce and expenses, which were not disproved. The increase in income was attributed to the brother not taking his share in that particular year.
Key Issues
Whether the disallowance of a significant portion of agricultural income and related expenses was justified, despite the assessee providing supporting evidence and explanations.
Sections Cited
250, 143(1), 143(2)
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: MS. SUCHITRA R. KAMBLE & SHRI BIJAYANANDA PRUSETH, ACCOUNTNAT MEMBER
IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (Hearing Through Hybrid Mode) BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTNAT MEMBER Assessment Year: 2016-17 Vinubhai Keshavbhai Rabadiya, Income-Tax Officer, 38, Bharat Nagar Society, Ward 3(3)(1), L.H. Road, Varachha, बनाम/ Surat Surat-395006 Vs. [PAN : ACFPP 2904 D] (Appellant) (Respondent) Assessee by Shri Kamlesh Pandya, CA Revenue by Shri Ajay Uke, Sr DR Date of Hearing 20.11.2025 Date of Pronouncement 03.12.2025 आदेश/ O R D E R PER MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER :
This appeal is filed by the Assessee against the order dated 12.03.2025 passed by the Addl/JCIT(A)-8, Mumbai [hereinafter referred to as “CIT(A)” for short] u/s 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act” for short] for Assessment Year 2016-17. 2. The Assessee has raised following grounds of appeal :-
1. Learned CIT(A) erred in making order by upholding addition made by ITO without considering facts, circumstances of our case and submission made by us during appeal proceedings even though agriculture income and expense duly explained with supporting evidence.
2. Learned CIT(A) erred in upholding deemed addition made by ITO, because once we duly explained genuineness of agriculture income along with supporting evidence, the onus sifts on the Assessing Officer to falsify the said material or bring new material on record. Mere rejection of good explanation does not convert good proof into no proof.”
3. The assessee filed the return of income for AY 2016-17 on 28.03.2017 declaring total income of Rs.1,39,620/-. The assessee had shown net agricultural Vinubhai Keshavbhai Rabadiya Vs. ITO AY : 2016-17 [2] income of Rs.26,20,240/-. The return was duly processed u/s 143(1) of the Act and was selected for Limited Scrutiny Assessment to examine whether the claim of agricultural income was correct, considering the larger agricultural income in comparison to total income. Accordingly, notice u/s 143(2) of the Act was issued on 19.09.2017 and thereafter subsequent statutory notices were issued to the assessee which were replied to by the assessee. The assessee also filed details of agricultural income along with the balance-sheet and other details of agricultural income. The Assessing Officer observed that, during the immediately preceding year i.e. 2015-16, the assessee had shown net agricultural income of Rs.4,04,995/-; whereas for AY 2016-17 he had shown net agricultural income of Rs.26,20,240/-. Thus, there was an increase of Rs.22,15,245/-. The Assessing Officer made addition of Rs.20,65,295/-, by disallowing the alleged excess agricultural income.
Being aggrieved by the assessment order, the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that in this particular assessment year i.e. AY 2016- 17, the assessee who was possessing agricultural land with his brother, had declared the agricultural income including that of the income earned from the entire land cultivation without bifurcating the share of his brother, as his brother has not taken any agricultural share in this particular year. Thus, the increase was not hypothetical, but arose because his brother has not taken his share of the agricultural income. The Ld. AR further submitted that the assessee has large agricultural land along with his brother and they were jointly cultivating it since so many years and, therefore, the bills which were produced by the assessee should have been taken into account by the Assessing Officer as well as CIT(A).
Ld. DR pointed out that the assessee did not properly explain his agricultural income and had not presented any details of the land transactions. The Ld. DR relied upon the order of the CIT(A) and the assessment order. Vinubhai Keshavbhai Rabadiya Vs. ITO AY : 2016-17 [3]
We have heard both the parties and perused all the relevant material available on record. The Assessing Officer as well as CIT(A) do not dispute the fact that the assessee, along with his brother, is holding either parcels of land, out of which 3 pieces of land are held by the assessee exclusively and 5 pieces of land are jointly owned with his brother, father and mother. The assessee is also cultivating a cash crop i.e. sugarcane and has sold the same to the Sahakari Mandali and has produced all the details about the agricultural produce in the previous year as well as in the present assessment year i.e. AY 2016-17 before both the authorities. These details were not disputed either by the Assessing Officer or by the CIT(A). The details of his brother’s share for the previous year were also given by the assessee, including the Income-tax Returns for the present assessment year. These factual details were not at all disputed by the Assessing Officer or by the CIT(A). Merely stating that the assessee has declared higher agricultural income in the present year cannot deny the benefit of exclusion of agricultural income which was genuinely earned by the assessee in the present assessment year. The observations of the CIT(A) that the vouchers were self-made in respect of expenses appears to be not justifiable. The details given by the assessee before us categorially reveal that the assessee has incurred those expenses for cultivating the cash crop. Thus, the expenses disallowed by the Assessing Officer was also not justifiable. Therefore, the appeal of the assessee is allowed.