C.SHANMUGARAJ (HUF),KANGEYAM vs. ITO WARD 2(4), SALEM

Both the appeals of the assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals) -3, Coimbatore, dated 27.09.2018 and pertain to assessment years 2013-14 and 2014-15. Since common issue arises for consideration in both the appeals, I heard these appeals together and disposing the same by this common order.

There was a delay of 115 days in filing these appeals by the assessee. The assessee has filed petitions for condonation of delay. I have heard the Ld.counsel for the assessee and the Ld. D.R. I find that there was sufficient cause for not filing these appeals before the stipulated time. Therefore, I condone the delay and admit the appeals.

The only issue arises for consideration is estimation of agricultural income.

Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee cultivated 19.17 acres of land and disclosed income therefrom at ₹20 lakhs. The Assessing Officer, however, restricted the agricultural income at ₹8,64,000/-. However, on appeal by the assessee, the CIT(Appeals) estimated net agricultural income at ₹65,000/- per acre. On query from the Bench, the Ld.counsel clarified that apart from coconut trees, the assessee was also cultivating turmeric, sugarcane and paddy. The Ld. counsel submitted that a reasonable estimation may be made from agricultural income.

On the contrary, Shri K. Hari Govind, the Ld. Departmental Representative, submitted that on the basis of the report received from the Inspector of Income-tax, the Assessing Officer reasonably estimated income from agriculture at ₹8,64,000/-. In fact, according to the Ld. D.R., the Assessing Officer has taken note of standing coconut trees and average yield therefrom per tree. The Assessing Officer estimated income from coconut at ₹9,10,000/- per year. According to the Ld. D.R., the Assessing Officer has also taken note of available cows and income from sub-products from the coconut trees and reasonably estimated the agricultural income after reducing the expenditure, at ₹8,64,000/-. Moreover, according to the Ld. D.R., the CIT(Appeals) was fair enough in taking note of the cultivation of other crops such as turmeric, sugarcane and paddy and estimated the income reasonably at ₹65,000/- per acre. Therefore, according to the Ld. D.R., no interference is called for.

I have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the assessee is cultivating 19.17 acres of land. The Assessing Officer deputed his Inspector and on the basis of the report filed by the Inspector, the Assessing Officer found that there are 700 standing coconut trees. That means 10 acres of land was cultivated with coconut trees and the balance of 9.17 acres of land appears to have been cultivated with turmeric, sugarcane and paddy. However, the assessee has not produced adangal extract from the State Revenue Department to prove the fact of cultivation. The CIT(Appeals) found that the land was classified as wetland. This fact is not in dispute. The observation of the CIT(Appeals) that the assessee cultivated turmeric, sugarcane and paddy apart from coconut trees is also not disputed by the Revenue. In those circumstances, this Tribunal is of the considered opinion that estimation of agricultural income at ₹75,000/- per acre instead of ₹65,000/- per acre would meet the ends of justice. Had the Revenue disputed the fact of cultivation of turmeric, sugarcane and paddy as observed by the CIT(Appeals), the matter would stand on different foot. Since this fact as observed by the CIT(Appeals) is not disputed, this Tribunal is of the considered opinion that the assessee would have earned ₹75,000/- per acre as net agricultural income from cultivation. Therefore, the orders of both the authorities below are modified and the Assessing Officer is directed to take ₹75,000/- per acre as income from cultivation.

In the result, both the appeals filed by the assessee are partly allowed.