SATBIR SINGH PUNIA,ROHTAK vs. ITO WARD-3, ROHTAK

आयकर अपीलीय अिधकरण िद�ी पीठ “एस एम सी”, िद�ी �ी िवकास अव�थी, �ाियक सद� IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.138/िद�ी/2024 (िन.व. 2015-16) ITA No.138/DEL/2024 (A.Y.2015-16) Satbir Singh Punia, H. No. 636/21, Main Azadgarh Road, Near Hafed Chowk, Rohtak, Haryana 124001 ...... अपीलाथ�/Appellant PAN: AWHPP-7447-F बनाम Vs. Income Tax Officer Ward-3 ..... �ितवादी/Respondent Aaykar Bhawan, Rohtak 124001 अपीलाथ� �ारा/ Appellant by : Shri Naveen Kumar Goyal, Chartered Accountant �ितवादी�ारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई क� ितिथ/ Date of hearing : 01/10/2024 घोषणा क� ितिथ/ Date of pronouncement : : 27/12/2024 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 27.12.2023, for assessment year 2015-16. 2. Shri Naveen Kumar Goyal, appearing on behalf of assessee submits that the assessee filed return of income for AY 2015-16 declaring business income of Rs. 5,83,150/- u/s. 44AD of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) and agricultural income of Rs.37,15,850/-. The assessee has agricultural income from cultivation of his own land, as well as the land taken on batai/theka (lease). To substantiate agricultural income, the assessee placed on record

2 ITA No. 138/DEL/2024 (AY 2015-16) fard/jamabandi of land indicating assessee’s ownership on agricultural land and also showing that the assessee was cultivating land owned by others. The ld. AR of the assessee further submitted that even in preceding assessment years i.e. 2013- 14 and 2014-15, the assessee in his return of income had reflected agricultural income of Rs.28,00,000 and Rs.12.08 lakhs, respectively. The same was accepted by the Revenue in assessment proceedings u/s. 143(3) of the Act. The ld. AR referred to the return of income for AY 2013-14 at page 74 of the paper book and assessment order dated 30.11.2015 for AY 2013-14 at page 49 of the paper book. He further referred to the return of income for AY 2014-15 at page 102 of the paper book to show agricultural income Rs.12,80,000/- disclosed in the return of income by the assessee. He further pointed that during Financial Year 2014-15, the assessee has cultivated approximately 70 acres of agricultural land and from sale of agricultural produce has earned gross receipts of Rs.37,15,850/-. The assessee in the return of income for impugned assessment year has inadvertently reflected gross receipts from agricultural operations instead of net receipts. During assessment proceedings the assessee revised the computation and declared Net Agricultural income of Rs.18,57,925/- after deduction of expenditure at 50% (approx). During assessment proceedings, the AO disbelieved agricultural income declared by the assessee and restricted agricultural income to Rs.5 lakhs only and made addition of the remaining amount i.e.Rs.32,15,850/-(37,15,850–Rs.5,00,000/- ) as unexplained income. The AO merely on surmises and conjectures has estimated agricultural income of Rs.5 lakhs. 3. Per contra, Shri Sanjay Kumar representing the department vehemently defending the impugned order and assessment order submitted that the assessee during assessment proceedings as well as in proceedings before the CIT(A) has

3 ITA No. 138/DEL/2024 (AY 2015-16) failed to substantiate income from agriculture. The assessee could neither prove expenditure incurred on agricultural operations viz. purchase of seeds, fertilizers, pesticides etc. nor sale of agricultural produce in the market. Further, the assessee has failed to discharge its onus in proving land taken on batai. The ld. DR pointed that the assessee at fag end of assessment proceedings revised agricultural income to Rs.18,57,925/- which itself raises suspicion on the conduct of assessee. 4. Both sides heard, orders of authorities below examined. The short issue in appeal is with regard to agricultural income declared by the assessee being treated as unexplained income. The assessee has declared agricultural income of Rs.37,15,850/- in the return of income. In the absence of any documentary evidence to substantiate agricultural operations and expenditure incurred on agricultural operations and sale of agricultural produce, the AO restricted income from agricultural to Rs.5,00,000/- and made addition of balance amount as unproved income. The assessee in order to prove agricultural operations being carried out has placed on record fard/jamabandi of various parcels of land either owned by the assessee or taken on batai (lease) from different land owners. The assessee has placed on record copies of some of Form J at pages 119 to 123 of the paper book to show sale of agricultural produce during Financial Year 2014-15. I further find that in the preceding assessment years the assessee in return of income has disclosed agricultural income. In AY 2013-14 the assessee in the return of income has disclosed agricultural income of Rs.28,00,000/- and in the return of income for AY 2014-15 the assessee has declared agricultural of Rs.12.80 lakhs. The assessee has also placed on record assessment order passed u/s. 143(3) of the Act for AY 2013-14(at page 49 of the paper book) to substantiate that agriculture income declared by the assessee was accepted by the AO. Thus, it is evident from

4 ITA No. 138/DEL/2024 (AY 2015-16) the past records that the assessee has been declaring agriculture income and impugned assessment years is not the first year wherein the assessee has declared agricultural income. Further, a perusal of fard/jamabandis placed on record indicates that the assessee is an agriculturist and owns agricultural land and has also taken some agricultural land on batai (lease). During assessment proceedings when the assessee was confronted to show expenditure incurred on purchase of fertilizers, seeds, diesel etc. the assessee revised its computation of income restricting its net agricultural income to Rs.18,57,925/- i.e. 50% of the total agriculture income declared in the return of income and claimed remaining amount as expenditure. 5. The documents on record clearly indicate that the assessee had some agricultural income in the past and the same was reflected in the return of income. Even, during the period relevant to assessment year under appeal, the assesee has been able to substantiate availability of substantial agricultural land with the assessee for carrying out agricultural operations. The AO merely on estimations has restricted agricultural income of the assessee to Rs. 5,00,000/- as against income declared by the assessee at Rs.37,15,850/- and added the reaming amount i.e. Rs.32,15,850/- as income from undisclosed sources. I am of considered view that the estimation of agricultural income by the AO is very much on the lower side. The assessee has not been able to substantiate expenditure incurred on purchase of seeds, fertilizers, diesel, petrol required for agricultural operations. Further, the assessee claimed 50% of gross receipts as expenditure without substantiating the same. The said claim of the assessee cannot be accepted either. Considering entire facts of the case, and to rest the issue, the revised net agriculture income offered by the assessee is accepted. The expenditure on agriculture operations is restricted

5 ITA No. 138/DEL/2024 (AY 2015-16) to Rs.10,57,925/- and hold remaining amount i.e. Rs.8,00,000/- as unexplained income. 6. In the result, appeal of the assessee is partly allowed. Order pronounced in the open court on Friday the 27th day of December, 2024. Sd/- Sd/- (VIKAS AWASTHY) �याियक सद�य/JUDICIAL MEMBER िद�ी/Delhi, �दनांक/Dated 27/12/2024 NV/- �ितिलिप अ�ेिषतCopy of the Order forwarded to : 1. अपीलाथ�/The Appellant , �ितवादी/ The Respondent. 2. 3. The PCIT िवभागीय �ितिनिध, आय.अपी.अिध., िद�ी /DR, ITAT, िद�ी 4. 5. गाड� फाइल/Guard file.

BY ORDER, //True Copy//

(Dy./Asstt. Registrar) ITAT, DELHI