NAND SINGH,JAIPUR vs. ITO WARD 7(2), JAIPUR, JAIPUR
Facts
The assessee challenged the CIT(A)'s order which sustained additions made by the AO for estimated trading profit of Rs. 2,31,451 and unexplained investment of Rs. 54,27,653 in agricultural land under Section 69A, though an addition for agricultural income was deleted. The assessee provided extensive documentation including loan confirmations, bank statements, and agricultural receipts to substantiate the source of funds and genuineness of transactions.
Held
The Tribunal held that the assessee successfully established the source of investment for the agricultural land, thereby deleting the addition of Rs. 54,27,653. It also found the trading addition of Rs. 2,31,451 unsustainable as it was made on an estimate basis without identifying specific defects in the assessee's regularly maintained books of account, and thus deleted this addition as well.
Key Issues
Whether the trading addition of Rs. 2,31,451 made on an estimate basis without specific defects in books is justified; Whether the addition of Rs. 54,27,653 for unexplained investment in agricultural land under Section 69A is sustainable.
Sections Cited
250, 143(2), 142(1), 69A, 69, 131
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Income Tax Appellate Tribunal, JAIPUR BENCHES, “B” BENCH, JAIPUR
Before: SHRI SANJAY GARG & SHRI RATNESH NANDAN SAHAY
Per Ratnesh Nandan Sahay, Accountant Member:
The present appeal has been preferred by assessee against the order of National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax Appeal (hereinafter referred to as “Ld. CIT(A)”) dated
P a g e | 2 ITA No.357/JPR/2025 Nand Singh
23.01.2025 u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”). 2. The assessee in this appeal has taken following grounds of appeal:- 1. In the facts and circumstances of the case and in law, ld. CIT(A) has erred in confirming the action of the ld. AO, in making addition of Rs. 2,31,451 as trading addition, The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the entire addition made by ld. AO. 2. In the facts and circumstances of the case and in law, ld. CIT(A) has erred in confirming the action of the ld. AO, in making addition of Rs. 54,27,653 under Section 69A. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the entire addition made by ld. AO. 3. The assessee craves his rights to add, amend or alter any of the grounds on or before the hearing. 3. Facts of the case, in brief, are that the case was selected for scrutiny under the CASS Scheme. Accordingly, notice u/s. 143(2) and 142(1) of the Act were issued from time to time in response of which the assessee filed the books of account and other documents which were duly considered by the Assessing Officer (AO), and finally, made the additions as under:- 1. A sum of Rs.2,31,451/- was added to the total income of the assessee by estimating the trading profit after rejecting the books of account maintained by the assessee. 2. The second addition of Rs.54,27,653/- was made on the ground that the assessee had purchased the agricultural land of Rs.1,54,60,000/- with other two co-owners, in which the assessee share was at Rs.54,27,653/- being 1/3rd share in the said property. The AO made the addition on the ground that the sources of investment in the said property could not be explained by the assessee and therefore the same was eligible to be added u/s 69 of the Act. 3. Further agricultural income of Rs.11,00,000/- was also added to the total income of the assessee on the ground that the assessee has failed to file any evidence in support of the agricultural income.
Aggrieved by the order of the AO, the assessee filed appeal before the Ld. CIT(A), who vide the impugned order partly allowed the appeal of the assessee and deleted the addition of Rs.11,00,000/- being the
P a g e | 3 ITA No.357/JPR/2025 Nand Singh agricultural income on the ground that the lands in question are capable of producing high yield and could generate higher income as per government statistics. The Ld. CIT(A), however, sustained the additions made on account of ‘unexplained investment’ and estimating the trading profit. 5. Aggrieved by the order of Ld. CIT(A) the present appeal has been filed before this Tribunal. During the course of hearing before us, the appellant submitted the confirmation of loans received by the assessee and also their statement recorded u/s 131 of the Act, during the course of assessment proceedings undertaken by the AO and also the copies of jamabandi of the lenders reflecting the capacity of the lenders on the basis of their land holdings. The appellant has also submitted through the paper book, the copies of agricultural receipts received during the relevant period by Krishi Upaj Mandi Samiti (Anaj) Jaipur towards sale of agricultural produce by assessee, the copy of bank statement, copy of Girdhavari for the relevant period reflecting the agricultural crops grown and sold by the lenders and also the income tax returns of the assessee for the Assessment Years 2011-12 & 2012-13 to show that the agricultural income was regularly declared by the assessee in his returns. The appellant has finally pleaded before us that all the three ingredients of the loan received by the assessee from various parties i.e. the identity of the parties, their creditworthiness and genuineness of transactions are fully established. Sh. Gaurav Awasthi, JCIT representative of the department on the other hand, supported the order of lower authorities.
P a g e | 4 ITA No.357/JPR/2025 Nand Singh 6. We have considered the rival submissions and we are of the view that the additions made by the AO and partly confirmed by the Ld. CIT(A) were not justified on the ground that the appellant has fully established the source of investment made in the purchase of land amounting to Rs.54,27,653/-, in view of the detailed evidence produced before us. 7. So far the trading addition of Rs.2,31,451/- is concerned the addition was made on estimate basis without pointing out any specific defect in the books of account which was maintained by the assessee on regular basis. The addition on this ground, thus, cannot be sustained. Accordingly, the same is deleted. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 23.03.2026
Sd/- Sd/- (Sanjay Garg) (Ratnesh Nandan Sahay) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 23.03.2026 Mittali, Sr. PS
