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Facts
The assessee declared agricultural income of Rs. 5,67,240. The Assessing Officer, using data from an Agricultural University, estimated a lower agricultural income and added the excess of Rs. 4,81,036 as income from undisclosed sources under Section 68. The CIT(A) confirmed this addition.
Held
The Tribunal noted that agricultural university data might not be fully applicable due to varying conditions and that some of the assessee's documents were self-serving. Considering the smallness of the amount and the agreement of both parties, the Tribunal directed an ad-hoc addition of Rs. 50,000.
Key Issues
The key legal issue was the estimation of agricultural income and whether the excess declared by the assessee constituted income from undisclosed sources.
Sections Cited
Section 68, Section 143(2), Section 143(3), Section 142(1), Section 250
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Income Tax Appellate Tribunal, “SMC”
Before: DR. ARJUN LAL SAINI
(िनधा�रणवष�/Assessment Year: (2017-18) Samir Sarmanbhai Maru The ITO, ward – 1, Plot No. 142, Raj Laxmi Park, Opp. Vs. Aayakar Bhavan, Shakti Chambers, Reliance Mall, Nr. Motibaug, Morbi – 363641 Junagadh (Guj) - 362001 �ायीलेखासं./जीआइआरसं./PAN/GIR No.: AGCPM6848G (अपीलाथ�/Assessee) (��थ�/Respondent) Assessee by : Shri Mehul Ranpura, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 03/12/2025 Date of Pronouncement : 12/01/2026 ORDER Per, Dr. Arjun Lal Saini, A.M.:
Captioned appeal filed by the assessee, pertaining to Assessment Year 2017- 18, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Appeals), dated 20.08.2025, which in turn arises out of an order passed by the Assessing Officer u/s 143(3) of the Act, on 16.12.2019. 2. Grounds of appeal raised by the assessee are as under:
1. The grounds of appeal mentioned hereunder are without prejudice to one another.
Samir Sarmanbhai Maru 2. The Id. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the "CIT(A)"] erred in confirming addition made by AO of Rs.4,81,036/- by estimating production of wheat and coriander at 3640 Kgs and 960 Kgs as against the actual production and thereby treating excess income from agriculture activities as income from undisclosed source on the alleged that the assessee failed to produce sales bills. The addition made and confirmed is bad in law as also on facts therefore the same may kindly be deleted. 3.Your Honour's assessee craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.”
3. Succinctly, the factual panorama of the case is that assessee before me is an individual and filed e-return of income, declaring total income of Rs.4,27,700/- and agriculture income of Rs.5,67,240/-, on 29.03.2018. During the year under consideration, the assessee was partner in M/s Radhe Developers and derived income in form of interest, remuneration and profit from it. Besides, the assessee also derived income from house property & other source. Subsequently, the return of income was selected for limited scrutiny by 'CASS". The E-Notice u/s. 143(2) of the I.T. Act dated 17.08.2018 was therefore issued and duly served upon the assessee by electronic mode as well as by RPAD. Subsequently, e-notices u/s. 142(1) of the Act/questionnaire dated 07.05.2019 was issued and duly served upon the assessee. Another notices u/s 142(1) of the I.T. Act dated 09.07.2019, 29.08.2019, 17.09.2019, 04.10.2019 & 24.10.2019 were also issued and duly served upon the assessee. In response to these notices, the assessee filed e-submissions. In reply, the assessee has furnished profit & loss account, capital account, balance sheet and cash book for the year under consideration. On going through the cash book for the year under consideration, it was found that the assessee has claimed to received gross agriculture income of Rs.8,14,000/- in cash. The assessee has claimed agriculture expenses of Rs.2,46,760/- i.e. 30% of gross agriculture receipts. The assessee's total agriculture land holding is only 1-24-45 hectare i.e. 7.69 Vigha. During the year under consideration, the assessee has claimed to cultivation of winter crops of wheat Page 2 of 6 Samir Sarmanbhai Maru in 3.31 vigha and coriander in 2.74 vigha. As per data collected from Agriculture University, Junagadh, the highest production of wheat per vigha comes to 1100 Kg i.e. 55 Man and coriander production is 350 Kg i.e. 17.50, Man per Vigha in the region of Junagadh District. Considering the area utilized for cultivation of wheat and coriander, the maximum production of wheat comes to 3640 Kg and coriander at 960 Kg. As per data collected from Agriculture University, Junagadh, average sale price of wheat is Rs.347 per man and coriander is Rs. 1,250/- per man in F.Y.2016-17. Hence the sale proceed of these two commodities will be as under: Wheat - 3640 kg x average sale price ie. Rs. 17.35 per Kg =Rs. 63,154/- Coriander-960 kg x average sale 2.50/per Kg i.e. =Rs. 60,000/- Total gross agricultural receipt =Rs.1,23,154/- Less: Agriculture expense =Rs. 36.950/- Net Agriculture income =Rs. 86,204/- Thus, as per assessing officer, the net income from agriculture would come to Rs.86,204/- only. Thus, the excess income of Rs.4,81,036/- (Rs.5,67,240- Rs.86,204/-) from agriculture is the income from the undisclosed sources, as per assessing officer. Therefore, the assessing officer, made addition, in the hands of the assessee, in respect of excess agriculture income of Rs.4,81,036/-, u/s 68 of the I.T. Act.
4. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A) who has confirmed the action of the assessing officer. The Ld.CIT(A) noticed that assessee sold Agricultural land at village Choki, Page 3 of 6 Samir Sarmanbhai Maru Taluko and District Junagarh. He deposited aggregate cash of Rs. 39,65,600 in his bank account. The assessee was asked to explain the source of cash deposits, for that the assessee claimed that he earned 8,14,000/- gross agriculture income in cash and 30% expenses spent. The assessee claimed cultivated intercrops of wheat in 3.31 vigha and coriander in 2.74 vigha. The AO logically explained acreage produce per vigha with the support of agriculture university data in the region of Junagadh and arrived net income of Rs.86,204/- in the light of agriculture university data. Thus, the excess income of Rs.4,81,036 from agriculture was the income from the undisclosed source and therefore, learned CIT(A) confirmed the addition made by the assessing officer.
5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal.
6. Learned Counsel for the assessee, submitted that the only addition made by the assessing officer is to the tune of Rs. 4,81,036/-. It is very small addition, therefore an adhoc and estimated disallowance of Rs. 50,000/- may be made in the hands of the assessee, to protect the interest of the revenue.
7. On the other hand, Ld. DR for the Revenue, fairly agreed that due to smallness of the amount involved, an ad-hoc addition of Rs.50,000/- is sufficient to protect the interest of the revenue.
8. I have heard both the parties and I have carefully considered the facts of the case, the submission of the Learned Counsel for the assessee and ld DR for the Revenue and evidences on record. I note that regarding Agriculture Income earned Page 4 of 6 Samir Sarmanbhai Maru during the previous year relevant to AY 2017-18, the assessee has taken two crops, that is, Kharif and Ravi. The assessee has cultivated groundnut in Kharif Crop season and assessee has cultivated Wheat and Jiru for Ravi Crop season. The assessee has earned total Agriculture Income of Rs. 8, 14,000/- for two crop seasons, which the assessing officer did not accept, and assessing officer used the data collected from Agriculture University, Junagadh, which are not applicable to the assessee, under consideration, as the production of agricultural commodities depends upon climate condition, monsoon condition, weather condition, land condition etc, therefore, university data, which is only for academic purpose, cannot be used in the assessee`s case under consideration. I also, note that assessee took one crop in Kharif Crop on Monsson season and the crop in Ravi season on own source available with him or nearby other agriculturist. However, I note that area of land shown by the assessee in the land holding documents are not sufficient to produce such agricultural income, therefore, I find that some of the documents and evidences submitted by the assessee are self -servicing, evidences and documents, therefore should not be relied fully. However, considering these facts and circumstances, and considering the smallness of the amount, and the fact that both the parties, that is, Ld. DR for the revenue, and Ld Counsel for the assessee, both have agreed that the ad-hoc, estimated addition of Rs. 50,000/- may be made in the hands of the assessee to meet the end of Justice. Accordingly, I direct the assessing officer to make the addition to the tune of Rs. 50,000/-, in the hands of the assesse, by applying normal rate of the Income Tax.
9. Before parting, I make it clear that instant adjudication has been done, by me, considering the smallness of the amount and fact that the both the parties agreed for ad-hoc, estimated addition of Rs.50,000/-, therefore, this adjudication should not be treated as a precedent in the previous year and in subsequent year.
In the result, the appeal of the assessee is partly allowed, in above terms.
Order is pronounced in the open court on 12/01/2026.