SURENDRA BHARAT CHAUGALE,CHIKODI vs. PR. CIT, HUBLI

This appeal by the assessee arises out of the order dated 26-03-2022 passed by the Pr.CIT, Hubli u/s.263 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2017-18.

Briefly stated, the facts of the case are that the assessee is an agriculturist who filed his return declaring total income at Rs.2,90,190/-. Such income was in respect of interest. The assessee had shown gross agricultural receipts of Rs.48,57,345/- and expenses of Rs.6,93,000/-. The AO observed that the agricultural expenses were only 14.26%, which should have been at 35%. On being show caused, the assessee furnished explanation as to how he incurred lower expenses. The AO got satisfied and did not make any addition on this score. Thereafter, the ld. Pr.CIT exercising revisionary power u/s.263 held that the assessee claimed expenses at a lower level against the agricultural receipts and consequently earned undisclosed income. He set-aside the assessment order and directed the AO to frame the assessment afresh. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.

After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee is an agriculturist and has no business income. The only other minor income is in respect of bank interest. The ld. Pr.CIT has made out a case that the assessee declared lower expenses so as to enhance the amount of agricultural income. When the view so canvassed is seen in the backdrop of the fact that the assessee, an agriculturist, was having only agricultural income and no business income, such a presumption of depressing agricultural expenses and earning undisclosed income cannot meet with our concurrence.

Notwithstanding the above, the assessee made detailed submissions before the AO justifying the incurring of expenses at 14.26% by stating that both he and his wife were working in the fields personally, having 5 buffalows and 2 cows etc. and certain other things which saved the cost of agricultural spending. The ld. Pr.CIT has not controverted any of the submissions made by the assessee before the AO. Thus, it cannot be said that the AO adopted a legally and factually unsustainable view, which could have been subjected to revisionary proceedings. We order accordingly and set- aside the impugned order.

In the result, the appeal is allowed.