Kanakapura Venkataramanaswamy Madhusudhan Karthik Vs ITO (ITAT Bangalore)
ITAT Bangalore remands addition U/s 69A on alleged bogus agricultural income; directs fresh verification of evidence
In this case, the Bangalore ITAT dealt with disallowance of agricultural income of ₹29.86 lakh, which was treated by the AO as unexplained money u/s 69A. The assessee had claimed such income as exempt u/s 10(1) from cultivation of coconut and guava on 5.75 acres of land (owned by father).
AO rejected the claim based on multiple factors :
- Land was not in assessee’s name, and no formal right to cultivate was proved
- Entire sales allegedly made to a single buyer (“Kumar”), without PAN/address
- Cash transactions without proper supporting evidence
- Production figures significantly higher than horticulture department data
- Inadequate evidence for expenses like labour, fertilizer, transport
Accordingly, exemption was denied and amount taxed u/s 69A r.w.s. 115BBE. The CIT(A) upheld the addition citing lack of reliable evidence.
Before the Tribunal, the assessee produced land records, sale invoices, and expense details, contending that agricultural activity was genuine and that section 69A was wrongly invoked.
ITAT held that:
- The assessee had placed some supporting material on record, which was not comprehensively verified by the AO
- The addition was made largely on assumptions (yield comparison, incomplete verification) rather than full factual examination
- Proper verification of land use, production, sales, and expenses was necessary
Accordingly, in the interest of justice, the Tribunal set aside the CIT(A)’s order and restored the matter to the AO for fresh verification, directing:
