Kalur Basappa Shivaprakash Vs ITO (ITAT Bangalore)
Ad-hoc Estimation of Agricultural Income Rejected: ITAT Deletes Section 69A Addition
The assessee declared ₹50 lakh as agricultural income, which the AO partly disbelieved due to lack of bills, inconsistencies in crop details, and alleged improbabilities. The AO estimated income at ₹1 lakh per acre and treated the balance ₹15.55 lakh as unexplained income under Section 69A, alleging it to be a colourable device. The CIT(A) upheld the addition citing absence of supporting evidence as required under Rule 2 of Part IV of Schedule I.
The ITAT noted that agricultural activity itself was not disputed—only the quantum was in question. It held that the AO’s estimation was purely ad hoc without any comparable data or scientific basis. The Tribunal accepted that agriculture operates in an unorganised sector where complete documentation may not always be maintained and emphasized that primary evidence like RTC records and crop details were furnished.
Further, additional evidence such as crop inspection reports and studies on arecanut cultivation supported the assessee’s claim of higher yield. The Tribunal also held that mere variation in estimation cannot justify addition under Section 69A unless there is concrete evidence of non-agricultural income. Allegations based on “human probabilities” without material backing were rejected.
Accordingly, the addition of ₹15.55 lakh was deleted and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The present by the assessee for the A.Y. 2020-21 is directed against the order passed under section of 250 of the Income Tax Act 1961 (hereafter the Act) dated 12th September 2024 by the learned Commissioner of Income Tax-Appeal (hereafter- learned CIT-A) at National Faceless Appeal Centre-NFAC.
