JAI Singh Vs ITO (ITAT Delhi)
Summary: The appeal by the assessee was directed against the order of the Additional/Joint Commissioner of Income Tax (Appeals), Madurai dated 19.02.2026 for Assessment Year 2016-17. The solitary issue was the addition of Rs.21,62,360/- made by the Assessing Officer under section 68 of the Income Tax Act, 1961.
The assessee submitted that he owned agricultural land measuring 48 acres and that gross agricultural receipts during the relevant period were Rs.57,73,745/-. In the return of income, agricultural income was declared at Rs.79,36,105/- inadvertently after adding expenditure. During assessment proceedings, the assessee furnished details of agricultural land, jamabandi/fard, lease deeds and Form J in support of agricultural receipts. He explained that agricultural expenses of Rs.21,62,360/- had inadvertently been added to agricultural income instead of being reduced from gross agricultural receipts.
The Assessing Officer did not accept the explanation and made an addition of Rs.21,62,360/- under section 68 of the Income Tax Act, 1961. The CIT(A) sustained the addition, observing that although the assessee had furnished a certificate from the professional who had prepared the return and explained that the agricultural expenses were wrongly included while filing the return, no separate evidence was furnished to substantiate the agricultural expenses of Rs.21,62,360/-.
Before the Tribunal, the Department supported the impugned order and prayed for dismissal of the appeal.
The Tribunal examined the orders of the authorities below and the documents furnished by the assessee. It noted that the assessee had furnished documents relating to his agricultural land holding and Form J in support of agricultural receipts. The Assessing Officer himself had recorded that Form J and other documents relating to agricultural activities had been furnished. During proceedings, the assessee also furnished his capital account, balance sheet, revised computation of income and certificate from the professional who had prepared the return, explaining that agricultural expenses of Rs.21,62,360/- had inadvertently been included in agricultural income while filing the return.
The Tribunal found that the mistake in adding agricultural expenditure appeared to be bona fide. It further held that the amount of Rs.21,62,360/- did not represent unexplained cash credit or unexplained income. Referring to section 68, the Tribunal observed that the provision applies to sums found credited in the books for which the assessee offers no satisfactory explanation regarding their nature and source. In the present case, the impugned amount represented agricultural expenditure claimed by the assessee and not an unexplained credit.
The Tribunal also noted that the assessee’s explanation regarding the clerical mistake was supported by the professional’s certificate, capital account, balance sheet and revised computation furnished during proceedings. Merely because separate supporting evidence for each item of agricultural expenditure was not furnished, the amount could not be treated as unexplained income under section 68.
Considering the totality of the facts and circumstances, the Tribunal found merit in the assessee’s contention and held that the nature of the impugned amount and the explanation furnished by the assessee had not been properly appreciated by the lower authorities. The addition of Rs.21,62,360/- made by the Assessing Officer and sustained by the CIT(A) was directed to be deleted. Consequently, the appeal of the assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals), Madurai [in short ‘the CIT(A)’] dated 19.02.2026, for Assessment Year 2016-17.
2. The solitary issue in present appeal is against the addition of Rs.21,62,360/- made by the Assessing Officer (AO) u/s. 68 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). Shri Naveen Gupta, appearing on behalf of the assessee submits that the assessee owns agricultural land admeasuring 48 acres. During the period relevant to assessment year under appeal, the gross agriculture receipts of the assessee were to the tune of Rs.57,73,745/-. The assessee in his return of income declared income from agriculture as Rs.79,36,105/- inadvertently after adding expenditure. In assessment proceedings, the assessee furnished details of agricultural land, jamabandi/fard, lease deeds and Form J in support of the agricultural receipts.
The assessee explained that agricultural expenses of Rs.21,62,360/- had been inadvertently added in the agricultural income instead of reducing the same from gross agricultural receipts. The AO did not accept the explanation and made addition of Rs.21,62,360/- u/s. 68 of the Act. The CIT(A) sustained the addition observing that although the assessee had furnished a certificate from the professional (advocate) who had prepared the return and had explained that the agricultural expenses were wrongly included while filing the return, no separate evidence was furnished to substantiate agricultural expenses of Rs.21,62,360/-.
3. Shri Manoj Kumar, representing the department vehemently supported the impugned order and prayed for dismissing appeal of the assessee.
4. Both sides heard, orders of the authorities below examined. The assessee had furnished documents relating to his agricultural land holding and had also furnished Form J in support of the agricultural receipts. The AO himself recorded that the assessee had furnished Form J and other documents relating to the agricultural activities. Further, during the proceedings, the assessee furnished his capital account, balance sheet, revised computation of income and certificate from the professional who had prepared the return, explaining that the agricultural expenses of Rs.21,62,360/- had inadvertently been included in the agricultural income while filing the return. The mistake in adding expenditure on agricultural appears to be bonafide. In any case, the amount of Rs.21,62,360/- does not represent unexplained cash credit or unexplained income. The provisions of section 68 of the Act are attracted in respect of sums found credited in the books of the assessee for which the assessee offers no satisfactory explanation regarding the nature and source thereof. In the facts of the present case, the impugned amount represents agricultural expenditure claimed by the assessee and not any unexplained credit. Further, the assessee’s explanation regarding the clerical mistake is supported by the certificate of the professional who had prepared the return and the capital account/balance sheet and revised computation furnished during the proceedings. Merely because separate supporting evidence for each item of agricultural expenditure was not furnished, the same could not have been treated as unexplained income under section 68 of the Act. The nature of the impugned amount and the explanation furnished by the assessee have not been properly appreciated by lower authorities. Considering totality of facts and circumstances of the case, I find merit in the contention of the assessee. The addition of Rs.21,62,360/- made by the Assessing Officer and sustained by the CIT(A) is directed to be deleted.
5. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 22nd the Monday of August, 2026.
