Kalpana Devi Vs ITO (ITAT Ranchi)
₹8.92 Lakh Agricultural Income from 20 Acres Reasonable: Earlier-Year Acceptance and Comparable ITAT Ruling Cannot Be Ignored
Summary: The Ranchi Bench of the Income Tax Appellate Tribunal has allowed an assessee’s claim of ₹8,91,570 as exempt agricultural income from approximately 20 acres of agricultural land.
The Tribunal noted that in the immediately preceding assessment year, the CIT(A) had accepted agricultural income of ₹8 lakh from the same landholding. Further, in another case relating to the same assessment year, the Ranchi Tribunal had estimated agricultural income at ₹1 lakh per acre. Considering these facts, the assessee’s disclosure of about ₹44,579 per acre was held to be reasonable.
The decision was rendered in Kalpana Devi v. ITO, Ward-3(1), Deoghar, ITA No. 72/Ran/2026, Assessment Year 2012-13, order dated 10 September 2026.
Facts of the case
The assessee had disclosed agricultural income of ₹8,91,570 and claimed it as exempt under Section 10(1) of the Income Tax Act.
The assessment was reopened under Section 147. According to the Assessing Officer, the assessee had shown substantial agricultural income as exempt, but had not produced satisfactory evidence supporting such income in the assessment records.
The Assessing Officer completed the reassessment under Section 144 read with Section 147 through an order dated 10 December 2018 and denied the exemption claimed under Section 10(1). The agricultural income was consequently treated as income from other sources.
Appeal dismissed due to delay
The assessee filed an appeal before the CIT(A)/NFAC. However, the appeal was filed after a delay of approximately four years.
The CIT(A) dismissed the appeal in limine on the ground that the assessee had not produced sufficient material to demonstrate that the delay was attributable to a reasonable cause and that there was no negligence, inaction or want of due diligence.
The CIT(A), therefore, did not grant substantive relief concerning the agricultural income.
Aggrieved by the dismissal, the assessee approached the Income Tax Appellate Tribunal.
Assessee’s claim based on earlier assessment year
Before the Tribunal, the assessee pointed out that an identical addition had been made in Assessment Year 2011-12 by disallowing the claim of agricultural income.
For Assessment Year 2011-12, the CIT(A), through an order dated 24 October 2019, had recorded that the assessee possessed approximately 20 acres of agricultural land. Agricultural income was estimated at ₹40,000 per acre, resulting in the acceptance of agricultural income of ₹8 lakh.
The Department did not prefer any further appeal against that order. The determination for Assessment Year 2011-12 had therefore attained finality.
The assessee argued that the facts for Assessment Year 2012-13 were substantially identical. The Revenue could not adopt an inconsistent position without demonstrating any material change in the landholding, cultivation or other relevant circumstances.
Reliance on comparable ITAT decision
The assessee also relied upon the decision of the Ranchi Tribunal in Jay Narayan Kumar v. ACIT, ITA No. 375/Ran/2016, order dated 5 April 2019, which also related to Assessment Year 2012-13.
In that case, the Tribunal had estimated agricultural income at ₹1 lakh per acre. The Department had not challenged that order, and it had attained finality.
The assessee submitted that her disclosed income of ₹8,91,570 from approximately 20 acres worked out to only around ₹44,579 per acre. This was considerably below the benchmark of ₹1 lakh per acre accepted by the Tribunal for the same assessment year in the comparable case.
Therefore, the claim could not be regarded as excessive or unreasonable.
Findings of the Tribunal
The Tribunal accepted the assessee’s submissions.
It noticed that in Assessment Year 2011-12, the CIT(A) had already accepted the assessee’s ownership or possession of approximately 20 acres of agricultural land and estimated agricultural income at ₹40,000 per acre.
The Revenue could neither controvert this fact nor show that an appeal had been filed against the earlier appellate order.
The Tribunal further relied upon its coordinate Bench decision in Jay Narayan Kumar, where agricultural income for Assessment Year 2012-13 was estimated at ₹1 lakh per acre.
Against this factual and judicial background, the assessee’s disclosure of ₹8,91,570 from approximately 20 acres was found to be quite reasonable.
The Tribunal accordingly allowed the claim of agricultural income and allowed the assessee’s appeal.
Principle of consistency
Although the principle of res judicata does not strictly apply to income-tax proceedings, the Revenue cannot ordinarily take a different view in a subsequent year on the same fundamental facts without demonstrating a material change in circumstances.
In the present case, the assessee’s agricultural landholding had already been examined and accepted in the immediately preceding year. Agricultural income of ₹8 lakh had also been accepted on an estimated basis.
For the year under consideration, the assessee declared only ₹91,570 more than the amount accepted in the preceding year. Considering the normal variation in agricultural output, crop prices and yield, the claim was not inherently improbable.
Author’s comments
The decision is useful in cases where agricultural income is rejected merely because the assessee is unable to produce every piece of documentary evidence after a considerable lapse of time.
However, the ruling should not be understood as prescribing ₹1 lakh per acre as a universal or automatic rate of agricultural income. Agricultural yield depends upon several factors, such as the nature of the crop, irrigated or rain-fed land, number of crop cycles, geographical conditions, sale price, cultivation expenditure and whether cultivation was undertaken directly or through tenants.
The stronger foundation of the decision is the combination of two circumstances: the assessee’s 20-acre landholding and agricultural income had already been accepted in the preceding year, and the amount declared in the relevant year was substantially within the range accepted in a comparable Tribunal decision for the same assessment year.
A noteworthy feature is that the CIT(A) had dismissed the appeal in limine because of an approximately four-year delay. The Tribunal nevertheless examined the substantive claim and granted relief on merits. The order does not contain an elaborate discussion separately condoning the delay, but its decision to entertain and allow the appeal effectively prevents a potentially genuine exemption from being denied solely on account of the procedural default.
In practice, an agricultural income claim should preferably be supported by land records, RTC or revenue extracts, evidence of crops grown, sale receipts, mandi records, bank deposits, details of agricultural expenses and, where applicable, confirmation from tenants or purchasers.
At the same time, when the same landholding and a comparable level of agricultural income have been accepted in an earlier year, the Assessing Officer should not reject the claim in a later year without bringing some distinguishing material on record. Consistency does not replace evidence, but accepted past facts cannot be disregarded without justification.
Cases Discussed
- Jay Narayan Kumar Vs ACIT, ITA No. 375/Ran/2016, order dated 05/04/2019, AY 2012-13.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT RANCHI BENCH
1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [in short, the ld. CIT(A)] dated 06/01/2026 for the Assessment Year (AY) 2012-13 wherein the assessee has raised following grounds of appeal:
“1. For the facts and circumstances of the case, CIT(A) is not justified to dismiss the appeal in limine u/s 249 of the I.T. Act.
2. For the facts and circumstances of the case, the agricultural income claimed at Rs. 8,91,570/- should be allowed as such and addition made treating the same as income from other sources is fit to be deleted.
3. The impugned order of CIT(A) is illegal, bad in law and in violation of rudimentary principle of contemporary jurisprudence.
4. That the appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of appeal.”
2. Facts of the case, in brief, are that this case was reopened under Section 147 of the Income Tax Act, 1961 (in short, the Act) and notice under Section 148 of the Act was issued on the ground that the assessee has claimed a sum of ₹ 8,91,570/- as exempt agricultural income but assessment records for the A.Y. 2016-17, it is found that though agricultural income shown as exempt, no evidence was ever produced. Finally, the Assessment under Section 144 read with section 147 of the Act was passed by the Assessing Officer vide its order dated 10/12/2018 and the claim of exemption under Section 10(1) of the Act was denied to the assessee.
3. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the ld. CIT(A), who vide the impugned order dated 06/01/2026 dismissed the appeal of the assessee in limine on the ground that “no material was adduced by the appellant to successfully demonstrate that there was no negligence, inaction, or want of due diligence involved in the inordinate delay of about four years or so in filing this appeal against assessment order of A.Y. 2012-13”.
4. Further aggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal.
5. During the appellate proceedings before us, the ld. Counsel of the assessee submitted a written synopsis on behalf of the assessee which reads as under:
“1. That the sole issue in this impugned appeal is with respect to the claim of agricultural income to the tune of Rs. 8,91,570/- made by the AO and confirmed by the Ld CIT(A) vide the impugned order.
2. That the plain reading of the assessment order it can be seen that proceedings U/s 148 was initiated in line with that for the immediate previous AY 2011-12 and the order of assessment was passed in parallel and confirmed by the Ld CIT(A).
3. That for the previous AY 2011-12, identical addition for disallowing the claim of agricultural income was made by the Ld AO, however in appeal, Ld CIT(A) vide order dated 24/10/2019, copy of which is attached herewith at Page 03-07 has held that the assessee is in possession of about 20 acre of agricultural land and that an estimate amount of Rs. 40,000/- per acre as agricultural income would be reasonable. Accordingly the appeal of the assessee for AY 2011-12 was partly allowed in above terms. No further appeal has been preferred by the revenue against the said order and thus the same has attained finality.
4. That since assessment for the year under consideration was framed in parallel to that of the AY 2011-12, Ld CIT(A) cannot have different view point on the same and identical issue without differentiating on the facts.
5. That moreover the coordinate Bench of this tribunal in the case of Jay Narayan Kumar Vs ACIT in ITA No 375/Ran/2016 dated 05/04/2019, for AY 2012-13, copy of which is attached herewith at Page 08-12 has categorically estimated agricultural income @ Rs. 1,00,000/- per acre for AY 2012-13. No further appeal has been preferred by the revenue against the said order and thus the same has attained finality.
6. That this the appeal of the assessee relates to AY 2012-13 wherein the Hon’ble Bench in case of Jay Narayan Kumar (Supra) has estimated agricultural income of Rs. 1,00,000/- per acre in the year under consideration, the assessee having disclosed Rs. 8,91,570/- against about 20 acre of land was reasonable enough and the claim should have been allowed.
As such, the addition of Rs. 8,91,750/- made by the AO and confirmed by Id CIT(A) disallowing the claim of agricultural income to the assessee is unjustified and should be deleted.”
6. On the other hand, the ld. Sr.DR supported the orders of the lower authorities.
7. We have considered the rival submissions and it is found that the Coordinate Bench of this Tribunal in the case of Jay Narayan Kumar Vs ACIT in ITA No. 375/Ran/2016 dated 05/04/2019 for the A.Y. 2012-13 has categorically estimated agricultural income at the rate of ₹ 1.00 lacs per acre against which the revenue did not go in further appeal and therefore, the same was attained its finality. Since the Coordinate Bench of this Tribunal has already estimated the agricultural income of the assessee at ₹ 1.00 lac per acre, the assessee’s disclosure of ₹ 8,91,570/- against the 20 acres of land in the impugned assessment year is quite reasonable and therefore, the claim made by the assessee should be allowed. Moreover, from the documents on record, it can be seen that for the previous year i.e. A.Y. 2011-12, the ld. CIT(A) vide its order dated 24/10/2019 had estimated agricultural income of ₹ 8,00,000/- in the hands of the assessee and partially allowed the appeal. The revenue could not counter the same or bring on record if any, appeal has been preferred against the said order passed by the ld. CIT(A) in A.Y. 2011-12. In view of the above, respectfully following the decision of the Coordinate Bench in the case of Jay Narayan Kumar Vs ACIT (supra), the claim of agricultural income in the impugned assessment year is found to be reasonable and therefore, the claim made by the assessee is allowed.
8. In the result, this appeal of the assessee is allowed.
Order pronounced in open court on 10/09/2026.
