Bhanwarlal Champalal Kanunga Vs PCIT (ITAT Ahmedabad)
AO Already Examined Agricultural Income, PCIT Cannot Substitute His Opinion- 263 Quashed; PCIT Cannot Rely on Past Year to Revise Current Assessment – 263 Set Aside by Ahmedabad Bench
Ahmedabad Tribunal in quashed revisionary order u/s 263 by holding that AO had made due enquiries into agricultural income claim & accepted Assessee’s explanation, hence PCIT could not revise the order merely for taking a different view.
Assessee, an individual, filed return declaring total income of Rs.63.44 lakh & exempt agricultural income of Rs.1.16 crore. The case was selected for complete scrutiny to verify agricultural income & loans. AO issued several notices u/s 142(1) calling for crop records, sale bills, cash flow, bank statements, details of land at Sanchor (Rajasthan), & agreement with cultivator. Assessee furnished replies with documentary evidence, including arrangement with Shri Govindbhai Purshottambhai Patel under which cultivator bore expenses & Assessee received 59% of produce. AO issued show cause questioning doubling of jeera production despite reduced land area. Assessee explained yield variation with supporting records. After examining details, AO accepted the claim & framed order u/s 143(3) at returned income.
PCIT invoked u/s 263 holding assessment erroneous & prejudicial since no agricultural expenses were recorded despite large exempt income. He doubted genuineness of land purchase agreement & cultivator arrangement, & applied yield norms of Spices Board to allege inflated production. Referring to A.Y. 2017-18 where 40% of receipts were treated as unexplained expenditure u/s 69C, he directed fresh assessment & initiation of penalty u/s 271AAC.
