Mohammed Azhar Vs ITO (ITAT Hyderabad)
ITAT Hyderabad held that addition of agricultural income as unexplained income under section 68 of the Income Tax Act as documents evidencing ownership of agricultural land now placed on record. Accordingly, matter remanded back to file of AO for fresh adjudication.
Facts- The assessee is an individual. During scrutiny assessment, AO noted that the assessee had disclosed gross receipts of Rs.83,25,256/- from agricultural operations and after claiming expenses of Rs.49,95,154/-, reported net agricultural income of Rs.33,30,102/-. However, as no supporting details were furnished regarding ownership of land, conduct of agricultural operations, or evidences of expenditure, AO treated the gross receipts of Rs.83,25,256/- as unexplained income u/s. 68 of the Act.
CIT(A) dismissed the appeal ex-parte for non-prosecution, observing that the assessee did not avail of repeated opportunities. Being aggrieved, the present appeal is filed.
Conclusion- Held that it is an admitted fact that the assessee did not comply before the Ld. AO as well as the Ld. CIT(A). At the same time, the assessee has now placed on record documents evidencing ownership of 36 acres of agricultural land. On perusal of these documents, it appears that the assessee indeed owns agricultural land, and therefore, the claim of agricultural income cannot be outrightly rejected without proper verification. We are conscious of the fact that the assessee did not avail opportunities earlier. However, given the nature of the issue and to uphold the principles of natural justice, we are of the view that one final opportunity should be granted to the assessee to substantiate his claim. Accordingly, we deem it fit to set aside the impugned order and remit the matter back to the file of AO for fresh adjudication. AO shall provide adequate opportunity of being heard to the assessee and also permit the assessee to file necessary explanations and supporting documentary evidences in respect of ownership of land, conduct of agricultural operations, and expenses incurred. The assessee is also directed to cooperate with the proceedings and file evidences promptly. In the result, the appeal of the assessee is allowed for statistical purposes.
