Sanjay Deokisan Lakhotiya Vs DCIT (ITAT Nagpur)
ITAT Nagpur: Farming Output Varies – No Straightjacket Formula for Agricultural Yield- Agricultural Yield Cannot Be Estimated Mechanically- AO’s Reliance on Average Yield Data Faulty -Tribunal Accepts Orange Cultivation Income as Genuine
Assessee, an agriculturist, filed appeal against order of CIT(A) affirming addition of Rs.5,30,252/- u/s 68.
Assessee had disclosed agricultural income of Rs.21,33,000/- as exempt u/s 10(1). AO doubted the quantum of income, obtained reports from Taluka Krishi Adhikari, Chandur Bazar & Taluka Agriculture Officer & concluded that agricultural produce shown was excessive. He restricted production by adopting average yield of 9–14 MT per hectare & treated excess claim as unexplained cash credit u/s 68.
CIT(A) confirmed the addition, holding that Assessee failed to reconcile excess agricultural income vis-à-vis local yield data.
Before Tribunal, Assessee produced copies of land holdings, 7/12 extracts, sale bills of orange fruits, receipts of agricultural produce, letter of Taluka Agriculture Officer showing 10–17 MT per hectare yield, & statements of fellow agriculturists. Tribunal observed that AO had ignored these evidences & proceeded merely on assumptions. It held that agricultural output cannot be estimated mechanically, as yield varies with soil, weather, seed quality, irrigation, pesticides & farming practices. Accordingly, Tribunal deleted addition of Rs.5,30,252/- & allowed appeal in full
