Geeta Vipulkumar Chaudhary Vs ACIT (ITAT Ahmedabad)
Assessee, an individual engaged in agricultural operations, filed her return of income on 16-02-2018 declaring ₹59.27 lakh. The case was selected for scrutiny under CASS. During assessment, AO observed that Assessee had disclosed gross agricultural receipts of ₹1.13 crore & agricultural expenses of ₹37.28 lakh, which amounted to 32.83 % of receipts.
AO, referring to an earlier ITAT decision in Dhirubhai L. Narola & Others, where agricultural expenditure of 40 % of gross receipts had been upheld, held that the assessee’s claim was “too low.” Without rejecting the books or evidence, he estimated agricultural expenses at 40 %, thereby treating ₹8.14 lakh as unexplained expenditure from undisclosed sources. Assessment was completed u/s 143(3) on 06-12-2019 with total income determined at ₹67.41 lakh.
Assessee appealed, but the Additional CIT(A) dismissed the appeal & confirmed the addition, holding that the AO’s estimation based on judicial precedent was reasonable.
Before ITAT, Assessee contended that AO had made the addition solely on presumption without rejecting the evidence produced for actual agricultural expenditure. It was argued that the 40 % benchmark from another case could not be mechanically applied, as agricultural expenses vary widely depending on crop type, irrigation, soil condition, mechanisation, & regional cost factors.
