Case Law Details
Late Madan Mohan Sharma Vs ITO (ITAT Delhi)
ITAT Delhi held that addition under section 68 towards unexplained income unsustainable as AO failed to consider leased land while assessing the agricultural income.
Facts- The return of the assessee was selected for limited scrutiny. The reason for scrutiny selection was to examine large agricultural income. Based on investigation, AO estimated the agricultural income to be Rs.8000 per bigha. He held that the assessee is holding 77.305 bighas and estimated the agricultural income at Rs.6,18,444/- (77.305 x 8000). Since the assessee had shown agricultural income of Rs.20 lakhs in the return, the ld. AO added the remaining sum of Rs.13,81,556 (Rs.20,00,000 (-) Rs. 6,18,444) as unexplained income u/s 68 of the Act and sought to be taxed at the rate prescribed in section 115BBE of the Act.
CIT(A), considering the fact of lands taken on lease by the assessee, estimated the agricultural income at Rs.10 lakhs and restricted the addition made by the ld. AO to Rs.10 lakhs as against Rs.13,81,556/-. Aggrieved, the assessee is in appeal before us.
Conclusion- Held that the agricultural income figure for 14 acres should be Rs.17.5 lakhs. As against this, the assessee had reported Rs.20 lakhs in his return. It is a fact that even in AY 2015-16, pursuant to the Tribunal order, agricultural income was accepted by the ld. AO only at Rs.15 lakhs. We find that the lower authorities had been considering the agricultural holdings of the assessee including the leased lands only for 12 acres and accordingly had estimated the agricultural income at Rs.15 lakhs in AYs 2012-13, 2013-14 and 2015-16. Hence, we estimate the agricultural income at Rs.15 lakhs for AY 2014-15 also. The ld. AO is directed accordingly.
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