Prakash Chand Vs ITO (ITAT Chandigarh)
Agricultural Expenditure Fully Bank-Routed—Unexplained Expenditure Theory Rejected- 69C Can’t Apply
ITAT Chandigarh , deleted the addition of ₹38.70 Lakh made by AO as unexplained agricultural expenditure u/s 69C. Assessee, engaged in apple orchard cultivation, declared gross agricultural income of ₹86.01 Lakh & claimed expenditure on Laboure, salary, packing, fertilizers & chemicals, computing agricultural income of ₹47.30 Lakh. AO disallowed the expenditure as non-genuine merely because bills & vouchers were not fully produced, even though entire expenditure was routed through Assessee’s bank account.
Before Tribunal, Assessee produced computation, transaction-wise details, & bank statements submitted earlier before CIT(A), which were ignored. Tribunal held that when source of expenditure is fully explained from known income & all payments are bank-routed, provisions of u/s 69C cannot apply merely because some bills were not produced. Tribunal also noted that identical facts in AY 2020-21 were accepted by AO in scrutiny. Holding that the addition had no factual basis, Tribunal deleted the entire 69C addition & directed AO to re-compute income accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
Aforesaid appeal by assessee for Assessment Year (AY) 2018 19 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 14-08-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) r.w.s. 144B of the Act on 26-04-2021. The sole grievance of the assessee is confirmation of addition of agricultural expenditure u/s 69C for Rs.38.70 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
