Samir Sarmanbhai Maru Vs ITO (ITAT Rajkot)
Agricultural Income Estimation Scaled Down: ITAT Rajkot Restricts Addition to ₹50,000 on Ad-hoc Basis
The Rajkot Bench of the ITAT partly allowed the appeal for AY 2017-18 by substantially reducing the addition made on account of alleged excess agricultural income. The Assessing Officer had rejected the assessee’s claim of net agricultural income of ₹5.67 lakh and, relying on crop-yield and price data collected from Agriculture University, Junagadh, estimated the net agricultural income at only ₹86,204. The balance amount of ₹4.81 lakh was treated as unexplained income under section 68, which was confirmed by the CIT(A).
Before the Tribunal, it was noted that agricultural yield depends on several variable factors such as land quality, climate and irrigation, and university data prepared for academic purposes cannot be mechanically applied to an individual assessee’s case. At the same time, the Tribunal observed that the landholding disclosed by the assessee was not fully commensurate with the agricultural income claimed and some of the evidences were self-serving.
Considering the smallness of the disputed amount and the fact that both the assessee and the Revenue agreed to an ad-hoc resolution, the ITAT restricted the addition to ₹50,000, to be taxed at normal rates. The balance addition was deleted. The Tribunal clarified that the relief was granted on the peculiar facts and consent of parties and should not be treated as a precedent for other years or cases.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
