Nakka Kasivisweswara Rao Vs ITO (ITAT Visakhapatnam)
ITAT Vizag Partly Allows Appeal – Nursery Income Estimated @1 Lakh per Acre-CIT(A) Order Modified – Agricultural Income Reassessed at Realistic Level- Government Certificate Prevails over AO’s Assumptions & Arbitrary Estimate
Assessee, engaged in nursery operations under the name “Sri Visweswara Hitech Nursery”, filed return declaring Nil income after claiming net agricultural income of Rs. 22.26 lakh as exempt. AO, during scrutiny, questioned genuineness of agricultural income as no books of account or vouchers were produced. He estimated nursery income at Rs. 60,000 per acre for 20 acres, allowing Rs. 12 lakh as agricultural income & treating the balance Rs. 10.26 lakh as unexplained money u/s 69A.
CIT(A) confirmed the addition holding that Assessee failed to substantiate claim with bills or vouchers. Before Tribunal, it was contended that nursery operations are not comparable to seasonal crops like paddy or wheat, as nurseries in Kadiyam region are globally reputed & yield per acre is much higher. Reliance was placed on agricultural income certificate issued by Revenue Department certifying Rs. 1,00,000 per acre income. Tribunal observed that AO’s estimate of Rs. 60,000 per acre had no basis, while the certificate supported Assessee’s claim. Considering absence of detailed expenditure records, Tribunal estimated agricultural income at Rs. 1,00,000 per acre, totaling Rs. 20 lakh for 20 acres, & restricted addition to Rs. 2.26 lakh instead of Rs. 10.26 lakh.Thus, appeal was partly allowed.
