Jamgagi Laxman Siddappa Huf Vs ITO (ITAT Panaji)
Authorities Must Examine Evidence Before Disbelieving Farm Income – Agricultural Income Addition Remanded for Fresh Verification- ITAT Panaji
Assessee, an HUF running a nursing & maternity home, declared agricultural income of ₹36.63 lakh in its return for A.Y. 2016-17. The case was selected for limited scrutiny to verify the genuineness of the agricultural income. AO, unsatisfied with the evidences for landholding, crop sales & expenditure, disbelieved the claim & assessed total income at ₹46.87 lakh, treating the entire agricultural receipts as non-agricultural income.
On appeal, CIT(A) upheld AO’s view, observing that Assessee failed to substantiate crop yield, buyers’ details, or agricultural activity proofs.
Before ITAT, Assessee contended that both lower authorities ignored substantial evidences & confirmations placed on record & were denied a fair hearing.
ITAT found that CIT(A) had not properly considered the evidences & confirmations filed by Assessee. It held that both AO & CIT(A) should have verified the factual material before disallowing the claim. In line with principles of natural justice, one more opportunity was warranted for proper examination.
Matter remanded to AO for fresh verification of agricultural income claim with directions to examine evidences & provide adequate opportunity to Assessee.
