Manoj Kumar Agarwal Vs AO NFAC (ITAT Agra)
Reopening based on election affidavit quashed; agricultural income partly accepted: ITAT Agra delivers split verdict
Agra ITAT delivered a composite ruling, partly sustaining addition on agricultural income for AY 2015-16, while quashing the entire reassessment for AY 2017-18.
For AY 2015-16, the Assessee declared agricultural income of ₹20.14 lakh, claiming cultivation over 100.66 bighas comprising his own land and land owned by his brother. The AO accepted agricultural income only in respect of land owned by the Assessee and estimated income at ₹8,000 per bigha, treating the balance as income from other sources. The Tribunal held that mere confirmation from the brother was insufficient to prove cultivation of the brother’s land by the Assessee. However, acknowledging that agricultural operations were not doubted, the ITAT adopted a proportionate approach, accepting agricultural income relatable to land owned by the Assessee (₹11.30 lakh) and sustaining addition of the balance (₹8.84 lakh). The appeal for AY 2015-16 was thus partly allowed.
For AY 2017-18, the Tribunal quashed the reassessment proceedings in toto. The reopening was initiated solely on the basis of disclosures made by the Assessee in his election affidavit, alleging escapement of income in respect of unsecured loans of ₹1.23 crore. The ITAT held that the reasons recorded were vague, lacked any tangible material, failed to show that loans were received during the relevant year, and amounted to a mere fishing and roving enquiry. It further noted that the issue of unsecured loans had already been examined in the original scrutiny assessment u/s 143(3), making the reopening a clear case of change of opinion.
Additionally, the approval granted u/s 151 was held to be mechanical and based on incorrect statutory assumptions, rendering the assumption of jurisdiction invalid. Relying on Kelvinator of India Ltd., NC Cables Ltd., S. Goyenka Lime & Chemical Ltd. and other precedents, the ITAT quashed the reassessment and deleted the entire addition u/s 68.
Accordingly, the appeal for AY 2017-18 was fully allowed, while the appeal for AY 2015-16 was partly allowed
FULL TEXT OF THE ORDER OF ITAT AGRA
1. The appeals in ITA Nos. 54 & 76/AGR/2025 for AYs 2015-16 & 2017-18, arises out of the order of the Jt. Commissioner of Income Tax (Appeals)-9, Mumbai [hereinafter referred to as „ JCIT(A)’, in short] dated 12.12.2024 for AY 2015-16 and against the order of the NFAC, Delhi dated 31.01.2025 for AY 2017-18 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act’) dated 14.12.2017 for AY 2015-16 by DCIT, Circle-4(2)(1) and passed u/s 147 r.w.s. 144 r.w.s. 144B dated 30.03.2022 for AY 2017-18 (hereinafter referred to as „ld. AO’).
