MAHADEO KRISHNA BAAD,KOLHAPUR V. INCOME TAX OFFICER, CIRCLE 1, KOLHAPUR, AAYAKAR BHAVAN, KOLHAPUR

ITA 519/PUN/2025

AI Insights

The case involves an appeal by Mahadeo Krishna Baad against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.18,56,000 to his total income as agricultural income for the Assessment Year 2015-16. The Assessing Officer had initially estimated the agricultural income at Rs.3,00,000, significantly lower than what the assessee declared. The Tribunal considered various evidences including the 7/12 extract of land holding, a study report on agricultural yield, and previous years' declared income. The Tribunal found that while some evidences were insufficient to fully substantiate the declared income, there was merit in adjusting the income to a reasonable estimate based on historical data and partial evidences provided.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314607 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Other Referred Cases: S.L.Basavaraj(HUF) vs. ACIT [2015] 61 taxmann.com 367 (Karnataka)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARISH BIST
• Assessee Lawyers: DEEPAK S. SASAR; ARPIT
• Keywords: Business income; Principle of natural justice

Judgement Text

" आयकर अपीलीय अिधकरण ”एस एम सी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.519/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year: 2015-16 Mahadeo Krishna Baad, 596, E-Ward, Parag Commercial Arcade, B.J.Chowk, Shahupuri, Kolhapur – 416001. V s The Income Tax Officer, Circle-1, Kolhapur. PAN: AASPB2495A Appellant/ Assessee Respondent / Revenue Assessee by Shri Deepak S. Sasar – CA & Shri Arpit D. Dambhare – CA Revenue by Shri Harish Bist – Addl.CIT(DR) Date of hearing 02/04/2025 Date of pronouncement 05/05/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961; dated 07.11.2024for Assessment Year 2015-16. The assessee has raised the following grounds of appeal : ITA No.519/PUN/2025 [A] 2 “1. 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON, COMMISSIONER OF INCOME TAX (APPEALS), NFAC, ERRED IN CONFIRMING THE ADDITION OF AGRICULTURAL INCOME OF RS.18,56,000/- TO THE TOTAL INCOME OF THE APPELLANT 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. ASSESSING OFFICER MADE AN ADDITION OF AGRICULTURAL INCOME OF RS.18,56,000/-, TO THE TOTAL INCOME OF THE APPELLANT WITHOUT REJECTION OF AUDITED BOOKS OF ACCOUNTS U/S 145(3) OF THE INCOME TAX АСТ, 1961. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. ASSESSING OFFICER AND THE HON, COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE UNDER INCOME FROM OTHER SOURCES WITHOUT SPECIFYING PARTICULAR SECTION OF THE INCOME TAX ACT 1961. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. ASSESSING OFFICER AND THE HON. CIT (APPEALS), NFAC, NOT OBSERVED THE PRINCIPLES OF NATURAL JUSTICE BEFORE ADDITION OF AGRICULTURAL INCOME OF RS.18,56,000/-. 5. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, AMEND, ALTER, ABANDON, SUBSTITUTE, VARY AND/OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS DURING THE HEARING OF THE APPEAL.” Submission of ld.AR : 2. Ld.AR for the assessee filed paper book which contains Study Report issued by Dept. of Geography, Sant Damji College, Solapur to support claim of Agricultural Income. Ld.AR submitted that assessee had consistently shown agricultural income as under : ITA No.519/PUN/2025 [A] 3 AY Net Profit % as declared in the Audit Form No.3CD Net Agricultural Income as per the Return of Income included for Rate Purposes only (Rs.) Addition made by the Ld.AO(Rs.) 2014-15 2.07% Rs.13,00,850 No Addition 2015-16 2.55% Rs.21,56,000 Rs.18,56,000 2016-17 1.84% Rs.24,50,000 No Addition 2.1 Ld.AR submitted that the AO has estimated the Agricultural Income only at Rs.3,00,000/- and made addition of Rs.18,56,000/- without any basis. Ld.CIT(A) has confirmed the addition. Ld.CIT(A) has ignored the photographs submitted by the assessee showing agricultural growth. Ld.CIT(A) has ignored the specific details submitted by the assessee. Ld.AR submitted that addition may be deleted. Submission of ld.DR : 3. Ld.DR for the Revenue for relied on the order of the Assessing Officer and ld.CIT(A). Findings & Analysis : 4. We have heard both the parties and perused the records.In this case, assessee had filed Return of Income for A.Y.2015-16 on 31.03.2016 declaring total income of Rs.25,66,820/- and Net Agricultural Income of Rs.21,56,000/-. ITA No.519/PUN/2025 [A] 4 4.1 The ld.CIT(A) held as under : “I have carefully considered the assessment order, the grounds of appeal, and the written submission of the appellant. The appellant supported his claim of agricultural income by stating he owns 107 acres of agricultural land near Sangola, Solapur district, where he grows jawar, various fruits, and vegetables. As proof of land holding, he provided the 7/12 extract and submitted an abstract detailing the crops grown, yield quantity, and total sale proceeds received. He substantiated his income based on the yield as normal, per a study report by the Department of Geography, Solapur, published in 2012. He also argued that the assessing officer could have conducted a field inspection to assess the agricultural income accurately. Additionally, the appellant contended that if the AO accepted the correctness of the business income from trading in tyres and providing vehicle services, there was no basis to assess the agricultural income as income from other sources. 4.2. It is noted that the appellant claimed to have realised Rs.45,85,500 as gross receipts from the sale of agricultural produce but could not furnish any evidence to support the crops grown and harvested and the corresponding sales realized. There was no verifiable piece of evidence such as the name and address of the buyers, the quantity sold, and the rates from time to time. Although the appellant provided the 7/12 extract for land holding and relied on a report from the Department of Geography, Sant Damaji College, Mangalwedha, Solapur, in my view, this is insufficient evidence to support the declared agricultural income.” ITA No.519/PUN/2025 [A] 5 4.2 Thus, ld.CIT(A) has admitted that Assessee submitted the copy of 7/12 extracts. It is also an admitted fact by ld.CIT(A) that Assessee owns 107 Acres of Agricultural Land in Solapur District, where he has grown Jawar, Fruits, Vegetable etc. It is also a fact that during the assessment proceedings, the Assessee had requested the Assessing Officer to depute Income Tax Inspector for carrying out field inspection, however, Assessing Officer has not carried out any field inspection. Ld.CIT(A) has also reproduced five photographs which shows agricultural crops. Ld.CIT(A) has not doubted the genuineness of these evidences submitted by assessee. The entire case of the Revenue is that Assessee has not submitted bills and vouchers for the sale of agricultural produce. It is also a fact that in many places in District Areas, not every agricultural purchase producer issue bills to the farmers. In this case, it is also noted that for the earlier year assessee had shown agricultural income of Rs.13,00,850/- which has been accepted by the Revenue. Thus, it is noted that there is a sudden increase in agricultural income of the assessee i.e.Rs.8,55,150/- as compared to the earlier year. It is noted that Assessing Officer has estimated agricultural income at Rs.3,00,000/- without any basis. We are of the opinion that we can ITA No.519/PUN/2025 [A] 6 consider A.Y.2014-15’s agricultural income to estimate for this year. In these facts and circumstances of the case, we estimate the agricultural income of the Assessee as Rs.16,00,000/- based on the details filed and earlier years income. We find support from the Hon’ble Karnataka High Court’s decision in the case of S.L.Basavaraj(HUF) vs. ACIT [2015] 61 taxmann.com 367 (Karnataka). Accordingly, we direct the Assessing Officer to reduce the addition(Rs.21,56,000/- (-) Rs.16,00,000/- = Rs.5,56,000/-). Thus, AO will restrict the addition to Rs.5,56,000/- only.Therefore, Ground No.1 raised by the assessee is partly allowed. Ground No.2 : 5. Assessee raised the ground that without rejecting books of accounts, Assessing Officer has made addition which is bad in law. However, it is noted that the Assessee in his submission before the Assessing Officer and ld.CIT(A) has admitted that no books of account has been maintained for agricultural income. Assessee admitted that books of account were maintained only for his regular business. Therefore, we do not find any merit in Ground No.2 as no books of accounts were maintained for agricultural income. Accordingly, Ground No.2 raised by the assessee is dismissed. ITA No.519/PUN/2025 [A] 7 Ground No.3 : 5.1 This Ground is general in nature and needs no adjudication, hence dismissed. Ground No.4 : 6. Sufficient opportunities were provided by AO and ld.CIT(A). Assessee also filed submission before AO and ld.CIT(A). Therefore, there is no violation of natural justice. Accordingly, Ground No.4 raised by the assessee is dismissed 7. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on 5th May, 2025. Sd/- Sd/- (VINAY BHAMORE) (DIPAK P.RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 5th May, 2025/ SGR आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. ITA No.519/PUN/2025 [A] 8 आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "