MR MANISH JAGDISH BAJAJ,MUMBAI V. PCIT-41, MUMBAI

ITA 2758/MUM/2025

AI Insights

The case involves Mr. Manish Jagdish Bajaj, the appellant, who filed an appeal against the revision order passed by the PCIT, Mumbai-41, concerning the assessment year 2020-21. The PCIT had revised the original assessment order, which accepted the appellant's return of income, claiming it was erroneous and prejudicial to the interests of the Revenue. The primary contention was regarding the non-examination of agricultural income reported by the appellant. The Tribunal examined whether the PCIT's revision was justified and whether the original assessment had indeed overlooked critical aspects of the appellant's agricultural income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706162 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: Sahas Roy vs. CIT, Sarifabibi Mohmed Ibrahim vs. CIT, Raghunandan Prasad Singh vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A DHYANI
• Assessee Lawyers: SUCHEK ANCHALIYA
• Keywords: Set aside; Opportunity of being heard; Corroborative evidences; Assessment record; Revision of order
• Section: 143(3); 142(1); 263

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 2758/MUM/2025 Assessment Year: 2020-21 Mr. Manish Jagdish Bajaj Flat No. 605,606, 6th Floor, Farm Manor CHS Adarsh Colony, Marve Road, Malad (West), Mumbai- 400064 Vs. PCIT-41, Mumbai Room No. 541, Kautilya Bhava, C-41 to C-43, G Block, Bandra Kurla Complex, Bandra (East), Mumbai- 400051 PAN NO. AGHPB 6661 P Appellant Respondent Assessee by : Mr. Suchek Anchaliya Revenue by : Mr. R A Dhyani, CIT-DR Date of Hearing : 12/06/2025 Date of pronouncement : 30/06/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against revision order dated 28.03.2025 passed by the Ld. Commissioner of Income-tax, Mumbai-41 [in short ‘the Ld. PCIT’] for assessment year 2020-21, whereby the assessment order passed by the assessment unit Income-tax Department for A.Y. 2020-21 was held to be erroneous in so far as it was prej grounds raised by the assessee are reproduced as under: “1. The Ld. PCIT erred in passing order u/s 263 of the 1961. 2. The Ld. PCIT erred in passing order u/s 263 without considering facts & circumstances of the case & without giving reasonable opportunity to the appellant. 3. The appellant craves your honours leave to add to amend or to withdraw any of the above grounds of appeal on or before final hearing.” 2. Briefly stated, facts of the case are that the assessee return of income on 1,41,39,170/-. The return of income selected for limited scrutiny on the issue of agriculture income and credit of brought forward tax deducted at source. Accordingly statutorily notices under the Income tax Act, 1961 ( in short ‘the Act’) were issued and complied and assessment u/s 143 Act was completed on 25.08.2022 return of income was accepted. Subsequently Ld. PCIT called for the assessment record and assessing officer did not examine and omission has resulted in under Accordingly, the Ld. PCIT issued notice u/s 263 of the Income Tax Act asking the assessee as why the held as erroneous in revenue. The assessee submitted that the Assessing O made complete enquiry on the issue of agriculture income and therefore order of the assessing officer is sustainable in law but the in so far as it was prejudicial in the interest of the Revenue. The grounds raised by the assessee are reproduced as under: “1. The Ld. PCIT erred in passing order u/s 263 of the Income Tax Act, 2. The Ld. PCIT erred in passing order u/s 263 without considering facts & circumstances of the case & without giving reasonable opportunity to the appellant. 3. The appellant craves your honours leave to add to amend or to any of the above grounds of appeal on or before final facts of the case are that the assessee return of income on 13.02.2021 declaring total income of Rs. . The return of income filed by the selected for limited scrutiny on the issue of agriculture income and credit of brought forward tax deducted at source. Accordingly statutorily notices under the Income tax Act, 1961 ( in short ‘the ct’) were issued and complied and assessment u/s 143 Act was completed on 25.08.2022 wherein income declared in return of income was accepted. Subsequently Ld. PCIT called for the and after examination he was of the view that did not examine the issue of agricul and omission has resulted in under-assessment of income. the Ld. PCIT issued notice u/s 263 of the Income Tax asking the assessee as why the assessment order held as erroneous in so far as prejudicial to the he assessee submitted that the Assessing O made complete enquiry on the issue of agriculture income and therefore order of the assessing officer is sustainable in law but the Manish Jagdish Bajaj 2 ITA No. 2758/MUM/2025 udicial in the interest of the Revenue. The grounds raised by the assessee are reproduced as under: Income Tax Act, 2. The Ld. PCIT erred in passing order u/s 263 without considering facts & circumstances of the case & without giving reasonable 3. The appellant craves your honours leave to add to amend or to any of the above grounds of appeal on or before final facts of the case are that the assessee filed its declaring total income of Rs. by the assessee was selected for limited scrutiny on the issue of agriculture income and credit of brought forward tax deducted at source. Accordingly statutorily notices under the Income tax Act, 1961 ( in short ‘the ct’) were issued and complied and assessment u/s 143(3) of the wherein income declared in return of income was accepted. Subsequently Ld. PCIT called for the after examination he was of the view that issue of agricultural income assessment of income. the Ld. PCIT issued notice u/s 263 of the Income Tax assessment order might not be to the interest of the he assessee submitted that the Assessing Officer had made complete enquiry on the issue of agriculture income and therefore order of the assessing officer is sustainable in law but the Ld. PCIT rejected the contention of the assessee a as erroneous in so far as for the reasons, firstly was filed before the assessing officer, done by assessee, thirdly work was made efore the registration and therefore cannot be established that those paym farm’, fourthly, certificate of agriculture income of last three years from jurisdictional Te setaside the order of the A out verification as directed in the order u/s 263 relevant findings of the PCIT is reproduced as under: “5. The submissi tenable for following reason: (i) The assessee claimed to have purchased agriculture land between 26 August 2019 to 11 September 2019 as 'ready farm of vegetables mainly Ginger & Tomato and got into an understanding with local farmers to maintain the farm for Rs.2,00,000/ index-1 & 2 of the land registration document wherein in no such details about land is mentioned and no other document was produced to sustaintiate su (ii) The assessee during assessment proceeding have claimed only wage expense of Rs. 2,00,000/ proceeds of Rs.34,43,680/ of seeds fertilizers, powers, warehousing cost transportation cost etc, are claimed. Further, these expenses are paid to two persons, namely Mr. Prabhakar Shelke & Mr. Kaluram and the same were paid before registration of land and therefore it can't be established as payment towards maintenance of 'ready farm' which were (iii) Since assessee claims to have purchased ready farm of vegetables it cannot be said that assessee had cultivated the Ld. PCIT rejected the contention of the assessee and held erroneous in so far as prejudicial to the interest of the revenue firstly, no document in respect of was filed before the assessing officer, secondly, no cultivation was thirdly, payment made to two persons efore the registration and therefore cannot be established that those payment were for maintenance of ‘ready certificate of agriculture income of last three years from jurisdictional Tehsildar was not filed. The Ld. PCIT accordingly der of the Assessing officer with the direction to carry directed in the order u/s 263 relevant findings of the PCIT is reproduced as under: “5. The submission of the assessee is considered and is found not tenable for following reason: The assessee claimed to have purchased agriculture land between 26 August 2019 to 11 September 2019 as 'ready farm of vegetables mainly Ginger & Tomato and got understanding with local farmers to maintain the farm for Rs.2,00,000/-. However, assessee submitted only 1 & 2 of the land registration document wherein in no such details about land is mentioned and no other document was produced to sustaintiate such undertaking. (ii) The assessee during assessment proceeding have claimed only wage expense of Rs. 2,00,000/- out of total sale proceeds of Rs.34,43,680/-. No other expenses, such as cost of seeds fertilizers, powers, warehousing cost transportation etc, are claimed. Further, these expenses are paid to two persons, namely Mr. Prabhakar Shelke & Mr. Kaluram and the same were paid before registration of land and therefore it can't be established as payment towards maintenance of 'ready farm' which were not yet owned. (iii) Since assessee claims to have purchased ready farm of vegetables it cannot be said that assessee had cultivated the Manish Jagdish Bajaj 3 ITA No. 2758/MUM/2025 nd held the order prejudicial to the interest of the revenue o document in respect of details of land o cultivation was payment made to two persons for labour efore the registration and therefore cannot be maintenance of ‘ready certificate of agriculture income of last three years not filed. The Ld. PCIT accordingly ssessing officer with the direction to carry of the Act. The relevant findings of the PCIT is reproduced as under: on of the assessee is considered and is found not The assessee claimed to have purchased agriculture land between 26 August 2019 to 11 September 2019 as 'ready farm of vegetables mainly Ginger & Tomato and got understanding with local farmers to maintain the . However, assessee submitted only 1 & 2 of the land registration document wherein in no such details about land is mentioned and no other document (ii) The assessee during assessment proceeding have claimed out of total sale . No other expenses, such as cost of seeds fertilizers, powers, warehousing cost transportation etc, are claimed. Further, these expenses are paid to two persons, namely Mr. Prabhakar Shelke & Mr. Kaluram and the same were paid before registration of land and therefore it can't be established as payment towards maintenance of (iii) Since assessee claims to have purchased ready farm of vegetables it cannot be said that assessee had cultivated the produce and hence not falls in the ambit of provision of section 2(1A) of the Act. (iv) The assessee has not submitted agriculture income of last three Revenue years from jurisdictional Tehsildar, The income of Rs.34,43,680/ 9.8 acre of rain fed land in only half the Revenue year is unusually high and there is no document in support of such high yield by the assessee. Sale receipts in Bazar Samiti only certify sale, it doesn't certify agriculture by the assessee. 6. From above fact it is clear that assessee is not fulfilling the conditions to claim exemption of agriculture income and is disallowable u/s.2(1A) of the Act. 7. As discussed above and as per the provisions of section 263 of the Income Tax Act, I hereby set aside the impugned assessment order dated 25.08.2022 with a direction to the Assessing Officer to carry out due verificat pass fresh assessment order after considering the issues and factual submission made by the assessee. Needless to state, the Assessing Officer shall give the assessee reasonable opportunity of being heard and pass a s consideration the explanation and supporting evidence submitted by the assessee.” 3. Before us the Ld. counsel for the assessee filed a paper book containing pages 1-79 and 1 4. Before us ld. counsel for the assessee the paper book containing 1 Assessing officer had made details enquiry in agriculture income. He 13 and submitted that the assessee had filed on the queries raised by A income. Ld. counsel s in question has been purchased by produce and hence not falls in the ambit of provision of section 2(1A) of the Act. (iv) The assessee has not submitted any 'certificate of agriculture income of last three Revenue years from jurisdictional Tehsildar, The income of Rs.34,43,680/ 9.8 acre of rain fed land in only half the Revenue year is unusually high and there is no document in support of such yield by the assessee. Sale receipts in Bazar Samiti only certify sale, it doesn't certify agriculture by the assessee. 6. From above fact it is clear that assessee is not fulfilling the conditions to claim exemption of agriculture income and is disallowable u/s.2(1A) of the Act. 7. As discussed above and as per the provisions of section 263 of the Income Tax Act, I hereby set aside the impugned assessment order dated 25.08.2022 with a direction to the Assessing Officer to carry out due verification, as mentioned above and thereafter pass fresh assessment order after considering the issues and factual submission made by the assessee. Needless to state, the Assessing Officer shall give the assessee reasonable opportunity of being heard and pass a speaking order after taking into consideration the explanation and supporting evidence submitted by the assessee.” Ld. counsel for the assessee filed a paper book 79 and 1-19. Before us ld. counsel for the assessee referred to page No. 4 of the paper book containing 19 pages and submitted that the ssessing officer had made details enquiry in He further referred to paper book page No. 11 13 and submitted that the assessee had filed detailed explanation raised by Assessing officer on the issue of agriculture income. Ld. counsel specifically submitted that the agriculture l in question has been purchased by way of the registered sale Manish Jagdish Bajaj 4 ITA No. 2758/MUM/2025 produce and hence not falls in the ambit of provision of any 'certificate of agriculture income of last three Revenue years from jurisdictional Tehsildar, The income of Rs.34,43,680/- from 9.8 acre of rain fed land in only half the Revenue year is unusually high and there is no document in support of such yield by the assessee. Sale receipts in Bazar Samiti only certify sale, it doesn't certify agriculture by the assessee. 6. From above fact it is clear that assessee is not fulfilling the conditions to claim exemption of agriculture income and is 7. As discussed above and as per the provisions of section 263 of the Income Tax Act, I hereby set aside the impugned assessment order dated 25.08.2022 with a direction to the Assessing Officer ion, as mentioned above and thereafter pass fresh assessment order after considering the issues and factual submission made by the assessee. Needless to state, the Assessing Officer shall give the assessee reasonable opportunity peaking order after taking into consideration the explanation and supporting evidence submitted Ld. counsel for the assessee filed a paper book referred to page No. 4 of 9 pages and submitted that the respect of the to paper book page No. 11- detailed explanation ssessing officer on the issue of agriculture submitted that the agriculture land of the registered sale agreement. He submitted negotiation of the purchase & Tomato were sown in the agricultural field immediately thereafter the assessee purchased the said agricultural land and paid the amount of Rs. 2,00,000/ whom land was purchased for maintenance of the crop. According to the Ld. Counsel, the said farmers were paid for labour charges for maintaining the crop. The Ld. counsel submitted that t cheque of Rs. 2,00,000/ land. However, subsequently the entire payment was made to two famers and therefore the advance cheque labour charges for maintenance of crop counsel the land was cultivated by the assessee using the services of the labour of those two farmers. The Ld. counsel further submitted that all details including evidence in support of the ownership of the land Regarding the finding of the Ld. PCIT last three years agriculture income, t submission of the assessee filed before the assessing officer since assessee had purchased land therefore assessee was not in the position to give details of the agriculture income of the last three years of the earlier owners. Ld. Counsel submitted that Ld. PCIT wrongly. According to him been carried out by the assessee using hired labourers. submitted that the assessee was in the proce of the purchase at the time of particular & Tomato were sown in the agricultural field ( i.e. small plants) immediately thereafter the assessee purchased the said agricultural amount of Rs. 2,00,000/- to two farmers whom land was purchased for maintenance of the crop. According the said farmers were paid for labour charges for maintaining the crop. The Ld. counsel submitted that t . 2,00,000/- were paid as advance of purchase of the land. However, subsequently the entire payment was made to two and therefore the advance cheque was adjusted against for maintenance of crop. Thus, according to the Ld. land was cultivated by the assessee using the services of the labour of those two farmers. The Ld. counsel further all details including evidence in support of the ownership of the land were filed before the assessing officer the finding of the Ld. PCIT of not providing details of the three years agriculture income, the Ld. counsel referred to the submission of the assessee filed before the assessing officer since assessee had purchased land in the year under consi herefore assessee was not in the position to give details of the agriculture income of the last three years of the earlier owners. Ld. submitted that Ld. PCIT has understood the ready fa ccording to him, majority of the process of cultivation has been carried out by the assessee using hired labourers. Manish Jagdish Bajaj 5 ITA No. 2758/MUM/2025 assessee was in the process of at the time of particular crop of Ginger ( i.e. small plants) and immediately thereafter the assessee purchased the said agricultural to two farmers from whom land was purchased for maintenance of the crop. According the said farmers were paid for labour charges for maintaining the crop. The Ld. counsel submitted that the initial as advance of purchase of the land. However, subsequently the entire payment was made to two was adjusted against according to the Ld. land was cultivated by the assessee using the hired services of the labour of those two farmers. The Ld. counsel further all details including evidence in support of the filed before the assessing officer. of not providing details of the he Ld. counsel referred to the submission of the assessee filed before the assessing officer that in the year under consideration, herefore assessee was not in the position to give details of the agriculture income of the last three years of the earlier owners. Ld. has understood the ready farm , majority of the process of cultivation has been carried out by the assessee using hired labourers. Ld. counsel submitted that there is had made all enquires on issue and dispute and therefore order of the Ld. PCIT needs to be setaside. On the other hand Ld. relieved on the order of the Ld. PCIT. 5. We have heard the rival submissions advanced on behalf of both parties and carefully perused the material available on record, including the orders passed by the low selected for scrutiny with the specific objective of examining the agricultural income declared by the assessee. In the revisional proceedings initiated under Section 263 of the Act, the Learned PCIT held that the assessment or Officer was both erroneous and prejudicial to the interests of the Revenue. The basis for such a finding was twofold: firstly, that the Assessing Officer failed to make requisite inquiries with respect to the claim of agricultur erroneously accepted without proper verification. 5.1 Insofar as the allegation of lack of inquiry by the Assessing Officer is concerned, a perusal of the notice issued under Section 142(1) of the Act dated 06.1 Officer had raised extensive and specific queries pertaining to the assessee’s claim of agricult sought information regarding:  the nature and type of agricultural activities undertaken; submitted that there is no error in the order of the Ld.AO and he had made all enquires on issue and dispute and therefore order of T needs to be setaside. On the other hand Ld. relieved on the order of the Ld. PCIT. We have heard the rival submissions advanced on behalf of both parties and carefully perused the material available on record, including the orders passed by the lower authorities. The case was selected for scrutiny with the specific objective of examining the agricultural income declared by the assessee. In the revisional proceedings initiated under Section 263 of the Act, the Learned PCIT held that the assessment order passed by the Assessing Officer was both erroneous and prejudicial to the interests of the Revenue. The basis for such a finding was twofold: firstly, that the Assessing Officer failed to make requisite inquiries with respect to the claim of agricultural income; and secondly, that the claim was erroneously accepted without proper verification. Insofar as the allegation of lack of inquiry by the Assessing Officer is concerned, a perusal of the notice issued under Section 142(1) of the Act dated 06.11.2021 reveals that the Assessing Officer had raised extensive and specific queries pertaining to the assessee’s claim of agricultural income. The queries, sought information regarding: the nature and type of agricultural activities undertaken; Manish Jagdish Bajaj 6 ITA No. 2758/MUM/2025 no error in the order of the Ld.AO and he had made all enquires on issue and dispute and therefore order of T needs to be setaside. On the other hand Ld. DR We have heard the rival submissions advanced on behalf of both parties and carefully perused the material available on record, er authorities. The case was selected for scrutiny with the specific objective of examining the agricultural income declared by the assessee. In the revisional proceedings initiated under Section 263 of the Act, the Learned der passed by the Assessing Officer was both erroneous and prejudicial to the interests of the Revenue. The basis for such a finding was twofold: firstly, that the Assessing Officer failed to make requisite inquiries with respect to al income; and secondly, that the claim was Insofar as the allegation of lack of inquiry by the Assessing Officer is concerned, a perusal of the notice issued under Section 1.2021 reveals that the Assessing Officer had raised extensive and specific queries pertaining to the ural income. The queries, inter-alia, the nature and type of agricultural activities undertaken;  ownership and location details of the agricultural land;  irrigation facilities;  sale proceeds of the agricultural produce, along with confirmation from the purchasers;  evidences of expenses incurred, including labour charges, inputs, and transport;  documentary proof in respect of source of investment in the land, and  reasons for the substantial increase in agricultural income in the relevant year. 5.2 On a holistic reading of the questionnaire issued by the Assessing Officer, it is evident that the inquiry superficial nor perfunctory. On the contrary, it covered all material aspects relevant to the issue in question. officer duly asked the assessee to provide details of the agriculture income of last three assessment year for all details of ownership documentary evidence in support of the sale of the agriculture produce; evidence in support of charges and other expenses enquires on the issue which ought to have been made by the Ld.AO. 5.3 Those enquires raised by the assessing officer was duly responded by the assessee assessee is reproduced as ownership and location details of the agricultural land; irrigation facilities; sale proceeds of the agricultural produce, along with confirmation from the purchasers; evidences of expenses incurred, including labour charges, inputs, and transport; ntary proof in respect of source of investment in the reasons for the substantial increase in agricultural income in the relevant year. On a holistic reading of the questionnaire issued by the Assessing Officer, it is evident that the inquiry superficial nor perfunctory. On the contrary, it covered all material aspects relevant to the issue in question. We find that assessing the assessee to provide details of the agriculture income of last three assessment years. Similarly the Ld.AO ask for all details of ownership of the agricultural land documentary evidence in support of the sale of the agriculture evidence in support of purchase of the seeds; charges and other expenses etc. In our opinion Ld.AO raised all the enquires on the issue which ought to have been made by the Ld.AO. Those enquires raised by the assessing officer was duly responded by the assessee. The relevant detailed submission of the is reproduced as under:- Manish Jagdish Bajaj 7 ITA No. 2758/MUM/2025 ownership and location details of the agricultural land; sale proceeds of the agricultural produce, along with evidences of expenses incurred, including labour charges, ntary proof in respect of source of investment in the reasons for the substantial increase in agricultural income in On a holistic reading of the questionnaire issued by the Assessing Officer, it is evident that the inquiry was neither superficial nor perfunctory. On the contrary, it covered all material find that assessing the assessee to provide details of the agriculture s. Similarly the Ld.AO asked of the agricultural land ; kind of crops; documentary evidence in support of the sale of the agriculture purchase of the seeds; labour Ld.AO raised all the enquires on the issue which ought to have been made by the Ld.AO. Those enquires raised by the assessing officer was duly . The relevant detailed submission of the “D. With respect agriculture income during the year consideration, we are submitting following details as required by your good self. 1. Our agricultural income is through sales of vegetables mainly ginger and tomato. We have taken up ready farm of mainly ginger and tomato. We got into an understanding with the local farmers (2 of them) from whom we have purchased these lands since they had the knowhow and technical knowledge of farming. For the first year they would maintain the farm for agreed amount of Rs.200000 until the produce is ready for harvesting. 2. Measurement of the total land is 9.875 acres. 3. The agricultural land is owned land. 4. The land is rain fed and has small rain fed water pond and 2 hand pumps. There is a 27 acre lake of within 2 km radius and the famous Ulhas river within 1.5 km of our property. However currently our requirement is fulfilled by internal sources only. 5. The land is situated in Raigad District, Pin code 6. Details of agricultural sa provided by your good self is enclosed herewith. (Annexure 7. We would like to state that entire payment towards agriculture sale proceeds are received in bank. Bank statements highlighting payment received are enclo 8. There was no any outstanding amount towards sale of agriculture proceeds as on 31.03.2020. 9. We have sold agriculture proceed to registered BMC license holders. Proof of receipt of agriculture proceeds are enclosed herewith. (Annex 10. As mentioned above, we have taken up ready farm with readily grown vegetables mainly ginger and tomato and got into an understanding with the farmers from whom we had purchased the land since they had the knowhow and technical knowledge of farming that for the first year we pay them Rs.200000/ maintain the farm until the produce is ready for harvesting. Proof of payment made of purchased agriculture land are enclosed herewith. (Annexure Produced sale pro who are licensed in municipal market arranged pickup from our Karjat farm and also the harvest labour as mentioned in their receipts in Annexure have been deducted and 11. We have purchased agriculture land in the year under reference. This is the first year of agriculture income. Details of “D. With respect agriculture income during the year consideration, we are submitting following details as required by your good self. Our agricultural income is through sales of vegetables mainly ginger and tomato. We have taken up ready farm of mainly ginger and tomato. We got into an understanding with the local farmers (2 of them) from whom we have purchased these lands since they had the knowhow and technical knowledge of farming. For the first year they would maintain the farm for agreed amount of Rs.200000 until the produce is ready for Measurement of the total land is 9.875 acres. The agricultural land is owned land. The land is rain fed and has small rain fed water pond and 2 hand pumps. There is a 27 acre lake of irrigation department within 2 km radius and the famous Ulhas river within 1.5 km of our property. However currently our requirement is fulfilled by internal sources only. The land is situated in Raigad District, Pin code-410201. Details of agricultural sale proceeds received as per the format provided by your good self is enclosed herewith. (Annexure We would like to state that entire payment towards agriculture sale proceeds are received in bank. Bank statements highlighting payment received are enclosed herewith. (Annexure-3) There was no any outstanding amount towards sale of agriculture proceeds as on 31.03.2020. We have sold agriculture proceed to registered BMC license holders. Proof of receipt of agriculture proceeds are enclosed herewith. (Annexure-4) As mentioned above, we have taken up ready farm with readily grown vegetables mainly ginger and tomato and got into an understanding with the farmers from whom we had purchased the land since they had the knowhow and technical knowledge of hat for the first year we pay them Rs.200000/ maintain the farm until the produce is ready for harvesting. Proof of payment made of Rs.200000/- to farmer from whom we have purchased agriculture land are enclosed herewith. (Annexure Produced sale process was again outsourced and the vendors who are licensed in municipal market arranged pickup from our Karjat farm and also the harvest labour as mentioned in their receipts in Annexure-4. All travelling and transportation expenses have been deducted and only net amount has been paid to us. We have purchased agriculture land in the year under reference. This is the first year of agriculture income. Details of Manish Jagdish Bajaj 8 ITA No. 2758/MUM/2025 “D. With respect agriculture income during the year consideration, we are submitting following details as required by your good self. Our agricultural income is through sales of vegetables mainly ginger and tomato. We have taken up ready farm of vegetables mainly ginger and tomato. We got into an understanding with the local farmers (2 of them) from whom we have purchased these lands since they had the knowhow and technical knowledge of farming. For the first year they would maintain the farm for an agreed amount of Rs.200000 until the produce is ready for The land is rain fed and has small rain fed water pond and 2 irrigation department within 2 km radius and the famous Ulhas river within 1.5 km of our property. However currently our requirement is fulfilled by 410201. le proceeds received as per the format provided by your good self is enclosed herewith. (Annexure-2). We would like to state that entire payment towards agriculture sale proceeds are received in bank. Bank statements highlighting 3) There was no any outstanding amount towards sale of agriculture We have sold agriculture proceed to registered BMC license holders. Proof of receipt of agriculture proceeds are enclosed As mentioned above, we have taken up ready farm with readily grown vegetables mainly ginger and tomato and got into an understanding with the farmers from whom we had purchased the land since they had the knowhow and technical knowledge of hat for the first year we pay them Rs.200000/- to maintain the farm until the produce is ready for harvesting. Proof to farmer from whom we have purchased agriculture land are enclosed herewith. (Annexure-5) cess was again outsourced and the vendors who are licensed in municipal market arranged pickup from our Karjat farm and also the harvest labour as mentioned in their 4. All travelling and transportation expenses only net amount has been paid to us. We have purchased agriculture land in the year under reference. This is the first year of agriculture income. Details of payment made towards purchase of agriculture land along with its sources of investment are enc 12. Total income during the financial year 2019 Income from Business, Income from Capital Gain which includes Short Term Capital Gain on Sale of Shares and Income from Other Sources which includes Agricultural Inc FDR with Bank and Bank Interest. 13. We have not availed any credit facilities hence we do not have kisaan credit card. 14. Details of agriculture sales proceed in bank are enclosed.( Annexure-7) 15. Copy of bank statement to sup enclosed herewith. (Annexure E. As mentioned above, we have purchased agriculture land in year under reference and this is first year of agriculture income.” 5.4 We note that the assessee filed detailed responses in reply to the said notice, furnishing documentary evidence in support of its claim. It was submitted that the assessee had acquired 9.875 acres of agricultural land during the year under consideration and had engaged local farmers cultivation of crops, specifically ginger and tomato. A payment of ₹2,00,000/- was made towards maintenance of the crops, and harvesting as well as sale of the produce was undertaken through licensed vendors, with payments received via banking channels. The assessee furnished copies of land records, sale invoices, bank statements, confirmation from purchasers, and proof of expenses incurred, in support of the agricultural activity. submitted that this was the first year of agricultural operations and, therefore, no comparative data from previous assessment years existed. In our considered view, the details furnished by the payment made towards purchase of agriculture land along with its sources of investment are enclosed herewith. (Annexure 12. Total income during the financial year 2019-2020 includes Income from Business, Income from Capital Gain which includes Short Term Capital Gain on Sale of Shares and Income from Other Sources which includes Agricultural Income, Dividend, Interest on FDR with Bank and Bank Interest. 13. We have not availed any credit facilities hence we do not have kisaan credit card. 14. Details of agriculture sales proceed in bank are enclosed.( 15. Copy of bank statement to support the claim has been enclosed herewith. (Annexure-8) E. As mentioned above, we have purchased agriculture land in year under reference and this is first year of agriculture income.” We note that the assessee filed detailed responses in reply to said notice, furnishing documentary evidence in support of its claim. It was submitted that the assessee had acquired 9.875 acres of agricultural land during the year under consideration and had engaged local farmers—possessing requisite expertise tivation of crops, specifically ginger and tomato. A payment of was made towards maintenance of the crops, and harvesting as well as sale of the produce was undertaken through licensed vendors, with payments received via banking channels. ssessee furnished copies of land records, sale invoices, bank statements, confirmation from purchasers, and proof of expenses incurred, in support of the agricultural activity. The assessee also submitted that this was the first year of agricultural operations and, therefore, no comparative data from previous assessment years existed. In our considered view, the details furnished by the Manish Jagdish Bajaj 9 ITA No. 2758/MUM/2025 payment made towards purchase of agriculture land along with losed herewith. (Annexure-6) 2020 includes Income from Business, Income from Capital Gain which includes Short Term Capital Gain on Sale of Shares and Income from Other ome, Dividend, Interest on 13. We have not availed any credit facilities hence we do not have 14. Details of agriculture sales proceed in bank are enclosed.( port the claim has been E. As mentioned above, we have purchased agriculture land in year under reference and this is first year of agriculture income.” We note that the assessee filed detailed responses in reply to said notice, furnishing documentary evidence in support of its claim. It was submitted that the assessee had acquired 9.875 acres of agricultural land during the year under consideration and had possessing requisite expertise—for tivation of crops, specifically ginger and tomato. A payment of was made towards maintenance of the crops, and harvesting as well as sale of the produce was undertaken through licensed vendors, with payments received via banking channels. ssessee furnished copies of land records, sale invoices, bank statements, confirmation from purchasers, and proof of expenses The assessee also submitted that this was the first year of agricultural operations and, therefore, no comparative data from previous assessment years existed. In our considered view, the details furnished by the assessee were not only responsive to the qu also supported by verifiable documentation. Thus, the finding of the Learned PCIT that no or inadequate inquiry was conducted by the Assessing Officer is factually untenable and contrary to the record. 6. The next issue that arises for c income declared by the assessee qualifies as \"agricultural income\" as defined under Section 2(1A) of the Act. The said provision defines agricultural income to include, inter alia, any income derived from land situated in India by way of rent or revenue or from the performance of agricultural operations on such land. 6.1 The Hon’ble Supreme Court, in Sahas Roy [(1957) 32 ITR 466 (SC)], laid down the cardinal principles governing what constitutes agricultural income, emphasising that basic agricultural operations such as tilling, sowing, watering, and harvesting, and subsequent operations like weeding and tending to crops, are integral components. In Sarifabibi Mohmed Ibrahim v. CIT held that the determinative test is the actual user of land for agricultural purposes and not merely the ownership thereof. Further, the decision of the Hon’ble Patna High Court in Raghunandan Prasad Singh income earned merely by purchasing standing crops and reselling assessee were not only responsive to the queries raised but were also supported by verifiable documentation. Thus, the finding of the Learned PCIT that no or inadequate inquiry was conducted by the Assessing Officer is factually untenable and contrary to the record. The next issue that arises for consideration is whether the income declared by the assessee qualifies as \"agricultural income\" as defined under Section 2(1A) of the Act. The said provision defines agricultural income to include, inter alia, any income derived from land situated in India and used for agricultural purposes, whether by way of rent or revenue or from the performance of agricultural operations on such land. The Hon’ble Supreme Court, in CIT v. Raja Benoy Kumar [(1957) 32 ITR 466 (SC)], laid down the cardinal principles governing what constitutes agricultural income, emphasising that basic agricultural operations such as tilling, sowing, watering, and harvesting, and subsequent operations like g to crops, are integral components. In Sarifabibi Mohmed Ibrahim v. CIT [(1993) 204 ITR 631 (SC)], it was held that the determinative test is the actual user of land for agricultural purposes and not merely the ownership thereof. n of the Hon’ble Patna High Court in Raghunandan Prasad Singh [(1944) 12 ITR 375 (Pat)] clarifies that income earned merely by purchasing standing crops and reselling Manish Jagdish Bajaj 10 ITA No. 2758/MUM/2025 eries raised but were also supported by verifiable documentation. Thus, the finding of the Learned PCIT that no or inadequate inquiry was conducted by the Assessing Officer is factually untenable and contrary to the record. onsideration is whether the income declared by the assessee qualifies as \"agricultural income\" as defined under Section 2(1A) of the Act. The said provision defines agricultural income to include, inter alia, any income derived from and used for agricultural purposes, whether by way of rent or revenue or from the performance of agricultural CIT v. Raja Benoy Kumar [(1957) 32 ITR 466 (SC)], laid down the cardinal principles governing what constitutes agricultural income, emphasising that basic agricultural operations such as tilling, sowing, watering, and harvesting, and subsequent operations like g to crops, are integral components. In Smt. [(1993) 204 ITR 631 (SC)], it was held that the determinative test is the actual user of land for agricultural purposes and not merely the ownership thereof. n of the Hon’ble Patna High Court in CIT v. Raja [(1944) 12 ITR 375 (Pat)] clarifies that income earned merely by purchasing standing crops and reselling them would not qualify as agricultural income, in the absence of any cultivation activity. 6.2 However, in the present case, the assessee has demonstrably established that cultivation was carried out but through hired labour and local farmers engaged for this purpose. The settled law, as reiterated in Roy (supra), is that it is not essential for the assessee to perform the agricultural operations personally; it is sufficient if such operations are carried out under his supervision through hired labour or agents. 6.3 The records reveal that the a but also actively participated in the agricultural process through engagement of labour, and has provided evidence of sale of the agricultural produce and corresponding receipts. In this view of the matter, the agricultural satisfies the legal test prescribed under Section 2(1A) of the Act. 6.4 The conclusion drawn by the Learned PCIT that no agricultural activity was undertaken by the assessee is therefore not borne out by the material on reco principles laid down by the Hon’ble Supreme Court and various High Courts. The revisional jurisdiction under Section 263 cannot be invoked merely on the ground that the PCIT holds a different opinion on facts duly examined a Officer. them would not qualify as agricultural income, in the absence of ion activity. However, in the present case, the assessee has demonstrably established that cultivation was carried out—albeit not personally, but through hired labour and local farmers engaged for this purpose. The settled law, as reiterated in Raja Benoy (supra), is that it is not essential for the assessee to perform the agricultural operations personally; it is sufficient if such operations are carried out under his supervision through hired labour or The records reveal that the assessee not only owned the land but also actively participated in the agricultural process through engagement of labour, and has provided evidence of sale of the agricultural produce and corresponding receipts. In this view of the matter, the agricultural activity undertaken by the assessee satisfies the legal test prescribed under Section 2(1A) of the Act. The conclusion drawn by the Learned PCIT that no agricultural activity was undertaken by the assessee is therefore not borne out by the material on record and is contrary to the legal principles laid down by the Hon’ble Supreme Court and various High Courts. The revisional jurisdiction under Section 263 cannot be invoked merely on the ground that the PCIT holds a different opinion on facts duly examined and verified by the Assessing Manish Jagdish Bajaj 11 ITA No. 2758/MUM/2025 them would not qualify as agricultural income, in the absence of However, in the present case, the assessee has demonstrably albeit not personally, but through hired labour and local farmers engaged for this Raja Benoy Kumar Sahas (supra), is that it is not essential for the assessee to perform the agricultural operations personally; it is sufficient if such operations are carried out under his supervision through hired labour or ssessee not only owned the land but also actively participated in the agricultural process through engagement of labour, and has provided evidence of sale of the agricultural produce and corresponding receipts. In this view of the activity undertaken by the assessee satisfies the legal test prescribed under Section 2(1A) of the Act. The conclusion drawn by the Learned PCIT that no agricultural activity was undertaken by the assessee is therefore not rd and is contrary to the legal principles laid down by the Hon’ble Supreme Court and various High Courts. The revisional jurisdiction under Section 263 cannot be invoked merely on the ground that the PCIT holds a different nd verified by the Assessing 7. In light of the foregoing discussion, we are of the considered view that the order passed by the Learned PCIT under Section 263 of the Act is legally unsustainable and is liable to be set aside. 8. Accordingly, the imp the Act is hereby quashed. The grounds raised by the assessee are allowed. 10. In the result, the ap Order pronounced in the open Court on Sd/ (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 30/06/2025 Disha Raut, Stenographer Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// In light of the foregoing discussion, we are of the considered view that the order passed by the Learned PCIT under Section 263 of the Act is legally unsustainable and is liable to be set aside. Accordingly, the impugned order passed under Section 263 of the Act is hereby quashed. The grounds raised by the assessee are In the result, the appeal of the assessee is allowed. nounced in the open Court on 30/0 Sd/- Sd/ RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Manish Jagdish Bajaj 12 ITA No. 2758/MUM/2025 In light of the foregoing discussion, we are of the considered view that the order passed by the Learned PCIT under Section 263 of the Act is legally unsustainable and is liable to be set aside. ugned order passed under Section 263 of the Act is hereby quashed. The grounds raised by the assessee are peal of the assessee is allowed. /06/2025. Sd/- PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "