PRAKASH CHAND,SHIMLA V. INCOME TAX OFFICER, SHIMLA

ITA 1215/CHANDI/2025

AI Insights

The case involves Shri Prakash Chand, an appellant, who contested the addition of Rs. 38.70 Lacs as unexplained agricultural expenditure by the Income Tax Officer (ITO) under Section 69C of the Income Tax Act. The expenditure was initially added during the assessment for the year 2018-19, and the addition was confirmed by the Commissioner of Income Tax (Appeals). The appellant argued that the expenditures were genuine and supported by documentation, including bank statements and details of agricultural income and expenditures. The Tribunal, after reviewing the submissions and evidence, concluded that the expenditures were indeed genuine and directed the re-computation of the assessee's income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792239 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2018-2019
• Appeal Filed On: 23-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: VISHAL MOHAN . PRAVEEN
• Keywords: Unexplained expenditure; Source of fund
• Section: 143(3); 69C

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH HYBRID HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.1215/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2018-19) Shri Prakash Chand Village Barseri, P.O.Deori Khaneti, Tehsil Kotkhai, Shimla, Himachal Pradesh - 171204 बनाम/ Vs. ITO Railway Board building, Shimla, Himachal Pradesh 171001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. APBPC-4173-N (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Vishal Mohan (Sr. Advocate) with Sh. Praveen Sharma (Advocate) (Virtual Mode) – Ld. ARs ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 01-12-2025 घोषणाकीतारीख /Date of Pronouncement : 02-12-2025 आदेश / O R D E R 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018- 19 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 14-08-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) r.w.s. 144B of the Act on 26-04-2021. The sole grievance of the assessee is confirmation of addition of agricultural expenditure u/s 69C for Rs.38.70 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. Printed from counselvise.com 2 2. The assessee earns agricultural income from apple orchards. It claims that approx. 40% to 45% of sales from agricultural produce is expended towards this activity. However, the assessee could not furnish requisite documents and relevant bills to substantiate the same. Accordingly, the agricultural expenditure of Rs.38.70 Lacs as claimed by the assessee was held to be non-genuine and the same was added as unexplained expenditure u/s 69C. The assessee filed first appeal wherein the addition was confirmed against which the assessee is in further appeal before us. 3. The Ld. AR has placed on record computation of agricultural income. It could be seen that the assessee has earned gross agricultural income of Rs.86.01 Lacs and incurred various expenditure on account of labor charges, salary, packing charges, fertilizers & chemicals and finally, computed agricultural income of Rs.47.30 Lacs. The transaction-wise detail along with source of payment has also been furnished. In its reply to Ld. CIT(A) on 04-09-2024, the assessee had furnished details of agricultural expenditure along with Bank statements through which such expenditure was incurred. It was demonstrated that entire expenditure was routed through bank account of the assessee. It was further pointed out that the case of the assessee for AY 2020-21 was scrutinized on identical facts and the returned income was accepted by Ld. AO. However, these details have not, at all, been considered by Ld. CIT(A). Nevertheless, when all the expenditure has been routed through known sources of income, the same could not be held to be unexplained expenditure. The Printed from counselvise.com 3 provisions of Sec.69C have no applicability to the facts of the present case since the only allegation of Ld. AO was that the expenditure was not genuine. The source of expenditure was never doubted. On these facts, the impugned addition could not be sustained on facts and hence, deleted. The Ld. AO is directed to re-compute the income of the assessee. 4. The appeal stand allowed. Order pronounced on 02nd December, 2025. -Sd- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER Dated: 02-12-2025 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "