Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 312289 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
02-05-2025
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2020-2021
Judgement Text
" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No.695/Ahd/2024 (Assessment Year: 2020-21) Satyajit Pravinsinh Kumpawat, Plot No. 53/A/2, Sector-2/A, Sector-2, Gandhinagar-382 002 [PAN No. AHQPK 0772 Q] Vs. Income-Tax Officer, Ward-4, Gandhinagar (Appellant) .. (Respondent) Appellant by : Shri Parin S. Shah, AR Respondent by: Shri S.K. Agal, Sr.DR Date of Hearing 24.04.2025 Date of Pronouncement 02.05.2025 O R D E R PER: DR. B.R.R. KUMAR, VICE PRESIDENT: This appeal has been filed by the assessee against the order of the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\" for short) dated 14.02.2024, passed u/s 250 of the Income-tax Act, 1961, (hereinafter referred to as \"the Act\" for short) for the Assessment Year (AY) 2020-21. 2. The core ground raised by the assessee is as under: “[1] The Ld. CIT(A), NFAC, Delhi is grievously erred in determining the disallowance of the balance amount of Rs. 14,33,983/- at the rate of 15% of agriculture income out of the total disallowance of Rs. 28,67,967/- being the estimate of 30% expenses of net agriculture income is quite illegal and unreasonable and wrong concept. ….” ITA No. 695/Ahd/2024 Satyajit Pravinsinh Kumpawat Vs. ITO Asst. Year : 2020-21 - 2– 3. The brief facts of the case are that the assessee is engaged in agricultural activities and has filed his return of income for the year under consideration on 30.03.2021 determining income of Rs. 9,80,080/- and declaring agricultural income of Rs. 95,59,891/-. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 144B of the Act on 28.09.2022, assessing the income of the assessee at Rs.38,48,047/- and agricultural income of Rs.66,91,924/-. The findings of the Assessing Officer are as follows:- “3.8 ..Considering the above facts and circumstances, it is inferred that the assessee has failed to prove in establishing the fact of low expenditure incurred for producing large agricultural income. On verification of the earlier returns, it is seen that the assessee is regularly showing agricultural income in his return of income and own agricultural land. It is appropriate to make an addition at 30% of net agricultural income on account of undisclosed expenses incurred for earning this agricultural income seems to be reasonable and meet the ends of justice. Since the assessee has suppressed the agricultural expenses thereby disclosing large agricultural income, it is inferred that assessee has deliberately and willfully shown large agricultural income. Assessee failed to explain the undisclosed expenses incurred for producing large agricultural income from his unexplained credits. Since, the assessee failed to substantiate his claim of low expenditure incurred, an amount @ 30% of the net agricultural income, which comes to Rs.28,67,967/- added to the total income of the assessee u/s68 of the Act being unexplained cash credit. Since, the addition of Rs.28,67,967/- is made under cash credit u/s.68 of the Act, tax will be computed @ special tax rate as per the provisions of section 115BBE of the Act.” 4. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who restricted the disallowance to 15% of the agricultural income of Rs.95,59,892/-, resulting in confirming the addition of Rs.14,33,984/- u/s 68 of the Act. ITA No. 695/Ahd/2024 Satyajit Pravinsinh Kumpawat Vs. ITO Asst. Year : 2020-21 - 3– 5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 6. We have heard the rival contentions and perused the material available on record. We find that the Assessing Officer made an addition at the rate of 30% of net agricultural income of Rs.95,59,891/- i.e. Rs.28,67,927/-, being unexplained cash credit u/s 68 of the Act, since the assessee has failed to substantiate his claim of low expenses incurred of Rs.5,90,797/- to earn agricultural receipts of Rs.1,01,50,689/-. The Ld. CIT(A), however, restricted the disallowance to 15% of the net agricultural income, thereby confirming an addition of Rs.14,33,984/- u/s 68 of the Act. We have perused the particulars of income of the assessee for the last three years as available in the statements of facts. The same is as under:- Particulars AY 2018-19 AY 2019-20 AY 2020-21 Interest Income 13,50,746 11,36,200 11,36,027 Gross Agri. Income 70,00,000 47,00,000 1,01,60,689 Expense incurred on agricultural 18,90,000 16,50,000 5,90,797 Net Agricultural Income 51,10,000 30,50,000 95,59,892 % of expenses incurred to be gross agricultural income 27.00% 35.10% 5.82% % of expenses incurred to the net agricultural income 36.98% 54.09% 6.17% 7. The Assessing Officer held that the percentage of expenses incurred to the gross agricultural income is only 5.82% is very low in compare to last two years. As per the A.O. the expenditure in comparison to the agriculture income earned is unrealistic. The Assessing Officer held that in India the ITA No. 695/Ahd/2024 Satyajit Pravinsinh Kumpawat Vs. ITO Asst. Year : 2020-21 - 4– average rate of expenditure to earn agricultural income is around 40% of the gross income received and in conclusion the Assessing Officer disallowed 30% off the agricultural income as expenses. The Ld. CIT(A) restricted it to 15%. We find that the assessee has submitted a list of agricultural produce, details of preparation of soil, fertilizer, irrigation, water, electricity charges etc. The Ld. AR also submitted that the assessee had minimal requirement of labour and owned water facility. Hence, the expenses were minimal. The details of sale are neither doubted nor in question. The agricultural produce consists of mango, sapota, wheat, chickpea, corn, moong, guwar, juwar, tuvar, bajari which are regular commercial food crops grown in this area. The average agricultural income per acre on these crops’ ranges from Rs.25,000/- to Rs.30,000/-. The total acreage held by the assessee is approximately 40 acres. Since the sale receipt has not been disputed by the Revenue, we hold that restricting the expenditure to 15% by the Ld. CIT(A) is quite reasonable and no interference is called for on this issue. Appeal of the assessee is dismissed. 8. In the result, the appeal of the assessee is dismissed. This Order pronounced in Open Court on 02.05.2025 Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE PRESIDENT Ahmedabad; Dated 02.05.2025 **btk TRUE COPY ITA No. 695/Ahd/2024 Satyajit Pravinsinh Kumpawat Vs. ITO Asst. Year : 2020-21 - 5– आदेश क\u0007 \b त ल प अ\u0010े षत/Copy of the Order forwarded to : 1. अपीलाथ\b / The Appellant 2. यथ\b / The Respondent. 3. संबं\u0010धत आयकर आयु\u0017त / Concerned CIT 4. आयकर आयु\u0017त(अपील) / The CIT(A)- 5. \u001aवभागीय त न\u0010ध, आयकर अपील!य अ\u0010धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation ……01.05.2025……….. 2. Date on which the typed draft is placed before the Dictating Member ……01.05.2025………… 3. Other Member………01.05.2025………… 4. Date on which the approved draft comes to the Sr.P.S./P.S ………01.05.2025………. 5. Date on which the fair order is placed before the Dictating Member for pronouncement ………02.05.2025……. 6. Date on which the fair order comes back to the Sr.P.S./P.S …02.05.2025……………. 7. Date on which the file goes to the Bench Clerk ………02.05.2025……………….. 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…… 10. Date of Dispatch of the Order…………………………………… "
AI Insights
The case involves Satyajit Pravinsinh Kumpawat, who appealed against the order of the Commissioner of Income-Tax (Appeals) at the National Faceless Appeal Centre, Delhi. The dispute centered on the disallowance of expenses claimed against agricultural income for the Assessment Year 2020-21. The Assessing Officer had initially added 30% of the net agricultural income as unexplained cash credit under section 68 of the Act, which was later reduced to 15% by the CIT(A). The Tribunal found the CIT(A)'s reduction reasonable and dismissed the appeal, agreeing with the assessment that the expenses claimed were disproportionately low compared to the agricultural income reported.
