Tribunal allows appeal, adds Rs. 1,80,000 as non-explained income, deletes Rs. 3,11,590.

The tribunal partially allowed the appeal, confirming an addition of Rs. 1,80,000 as non-explained agricultural income while deleting the remaining addition of Rs. 3,11,590. The judgment was pronounced on 19-10-2016.

---

---

Issues:
1. Disallowance under section 14A Read with Rule 8D
2. Reduction of agricultural income and treatment as income from other sources

Analysis:
1. The appeal involved a disallowance of Rs. 2,258 under section 14A Read with Rule 8D, which was not pressed and treated as dismissed by the tribunal.

2. The issue of reduction of agricultural income and its treatment as income from other sources was extensively discussed. The assessee had shown agricultural income at Rs. 15,60,000, but discrepancies were found by the AO regarding sales prices of wheat and soyabean compared to Mandi rates. The AO disallowed total sales amounting to Rs. 7,15,560 and computed a disallowance of Rs. 4,91,590 as income from other sources, reducing the agricultural income to Rs. 10,68,410. The CIT (A) confirmed this disallowance, stating that the assessee did not contest the AO's findings.

3. The tribunal considered the submissions of both parties. The assessee argued that the agricultural income per acre was reasonable, citing the holding of irrigated agricultural land and previous case laws where agricultural income was accepted based on confirmations filed by the assessee. The assessee contended that despite the unavailability of Mandi bills, confirmations for sales made to agriculturists were provided. The Senior DR supported the lower authorities' order, emphasizing the lack of maintained accounts for agricultural produce.

4. After reviewing the submissions and available material, the tribunal found that the assessee had indeed made on-spot sales to private parties at higher prices compared to Mandi rates. Considering the circumstances, the tribunal estimated 30% of the sales amount to private parties as non-explained agricultural income, resulting in a confirmed addition of Rs. 1,80,000. The remaining addition of Rs. 3,11,590 was deleted. Consequently, the appeal was partly allowed.

5. In conclusion, the tribunal partially allowed the appeal, confirming an addition of Rs. 1,80,000 as non-explained agricultural income while deleting the remaining addition of Rs. 3,11,590. The judgment was pronounced on 19-10-2016.

---