Appeal partly allowed with condoned delay, upheld income addition, reduced expenses disallowance, and re-computation directive.

The appeal was partly allowed. The delay in filing the appeal was condoned, the addition of Rs.2,20,057/- as income from other sources was upheld, and the disallowance of agricultural expenses was reduced from 40% to 30%. The Tribunal directed the AO to re-compute the disallowance accordingly.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Addition of Rs.2,20,057/- by treating agricultural income as income from other sources.
3. Disallowance of Rs.6,74,710/- of claimed agricultural income by treating it as income from other sources.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The assessee contended that the delay of 591 days in filing the appeal was due to not receiving the order from the CIT(A). The delay was discovered upon receiving a penalty order on 24.04.2019, which led the assessee to consult his counsel and subsequently file the appeal. The Tribunal considered the rival submissions, noting that the assessee claimed ignorance of the CIT(A)'s order until the penalty was received. The Tribunal found no evidence from the Revenue to prove timely service of the order. Citing the Supreme Court case of Collector of Land Acquisition Vs Mst Katiji, the Tribunal preferred substantial justice over technical considerations and condoned the delay, allowing the appeal to be heard on merits.

2. Addition of Rs.2,20,057/- by Treating Agricultural Income as Income from Other Sources:
The assessee declared agricultural income of Rs.22,93,000/- but could not substantiate Rs.2,20,057/- as part of this income. The Assessing Officer (AO) added this amount as 'income from other sources,' and the CIT(A) upheld this addition, noting insufficient evidence from the assessee to prove receipt in cash. The Tribunal reviewed the submissions and found the assessee failed to provide documentary evidence to substantiate the cash receipt claim. Consequently, the Tribunal affirmed the CIT(A)'s order, dismissing this ground of appeal.

3. Disallowance of Rs.6,74,710/- of Claimed Agricultural Income by Treating it as Income from Other Sources:
The AO disallowed 40% of the gross agricultural receipts, deeming the claimed expenses (14.98%) abnormally low, and treated the disallowed amount as 'income from other sources.' The CIT(A) upheld this disallowance due to the assessee's failure to provide evidence of expenses borne by the sugar factory. The Tribunal considered the arguments, including precedents from ITAT Ahmedabad and Chandigarh, which restricted similar disallowances to 30%. Respecting these judicial precedents, the Tribunal directed the AO to restrict the disallowance to 30% instead of 40%, thereby partly allowing this ground of appeal.

Conclusion:
The appeal was partly allowed. The delay in filing the appeal was condoned, the addition of Rs.2,20,057/- was upheld, and the disallowance of agricultural expenses was reduced from 40% to 30%. The Tribunal directed the AO to re-compute the disallowance accordingly.

Order Pronouncement:
The order was pronounced on 15/07/2022 in the open court and was also placed on the Notice Board.

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