Agricultural income of Rs.6,000 per acre deemed reasonable, undisclosed income additions deleted for multiple assessment years

ITAT Mumbai ruled in favor of the assessee regarding additions made for undisclosed income. The tribunal held that agricultural income of Rs.6,000 per acre from 33.24 acres of land in Rajasthan was reasonable and not excessive, supported by land records and APMC receipts. For AY 2013-14 to 2018-19, additions treating agricultural income as undisclosed sources were deleted. For AY 2019-20, the Rs.14 lakh addition was also deleted as Rs.12 lakh was explained through past savings from disclosed income, and Rs.2 lakh was supported by sister's affidavit. No incriminating evidence was found during search operations.

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Issues Involved:
1. Addition of Rs. 14 lacs for A.Y. 2019-20 under Section 69A of the Income-tax Act.
2. Addition of agricultural income as undisclosed income for A.Y. 2013-14 to 2018-19.
3. Validity of assessment orders due to non-issue of notice under Section 143(2) of the Act.
4. Consideration of incriminating material found during the search.

Summary:

1. Addition of Rs. 14 lacs for A.Y. 2019-20:
The assessee was found with Rs. 14 lacs in a locker during a search under Section 132 of the Income-tax Act. The assessee claimed Rs. 12 lacs belonged to him from savings and agricultural income, and Rs. 2 lacs belonged to his sister. The Assessing Officer disbelieved this explanation, adding Rs. 14 lacs to the total income under Section 69A. The Tribunal found the assessee's explanation for Rs. 12 lacs credible based on his agricultural income and brokerage earnings, thus deleting this addition. Regarding the Rs. 2 lacs claimed to belong to the sister, supported by an affidavit and her Permanent Account Number, the Tribunal also deleted this addition, finding no substantial evidence to disprove the claim.

2. Addition of Agricultural Income as Undisclosed Income:
For A.Y. 2013-14 to 2018-19, the Assessing Officer added the agricultural income shown by the assessee as income from undisclosed sources due to insufficient evidence. The Tribunal noted the assessee's ownership of agricultural land and partial evidence of agricultural produce sales. It concluded that the agricultural income shown was reasonable and could not be considered excessive or undisclosed, thus deleting these additions.

3. Validity of Assessment Orders:
The assessee argued that no notice under Section 143(2) was issued for A.Y. 2013-14 to 2018-19, rendering the assessment orders invalid. The Tribunal noted this but did not address it further as the additions were deleted on merits.

4. Consideration of Incriminating Material:
The Tribunal observed that no incriminating material was found during the search for A.Y. 2013-14 to 2018-19, supporting the deletion of additions for these years.

Conclusion:
The Tribunal allowed all seven appeals filed by the assessee, deleting the additions made by the Assessing Officer for both the Rs. 14 lacs found in the locker and the agricultural income treated as undisclosed income. The Tribunal did not need to address the legal grounds regarding the non-issue of notice under Section 143(2) and the lack of incriminating material due to the deletions on merits.

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