TaxTMI 
TaxTMI 
2026 (3) TMI 1338
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....ed issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowances of agricultural income and treating the same as income from other sources. 3. The facts in brief are that the assessee is a HUF. In the original return filed for the year under consideration, the assessee declared total taxable income of Rs. 2,63,450/-only. Subsequently, the return was revised declaring agricultural income for Rs. 41,51,600/- only which was claimed as exempted under the Act. The return was selected for limited scrutiny under CASS for verification of agricultural income. 4. During the assessment proceedings, the assessee submitted that he holds 31.39 acers of land in own name and also having ¼ share in 35.10 acers of....
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....ties and that most of the expenditures towards labour, fertilizers, chemicals and pesticides were incurred in cash. The assessee also stated that the agricultural sales were partly made directly from the farm on cash basis and partly through dealers. The AO observed that the assessee failed to furnish supporting evidence in respect of crop-wise yield, quantity of agricultural produce, details of sale such as sale bills, name of purchasers, rate per quintal or date of sale. The assessee also could not substantiate that the credits appearing in the bank accounts (from the parties such as Areca Enterprise, Manish Traders, AR Traders etc. represented sale proceeds of agricultural produce. Further, no documentary evidence was produced to support....
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.... In the statement of facts, it was reiterated that the agricultural produce were sold directly from farm in cash as well as to dealer for which payment was received through banking channel which can be verified from bank statement where the receipts from the parties such as Areca Enterprise, Manish Traders, AR Traders etc. were reflected. In the statement of facts, it was also claimed that to substantiate the agricultural income, the return of income from A.Ys. 2017-18 to year under consideration (A.Y. 202-21) were also furnished. Accordingly, the assessee through statement of facts prayed that the part of agricultural income disallowed by the AO on the basis of estimation is unjustified and required to deleted. 6. However, the learned C....
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....ld not furnish crop-wise yield details, sale bills, names of purchasers or documentary evidence for the agricultural expenditure claimed. The DR further submitted that the credits appearing in the bank accounts were not conclusively proved to be sale proceeds of agricultural produce. In these circumstances, the AO was justified in estimating agricultural income at Rs. 60,000 per acre and treating the balance amount as income from other sources. 10. We have heard the rival contentions of both the parties and perused the materials available on record. The issue for our consideration is whether the learned CIT(A) was justified in dismissing the appeal of the assessee in limine and in confirming the addition made by the AO by treating a part....
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....d in the bank account from parties such as Areca Enterprise, Manish Traders and AR Traders. As such the receipts from these parties represented sale proceeds of agricultural produce. The assessee had also referred to the agricultural income declared in earlier years to demonstrate the consistency of such income. Interestingly, the learned CIT(A) himself has reproduced the contents of the statement of facts in the appellate order. Thus, it cannot be said that there was absolutely no material available before the learned CIT(A) to examine the issue on merits. 10.3 In our considered view, the approach adopted by the learned CIT(A) is not in accordance with the scheme of the Act. The learned CIT(A) being the first appellate authority is duty....
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....accepted that the assessee owns substantial agricultural land and that crops are reflected in the RTC records. The AO has also accepted agricultural income to a substantial extent by estimating the income at Rs. 60,000 per acre. Having accepted that agricultural operations were indeed carried out, the further estimation made by the AO without any comparable data or scientific basis appears to be purely arbitrary. The estimation adopted by the AO does not take into account the nature of crops grown such as arecanut and coconut which are capable of generating higher agricultural income depending upon yield and market conditions. Moreover, the assessee had also explained that part of the sale proceeds were received through banking channels fro....