₹44 Lakh Difference in Agricultural Income Calculation: ITAT calls on Income Tax Department to examine Assessee’s Generation Operations [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad recently directed the Income Tax Department to re-examine the agricultural operations of Sanjay Jayantibhai Patel, whose declared agricultural income held a discrepancy of ₹44,68,426 in comparison to the income claimed to have been accrued by him.

An Income Tax Appeal was filed by Sanjay Jayantibhai Patel against the Income Tax Officer, Ward-1, Gandhinagar impugning an order passed by the Commissioner of Income Taxes (Appeals), National Faceless Appeal Centre ( CIT(A) ) with regards to the Assessment Year (A.Y.) 2020-21.

Law and Procedure for Filing of Appeals

The facts pertain to the filing of income tax returns by Sanjay Jayantibhai Patel, claiming an agricultural income of ₹64,68,426, which was later claimed to be ₹20,00,000. The Assessing Officer (AO) proceeded to pass an order under Section 144 read with Section 144B of the Income Tax Act, 1961 confirming the addition of ₹64,68,426 under Section 68 of the Act.

The Assessee claimed that the NFAC had committed grave error in confirming an income tax addition of ₹64,68,426 under Section 68 of the Income Tax Act, 1961 without considering the submissions of genuine error made by the Assessee.

Appearing through M.K. Patel, the Assessee contended that the agricultural income of ₹64,68,426 had been wrongly shown by his Chartered Accountant (CA) while the genuine agricultural income was estimated at ₹20,00,000.

Meanwhile no Counsel appeared for the Revenue who filed for adjournment in the present matter.

The two-member Bench constituted by DR. B.R.R. Kumar, Vice-President and Suchitra Kamble, Judicial Member observed that the factum of “generation of agricultural income” is required to be examined which had not been adequately conducted by the Revenue authorities.

Further, acceding to the submissions of the Counsel that the Appellant possesses evidence to substantiate the amended agricultural income, the Bench proceeded to remand the matter to AO to examine the “Agricultural Operations undertaken by the assessee and the Generation of agricultural income”.

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