The Bangalore Bench of Income Tax Appellate Tribunal deletes the addition made under Section 69 of the Income Tax Act, 1961 citing Section 44AA, which fortifies agriculturists is not required to maintain books of accounts.
Ganesh Vasudeva Shet, the assessee is an agriculturist and partner in two partnership firms M/s. Ganesh Jewellers, Shivamogga filed his income tax return for the assessment year 2018-19 declaring a total income of ₹11,86,040 and a net agricultural income of ₹81,45,189. The assessee claimed Rs. 81,45,189 as agriculture income. The assessing officer scrutinized the assessment and issued notices for an explanation.
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It was submitted on ITBA that the assessee was an 84-year-old man suffering from health issues and he was a computer illiterate who could not access notices on his own in ITBA so he could not comply with the notices. However, the assessing officer completed the assessment by adding 81,45,189 as unexplained income.
Aggrieved by this order, the assessee appealed before the Commissioner of Income Tax (Appeals). The assessee’s counsel submitted that the assessee has 14 acres of agricultural land growing major and minor crops. The assessee’s counsel explained the business flow and produced all the evidence before the CIT(A). Upon verification by AO, the CIT(A) confirmed the addition of Rs. 9,29,559 due to a lack of documentary evidence sold in the open market.
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The assessee appealed before the ITAT, Bangalore against the CIT(A) order. The counsel submitted that one cannot expect to maintain bills, vouchers, and receipts of the sale of agricultural products on a day-to-day basis by an agriculturist.
The two-member bench comprising Chandra Poojari (Accountant Member) and Beena Pillai (Judicial Member) referred to section 44A of the Income Tax Act which fortifies the agriculturist is not required to maintain books of accounts.
The tribunal observed it is impossible to expect an agriculturist to record the sale of coconut or any other agricultural products on a day-to-day basis. The assessee had produced documentary evidence of the sale made to Malnad Arecanut Co-operative Society (MACOS) and CAMPCO during the year.
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It further noted that the revenue did not bring any record to prove any other source of income other than agricultural income. As the revenue had failed to produce anything contrary, we find no reason to disbelieve the assessee’s submissions. Thus, the tribunal directed the assessing officer to delete the addition made. The assessee’s appeal was allowed.
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