Chhagan Bhujbal, a prominent politician from Maharashtra and a member of the 15th Legislative Assembly, is facing scrutiny over the agricultural income declared in his tax returns for the assessment year 2013-14. The Income Tax Appellate Tribunal (ITAT) recently directed the Income Tax Officer (AO) to re-examine the sale records of agricultural produce after the Assessing Officer (AO) questioned the authenticity of the agricultural income shown by Bhujbal.
Bhujbal, seasoned politician , a senior figure in the Maharashtra Government and a member of the legislative assembly from Yeola, had declared agricultural income of Rs.50 lakh for the relevant financial year, primarily derived from the sale of grapes. However, the AO raised concerns about the genuineness of this income, particularly the sales transactions with wine companies.
Law and Procedure for Filing of Appeals
The AO questioned the documentation and supporting evidence for the sales of grapes to parties like Venus Cellars Pvt. Ltd., Nashik Vintners Pvt. Ltd., and Rajdheer Wines Pvt. Ltd. The issue escalated when it was found that some of the bills and sales records provided by Bhujbal showed discrepancies. Notably, the letter from Venus Cellars Pvt. Ltd. revealed that they had no direct transaction with Bhujbal, as their dealings were with “Bhujbal Farm,” owned by Bhujbal’s relative. The AO also pointed out the absence of records for a cash sale of Rs.9.45 lakh.
Subsequently, the AO added the full amount of Rs.50 lakh to Bhujbal’s taxable income, treating it as unexplained income under Section 68 of the Income Tax Act. The matter was then taken up with the Commissioner of Income Tax (Appeals) (CIT(A)), who partially reduced the addition to Rs.21 lakh, estimating that the agricultural income claimed was inflated.
The CIT(A) highlighted that the expenses shown by Bhujbal against the agricultural receipts seemed unusually high, especially given the low-profit margins common in agricultural activities. Despite this, the CIT(A) allowed a partial relief, acknowledging that some of the agricultural income was genuine, but reduced the figure to Rs.29 lakh. Bhujbal had claimed agricultural expenses of Rs.7.4 lakh, but no conclusive evidence was presented for certain transactions.
The ITAT Two Member Bench comprised of Amit Shukla(Judicial Member) and Girish Agarwal (Accountant Member), while agreeing with the partial relief granted by the CIT(A), found that there was insufficient proof to conclusively validate the sales figures for some of the parties involved. As a result, the matter was remanded back to the AO for further investigation.
Law and Procedure for Filing of Appeals
Bhujbal has been directed to provide concrete evidence, including sale bills, bank statements, and confirmation of ledger accounts from the concerned parties to demonstrate the legitimacy of the transactions. The ITAT emphasized that if the sales were found to be genuine, no further tax liability would be imposed.
This ruling has significant implications not only for Bhujbal but also for other political figures and individuals involved in large-scale agricultural operations, as it underscores the importance of maintaining proper documentation and transparency in financial dealings.
Bhujbal, a well-known political figure in Maharashtra, is also the leader of the Nationalist Congress Party (NCP) and has held various important positions within the state government. His case has attracted attention due to his stature in politics, and it remains to be seen how he will address the income tax department’s concerns.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
