Bogus Agricultural Income : ITAT upholds 45.5 Lakh Income Tax Addition
The explanation of the assessee that there has been hike in agricultural income by three times in the current year and expenses have gone down from 76% to 43% cannot be held to be reasonable, logical and acceptable.
In a recent case, the Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the income tax addition of 45.5 Lakhs on bogus agricultural income. It was found that the explanation of the assessee that there has been hike in agricultural income by three times in the current year and expenses have gone down from 76% to 43% cannot be held to be reasonable, logical...
In a recent case, the Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the income tax addition of 45.5 Lakhs on bogus agricultural income. It was found that the explanation of the assessee that there has been hike in agricultural income by three times in the current year and expenses have gone down from 76% to 43% cannot be held to be reasonable, logical and acceptable.
Jigar Patel,the Assessee challenged the appellate order dated 04.03.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2018-19. The CIT(A) erred in law and on facts in confirming addition of Rs.49,55,101/- made by the ITO (Assessment Unit) as unexplained cash credit under section 68 of the Act. The Addition confirmed by the CIT(A) NFAC deserves to be deleted. The same be deleted now.
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The CIT(A) has erred in properly appreciating the facts, various submissions, explanations and information submitted by the appellant during the assessment proceedings which ought to have been considered in proper perspective before passing the impugned order. The appellant crave to add, amend, alter, delete, change or modify any or all grounds of appeal before or at the time of hearing.
Assessee e-filed his return of income on 31.07.2018 for the AY 2018-19 declaring total income at Rs.5,48,790/- and agriculture income of Rs.75,54,376/-. The case was selected for scrutiny under CASS under selection criteria “Agricultural Income”. In response to several statutory notices issued to the assessee to furnish details about the agricultural activities, the assessee’s representative Shri Shailesh C Parikh & Co. CAs submitted reply.
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The AO on examination of the entire case, came to the conclusion that for the year under consideration which witnessed widespread calamity i.e. Gujarat 2017 floods, the agricultural income cannot be more and the reply given by the assessee was nothing but a concocted story. The AO completed the assessment under section 143 (3) r.w.s 143(3A) & 143(3B) of the Act dated 18.03.2021, considering Rs.25,99,275/- as the agriculture income was held as income from the unexplained sources shown as agricultural income and Rs.49,55,101/- (i.e. Rs.75,54,376 – Rs.25,99,275) was treated as unexplained cash credit under section 68 of the Act.
The CIT(A) dismissed the appeal of the assessee by observing that the explanation of the assessee that there has been hike in agricultural income by three times in the current year and expenses have gone down from 76% to 43% cannot be held to be reasonable, logical and acceptable.
Considering this, the two member bench of Dr. B.R.R. Kumar, Vice-President and T.R. Senthil Kumar, Judicial Member dismissed the appeal.
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