Excess Agricultural Income Declared in Return Due to Filing Error: ITAT accepts Correction and deletes ₹15.5L Addition u/s 69A [Read Order]

The Income Tax AppellateTribunal (ITAT), Delhi Bench, deleted addition of ₹15.5 lakh made under Section69A after accepting the assessee’s claim that excess agricultural income was wrongly declared in the return due to a filing error.

The assessee, Chander Pal, an agriculturist, had filed return for AY 2017-18 declaring agricultural income of ₹20.50 lakh. He later submitted that the actual agricultural income was ₹10.50 lakh and excess income of ₹10 lakh was wrongly declared in the return due to a filing mistake. An affidavit of the person who had filed the return was also furnished in support of the claim.

The Assessing Officer, however, estimated the agricultural income at ₹5 lakh by considering only wheat crop and ignoring income from paddy cultivation. The remaining amount was treated as unexplained money under Section 69A.

The addition was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)].

Before the Tribunal, the assessee submitted that while estimating the agricultural income, the Assessing Officer had ignored income from paddy cultivation and considered only wheat crop. He also pointed out that agricultural income declared in the subsequent assessment years had been accepted by the Department. The assessee further relied on material placed on record in support of his claim.

The Revenue supported the orders of the lower authorities and sought dismissal of the appeal.

The Tribunal, comprising Vikas Awasthy (Judicial Member), noted that the Assessing Officer had estimated the agricultural income after considering only wheat crop despite material on record showing cultivation of paddy crop.It further held that tax can be collected only in accordance with law and an assessee cannot be denied relief merely because excess income was mistakenly declared in the return.

Accordingly, the Tribunal accepted the agricultural income at ₹10.50 lakh and deleted the addition of ₹15.5 lakh under Section 69A.

The appeal of the assessee was allowed.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates