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2018 (10) TMI 1866 - ITAT SURATAddition on account of sales of sugarcane as income from unexplained cash credit u/s 68 - HELD THAT:- We find that the agricultural land holding of 9.80 hectares is not in dispute. The assessee has filed copies of bills of agricultural produce during the course of assessment proceedings and copy of ledger account showing sale of sugarcane at ₹ 8,37,33 as given in para 3 of the table of assessment order. The assessee has also produced Shri Mahendrabhai Patel and Shri Krunalbhai Lad for examination through whom sale of sugarcane was effected. The learned counsel for the assessee has filed a chart-showing yield @ 637.50 per hectares during relevant period and rate of sale @ 130 per quintal. Accordingly, the estimate of sugarcane sale comes to ₹ 8,12,175 [637.50 X 9.80 hectares = 8,12,175]. Beside, this the assessee has also earned income from sale of cotton etc., which is also supported by 7/12 extract and 8A. Therefore, considering the facts and the circumstances of the case and taking a holistic view, we are of the considered opinion that the assessee might have earned the Gross agricultural income at ₹ 8,12,175/-, therefore, considering the expenditure @ 40% of gross income the net income would be at ₹ 4,87,305/- (₹ 8,12,175/ - ₹ 3,24,870/- = ₹ 4,87,305/-). Further, the AO accepted ₹ 79,837/- agricultural income earned by the assessee as reasonable. Thus net agricultural income is considered at ₹ 5,67,142/- (₹ 4,87,305/- + ₹ 79,837/-) as against the agricultural income credited in the books of accounts of the assessee at ₹ 9,17,170/-, accordingly, the addition on account of agricultural income is restricted to ₹ 4,87,305/- and accordingly the assessee gets relief. Penalty u/s 271(1)(c) - CIT(A) has treated the addition on account of sugarcane receipts, therefore, the AO levied a penalty treating the income from unexplained sources - HELD THAT:- We find that the assessee the AO has made addition on account of agricultural income treating the same as unexplained which the CIT (A) has further, reduced by ₹ 1 Lakh in appeal. As we have also reduced the quantum addition to ₹ 4,87,305/-. In such situation the penalty is also required to be recalculated. Therefore AO is directed to calculate penalty on unexplained income at Rs. ₹ 4,87,305/- only. This grounds of appeal is therefore, allowed partly allowed.
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