2023 (1) TMI 268 - AT - Income Tax
Estimation of the agricultural income - when books of accounts are not maintained for a source of income, a reasonable estimate is made and the income is subjected to tax - AO treated part of the agricultural income as “Income from Other Sources” for the current year - Assessee argued by the ld AR that the estimated agricultural income is very well supported and accordingly there is no reason for the AO reject the estimate - HELD THAT:- No adverse finding has been reported by the inspector. During the course of hearing our attention was drawn to the statement of yield for various years by the Rubber Board of Kerala where it is mentioned that the average yield of rubber per hectare of Palakkad District is stated to be 2011-12 – 1940 kgs/ ha and 2012-13 – 1913 kgs/ha. The same report also has details of price per kg of rubber. It is therefore
Assessee has estimated the income from rubber based on the average yield for different geographical locations as per Rubber Board data and the prices of rubber are collected by the Rubber Board - As noticed that the yield of coconut has been estimated, again on the average yield rate and the prices of coconut has been taken on the average rate for the year.
We see merit in the contention that the estimation of the agricultural income is done on valid basis and not estimated on adhoc basis. It is also noticed that the assessee has been declaring the agricultural income on estimated basis in earlier years which has not been disputed by the revenue.
AO has estimated the agricultural income of the assessee to Rs.36,00,000 and the basis on which this estimate is made is not coming out clearly in the order of the AO and this contention of the assessee has not been looked into by the CIT(A) except for stating that the said estimate is reasonable.
When the assessee has submitted the possible evidence for estimating the income, the same cannot be brushed aside without recording any adverse finding.
Revenue has not brought anything on record to show that the income estimated and the percentage of expense claimed by the assessee is not correct. AO has also not recorded any supporting to show how the agricultural income is estimated at Rs.36,00,000.
Addition made by the AO is purely based on surmise without recording any contrary finding and therefore should be deleted. Accordingly we hold that the addition done both AY 2012-13 and 2013-14 to be deleted and the appeals are allowed in favour of the assessee.