TMI Blog2015 (2) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 5.00 lakhs. Thus, the agricultural income determined by the Assessing Officer turns out to be a mere estimate. Under these set of facts, we are of the view that the assessee cannot be found fault with, with the charge of concealment of particulars of income. Accordingly, we set aside the order of Ld CIT(A) in AY 2008-09 and direct the assessing officer to delete the penalty levied u/s 271(1)(c) of the Act for that year. In AY 2009-10 the assessing officer has simply forced the assessee to scale down the agricultural income by making lower estimates. The AO has examined the extent of land holding and was also satisfied with the same. However, in one of the agricultural record, the area of cultivation was shown at a lower level ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural income declared by the assessee in the two years under consideration was not accepted by the assessing officer and hence he reduced the same. In that process he assessed t he agricultural income not accepted by him as income of the assesse e under the head Income from other sources . The details of agricultural income declared by the assessee and that accepted by the Assessing Officer are given below:- Assessment Year Agricultural income declared by the assessee Agricultural income accepted by the AO Income assessed under Other sources 2008-09 3,45,46,596 5,00,00 3,40,46,596 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2008-09 and accordingly estimated income at ₹ 5.00 lakhs. However, in AY 2009-10, the AO has accepted the agricultural in come partially to the tune of ₹ 89.71 lakhs. He submitted that the AO has not brought any material on record to disprove the agricultural income declared by the assessee, but he has also resorted to estimate the agricultural income in both the years. He submitted that the AO has accepted the extent of land holding in AY 2009-10 b y conducting necessary enquiries through his Inspector of Income tax. The Ld A.R further submitted that the AO has accepted the extent of land holding in AY 2007-08 also by verifying the relevant documents, i.e., the year preceding to the assessment year 2008-09. Accordingly he s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exempt under the Income tax Act. He submitted that the very fact that the assessee has accepted the assessing officer s order in reducing the agricultural income and assessing the difference as income would show that the assessee had taken a chance to declare higher agricultural income. He submitted that the intention of the assessee has co me to light since the returns of income of both the years were taken up for scrutiny and the assessee might have escaped, if the returns had been processed u/s 143(1) of the Act. Accordingly he submitted that the Ld CIT(A) was justified in confirming the penalty levied u/s 271(1)(c) of the Act in both the years. 7. We heard the parties and perused the record. We have already noticed that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural income has been estimated at a lower figure in AY 2008-09 on the basis of mere presumption about the extent of land holding, which is proved to be wrong. The Assessing Officer has also failed to furnish the basis in adopting a round sum amount of ₹ 5.00 lakhs. Thus, the agricultural income determined by the Assessing Officer turns out to be a mere estimate. Under these set of facts, we are of the view that the assessee cannot be found fault with, with the charge of concealment of particulars of income. Accordingly, we set aside the order of Ld CIT(A) in AY 2008-09 and direct the assessing officer to delete the penalty levied u/s 271(1)(c) of the Act for that year. 8. In AY 2009-10, we notice that the assessee had originally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income. Thus, it is seen that there is contradiction in the stand of the assessing officer also. In any case, it is seen that the assessing officer has substituted the agricultural income declared by the assessee with another estimate only. In our view, such kind of substitution of income on estimated basis cannot be considered to be a case of concealment of particulars of income and hence the same would not give rise to any penalty u/s 271(1)(c) of the Act. Accordingly we set aside the order of Ld CIT(A) in AY2009-10 also and direct the AO to delete the penalty levied u/s 271(1)(c) of the Act in assessment year 2009-10. 10. During the course of hearing, it was noticed that the assessing officer has made identical disallowances in asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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