TMI Blog2020 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and no enquiry has been conducted from the parties through whom the agricultural produce was sold. Any enquiry made from these parties would have disclosed the truth but this was not done by the AO. He has preferred to act on estimate and guess work. At first the AO estimated the gross agricultural produce on the basis of a report from the Tehsildar but when the same was agitated by the assessee claiming that the land owned by the asessee was more fertile and capable of yielding more crops in comparison to an average land as reported by the Tehsildar. However, the AO did not accept the contention of the assessee. This shows the variation on working of agricultural income on estimate basis. AO has estimated price as well yield wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1 The only grievance of the assessee relates to disallowance of agricultural income amounting to ₹ 8,24,190/-. 2.2 Rival contentions have been heard and records perused. Facts in brief are that the assessee is a limited company and is engaged in agricultural activity. Return of income was filed on 28.09.2016 declaring total income of Rs. Nil and agricultural income of ₹ 21,66,534/- and interest income of ₹ 2,52,333/-. The AO has completed the assessment u/s 143(3) of the Income Tax Act, 1961 on 30.12.2018 determining total income at ₹ 8,24,190/- inter alia making the addition of ₹ 8,24,190/- by treating the agricultural income as non-agricultural. 2.3 By the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that the AO rejected the claim of the assessee for production of bajra on the basis of report of Tehsildar obtained by him that the average production of bajra in the area is 30 quintal per hectare which was a general report whereas the assessee has well irrigated land with all facilities and his production is higher than other lands in the area. So the total production in 22.4 Hectare was 803 quintal and average of which is 35.8 quintal per hectare. The AO has given the benefit of 25 quintal per hectare. The production of any crops depend upon fertility of land, irrigation facility, seeds and manure used by him. Since the company is only having agriculture activities and directors are experienced in the field, therefore, the ave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made an addition of ₹ 2,29,150/- out of total sale of matar shown by the assessee for ₹ 5,69,050/- which is backed by credible evidences. The AO did not make any enquiry and also did not bring any evidence on record that the sale of matar shown by the assessee is not genuine. Under these circumstances the addition so made by the AO ignoring the submission of the assessee deserves to be deleted. 2.4.3 The ld.AR of the assessee further invited the attention of the Bench to the order of the AO for the immediately preceding Assessment Year wherein the assessment was framed u/s 143(3) of the Act and the AO has accepted the agriculture income on same land holding under the same facts and circumstances to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration the assessee has disclosed net agricultural income of ₹ 21,66,534/- from agricultural holdings around 90 bighas of irrigated agriculture land. Copy of khasra girdawari and Patwar Halka report is available on paper book page no. 6 to 7. This includes income by agricultural by-product of ₹ 5,69,050/- and sale of trees of ₹ 3,73,500/-. This means that per bigha per annum agricultural income was shown at ₹ 24,073/- which is very reasonable looking to the cost of agricultural products such as gwar, mustard etc. However the AO has accepted net agricultural income to the extent of ₹ 13,42,344/- by estimating the agriculture income as per agriculture department/tehsildar reports which is general in nature and ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO acted on the basis of suspicion and doubt. It is settled position of law that suspicion however strong cannot take the place of evidence. In this case the vouchers of sale cannot be rejected on the basis of suspicion and doubt. For this purpose, reliance can be placed on the following judicial pronouncements 1. Uma Charan Shaw Brothers 37 ITR 271 (SC) 2. CIT vs. Anupam Kapoor 299 ITR 179 (P H) 3. CIT vs. Dhiraj Lal Girdhari Lal 26 OTR 736 4. Dhakeshwari Cotton Mills 26 ITR 775 (SC) 5. State vs. Gulzari Lal Tondon 1979 AIR 1382 (SC) 6. J.A. Naidu vs. State of Maharastra 1979 AIR 1537 (SC) Further more, I al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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