Agricultural income estimated by assesse has to be accepted by Income Tax in absence of contrary evidence: ITAT

The Income Tax Appellate Tribunal Bench in the matter of Anupama Chandrakandath vs ACIT has affirmed that the agricultural income estimated and offered by the assesse has to be accepted by Income Tax in the absence of any evidence to the contrary.

The ITAT observed that the estimated agricultural income was disputed by the revenue as the assessee has not maintained any books of accounts. The extend of agricultural holdings of the assessee and the fact that they are rubber plantation and coconut garden was not disputed by the Assessing officer as the Department Inspectors have conducted a field visit and submitted reports. From the perusal of records tribunal noted that no adverse finding has been reported by the inspector.

During the course of hearing ITAT’s 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 the price per kg of rubber. It is therefore argued by the ld AR that the estimated agricultural income is very well supported and accordingly there is no reason for the AO to reject the estimate. The ld AR also argued that the 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. It is also 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. From these facts ITAT draw merit in the contention that the estimation of the agricultural income is done on valid basis and not estimated on adhoc basis.

Further, it was also noticed that the assessee has been declaring the agricultural income on an estimated basis in earlier years which has not been disputed by the revenue. The 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.

The Bench of Shri N. V. Vasudevan, Vice President and Ms. Padmavathy S, Accountant Member had a view when the assessee has submitted the possible evidence for estimating the income, the same cannot be brushed aside without recording any adverse finding. The 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. The AO has also not recorded any supporting to show how the agricultural income is estimated at Rs.36,00,000.

In view of these discussions and considering the facts of the case it was concluded that the addition made by the AO were purely based on surmise without recording any contrary finding and therefore should be deleted. Accordingly, ITAT held that the addition of Rs.9,00,000 done both AY 2012-13 and 2013-14 should be deleted and the appeals should be allowed in favor of the assessee.

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