IN INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. No.359/Ind/2015 Assessment Year:2010-11 Shri Bhupendra Singh ACIT Circle Khandwa Khandpure Vs. P/o M/s. Central Motors, Pandhana Road Khandwa PAN:ATQPS2324C Appellant Respondent W : Date of hearing 21.09.2016 Date of 19.10.2016 pronouncement O R D E R PER O. P. MEENA, ACCOUTANT MEMEBR. 1. This appeal is filed by assessee is directed against order of learned Commissioner of Income tax (Appeals)-II, Indore (hereinafter referred to as ld. CIT (A))dated 30.01.2015. This I.T.A.No. 359/Ind/2015/A.Y.10-11/Sh Bhupendra Singh Khandpure Page 2 of 5 appeal pertains to Assessment Year 2010-11. This appeal arises out of assessment order dtd. 01.03.2013 passed u/s. 143(3) of Income Tax Act, 1961 [herein after referred to as "the Act ) by ACIT Khandwa [hereinafter referred to as AO ]. 2. Ground No.1 is general in nature and does not require adjudication and also not pressed, hence, treated as dismissed. 3. Ground No. 2 relates to disallowance of Rs. 2710/- under section 14A Read with Rule 8D, which has been not pressed, hence, treated as dismissed. 4. Ground No. 3 states that ld. CIT (A) had erred in confirming reduction of agricultural income from Rs. 16,90,000/- to Rs. 9,17,470/-and agricultural income treated as income from other sources at Rs. 7,72,530/- which is wrong , illegal and unwarranted. 5. Succinctly, facts of case are that assessee is individual, derives as share income from partnership firm and agricultural income. assessee has shown agricultural income at Rs. 16,90,000/-The AO found from details that assessee has sold wheat and soyabean to private person out of Mandi @2500/- and Rs. 3,500/- per quintal respectively, whereas maximum sale rate as per Mandi rate was Rs. 1165/- and Rs. 2240/-respectively. Thus, I.T.A.No. 359/Ind/2015/A.Y.10-11/Sh Bhupendra Singh Khandpure Page 3 of 5 assessee has shown agricultural income of Rs. 1, 15,560/- by higher side as per working given in chart in assessment order. Accordingly, it was disallowed. AO further found that assessee has made on spot sales of Rs. 9, 50,000/- for which no evidence filed hence, it was also disallowed. Thus total sales disallowed worked out at Rs. 10, 65,560/-. AO noted that average expenses shown by Assessee comes 27.5% on agricultural earnings. Accordingly, AO computed disallowance out of agricultural income at Rs. 7,72,530/- (1065560-293030 being 27.5% expenses) and treated same as income from other sources and reduced agricultural income at Rs. 9,17,470/-. 6. Being aggrieved, assessee filed appeal before ld. CIT (A). ld. CIT (A) has confirmed disallowance by observing that assessee has not controverted finding of A.O. 7. Being aggrieved, assessee filed appeal before this tribunal. Before us, learned counsel for assessee submitted that assessee is holding 44 acres of irrigated agricultural land and holding of family is 133 acres agricultural land. assessee has shown on spot sales of vegetables, wheat and soyabean etc. at Rs. 9,50,000/- which included sale to agriculturist of Rs. 2,55,750/- . Out of which, AO disallowed Rs. 1,15,560/- and also disallowed I.T.A.No. 359/Ind/2015/A.Y.10-11/Sh Bhupendra Singh Khandpure Page 4 of 5 Rs.9,50,000/- on spot sales aggregating to Rs. 10,65,560/- and after reducing 27.5% expenses at Rs.2,93,030/- net agricultural income of Rs.7,72,530/- was disallowed. Transfer submitted that as per agricultural land holding agricultural income per acres comes to Rs.37,555/- which is reasonable considering irrigated land and use of tractors and machinery. However, Mandi bills are not available but assessee has filed confirmation for agriculturist for sale of Rs. 2,55,750/- before AO. In support of his proposition learned counsel for assessee also cited some case laws viz: Neelam Patni 17 TTJ 135 (MP-Ind) and Anil Kumar Pachori 18 TTJ108 (MP-Jbl) wherein agricultural income shown was accepted on basis of confirmation filed by Assessee`s. 8. Ld. Senior (DR) vehemently supported order of lower authorities, and submitted that no books of accounts for agricultural produce is maintained and income is being shown on estimate basis. 9. We have heard rival submissions and have gone through orders of lower authorities and perused material available on record. We find that assessee has shown agricultural income sales at Rs. 16,90,000/- which includes Rs. 9,50,000/- including Rs. 2,55,750/-being sales of wheat and soyabean shown I.T.A.No. 359/Ind/2015/A.Y.10-11/Sh Bhupendra Singh Khandpure Page 5 of 5 at higher price as compared to Mandi sales. These sales are in nature of on spot sales made effected outside Mandi to private parties. We find that assessee has agricultural land holding at 44 acres of irrigated agricultural land. assessee has also filed confirmation of parties i.e. agriculturist, to whom sales was made. Therefore, considering circumstances and in absence of books of accounts in respect of agricultural produce being not maintained and case laws as relied on by Assessee, it would be reasonable to estimate 30% of sales amounting to Rs. 9,50,000/- to private parties as non-explained agricultural income which would be worked out to Rs. 2,85,000/-. Accordingly, addition of Rs. 2,85,000/- is confirmed and balance addition of Rs. 4,87,530/- i.e. [ Rs. 7,72,530- Rs. 2,85,000] is deleted. This ground of appeal is therefore, partly allowed. 10. In result, appeal of assessee is partly allowed. 11. order pronounced in open court on 19.10-2016 Sd/- Sd/- (D.T.GARASIA) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 19th October, 2016.OPM Bhupendra Singh, Khandpure v. ACIT Circle, Khandwa