Income-tax addition under section 69A fails where agricultural income was supported by land records, produce bills and bank entries

5-Second Takeaway

The addition under section 69A for unexplained agricultural income was deleted because the assessee had filed land extracts, produce and trading bills, and bank statements showing the related credit entries. The court noted that the revenue had accepted the assessee’s agricultural income in earlier years, and a revised computation alone could not justify disallowance.

The dispute concerned an addition made under section 69A on the footing that the assessee’s agricultural income was unexplained. The assessee relied on documentary material including land extracts, bills relating to agricultural produce and trading, and bank statements showing the relevant credit entries.

The assessing officer disregarded those materials and proceeded to treat the amount as unexplained income. The record, however, showed that the assessee’s agricultural income had been accepted by the department in earlier years and that the income claimed for the year under consideration arose from the same agricultural activity.

The decision holds that a revised computation by itself was not a proper basis to reject the agricultural income claim. In the face of the supporting records, the section 69A addition could not be sustained.

The result was deletion of the addition treated as unexplained agricultural income.