The ITAT Rajkot has partly allowed an appeal for AY 2017-18 by substantially reducing the addition made on account of alleged excess agricultural income, restricting the addition to ₹50,000 on an ad-hoc basis. The Assessing Officer had initially estimated the net agricultural income at ₹86,204, treating the balance amount of ₹4.81 lakh as unexplained income under section 68, which was confirmed by the CIT(A), but the Tribunal considered the smallness of the disputed amount and the agreement between the parties for an ad-hoc resolution.
Key Facts:
- Case: Samir Sarmanbhai Maru Vs ITO (ITAT Rajkot)
- AY: 2017-18
- Section: 68 of the Income Tax Act, 1961
- Addition: ₹4,81,036, restricted to ₹50,000 on an ad-hoc basis
- Date of Order: 12/01/2026
The ITAT Rajkot’s decision highlights the importance of considering the peculiar facts and circumstances of each case. The Tribunal noted that agricultural yield depends on various factors such as land quality, climate, and irrigation, and university data prepared for academic purposes cannot be mechanically applied to an individual assessee’s case. The Assessing Officer’s estimation of net agricultural income at ₹86,204 was based on data collected from Agriculture University, Junagadh, which the Tribunal found was not applicable to the assessee’s case. The Tribunal’s decision to restrict the addition to ₹50,000 on an ad-hoc basis was influenced by the smallness of the disputed amount and the agreement between the parties.
The ITAT Rajkot’s decision has significant implications for taxpayers with agricultural income. It emphasizes the need for the Assessing Officer to consider the unique factors affecting agricultural yield and not rely solely on university data. Taxpayers should maintain accurate records of their agricultural income and expenses to support their claims. In cases where the disputed amount is small, taxpayers may be able to negotiate an ad-hoc resolution with the Revenue. However, it is essential to note that the Tribunal’s decision should not be treated as a precedent for other years or cases.
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