Income From Mango Sales: Andhra Farmer Wins Tax Case As Tribunal Rejects Rs 1.2 Crore Addition

An Andhra Pradesh farmer has secured a significant tax relief, according to a recent report by The Economic Times. The Income Tax Appellate Tribunal (ITAT) in Bangalore has overturned a Rs 1.2 crore addition made by the tax department, which had questioned his income from mango sales and treated part of it as unexplained cash.

Tax Department Questions Orchard Income

The farmer owned about 22 acres of mango orchards and had reported total sales of nearly Rs 1.85 crore from mangoes and other fruits for the 2019–20 financial year. After accounting for expenses, he declared around Rs 48 lakh as income. The assessing officer, however, raised doubts over the figures. Relying on market averages and internal data from the department’s verification wing, the officer concluded that the reported turnover was far higher than what the land could yield and added Rs 1.2 crore to his income under Section 68 of the Income Tax Act.

The tax officials had not carried out any on-ground inspection or verified the buyers listed in the farmer’s records before drawing their conclusions.  The tax officers had based their conclusions on desk research, mostly online price data and general market trends, without checking the facts on site. They hadn’t visited the farm or cross-checked the names of the buyers listed in the farmer’s records.

Tribunal Questions The Department’s Approach

When the case came up before the ITAT, the farmer furnished a series of documents, affidavits from contractors, sale receipts, and proof of payments. He maintained that these records accurately reflected his genuine income from fruit sales.

The tribunal noted that none of this evidence had been disproved by the assessing officer, who had relied purely on assumptions. The tribunal pointed out that farm income can’t be judged using online price trends or broad market averages. Crop output and rates, it said, are influenced by many local factors, soil type, rainfall, and seasonal conditions, among them.

The bench found that the assessing officer had not carried out any real inquiry and had ignored the supporting records placed by the farmer. It concluded that the documents on record were genuine and consistent, and upheld the earlier ruling that deleted the Rs 1.2 crore addition. The department’s appeal was dismissed.

A Note For The Tax Department

The judgment is a reminder that once a taxpayer provides concrete evidence, the department must challenge it with facts, not estimates. The tribunal emphasised that fair assessment depends on verification and ground realities, not on averages or assumptions pulled from general data.