2019 (2) TMI 1319 - AT - Income Tax

Reopening of assessment - Estimating of income from fish ponds - survey u/s 133A - AO found that the assessee are engaged in the pisci culture in 86 acres of fish tanks taken on lease - HELD THAT - In the instant case, the AO has reopened the assessment since the income declared by the assessee was less than ₹ 15,000/- per acre. In response to the notice, the assessee have admitted the income @ ₹ 15,000/- per acre of water spread area and the lower authorities failed to bring any evidence or material to support the contention that the income is more than ₹ 15,000/- per acre admitted by the assessee. Therefore, respectfully following the view taken by this Tribunal we hold that estimation of income at ₹ 15,000/- per acre is reasonable. Accordingly, we set aside the orders of the lower authorities and allow the appeals of the assessee.

Summary

Issues:
Addition of income from fish ponds based on estimation.

Analysis:
The appeals were filed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Years 2010-11 to 2012-13, regarding the addition of income from fish ponds. The Assessing Officer (AO) conducted a survey and found that the assessees were engaged in pisci culture in 86 acres of fish tanks. The AO estimated the income at ?30,000 per acre, resulting in an addition of ?9 lakhs in each case. The assessees filed revised returns admitting income at ?15,000 per acre. The AO completed the assessment estimating income at ?30,000 per acre, without providing a basis for this estimation.

Upon appeal, the CIT(A) confirmed the AO's order. However, during the hearing at the Tribunal, it was noted that there was no basis for estimating the income at ?30,000 per acre. The Tribunal referred to a previous case where income was estimated at ?13,300 per acre, considering the lack of maintained books of accounts. In the absence of evidence supporting the higher estimation, the Tribunal held that ?15,000 per acre was a reasonable estimation.

Therefore, the Tribunal set aside the lower authorities' orders and allowed the appeals of the assessees, concluding that the estimation of income at ?15,000 per acre was reasonable.

In summary, the judgment revolved around the estimation of income from fish ponds, with the Tribunal ultimately holding that the lower authorities had failed to provide sufficient evidence to support the higher estimation of ?30,000 per acre. The Tribunal referred to a previous case to establish that an estimation of ?15,000 per acre was reasonable in the absence of maintained books of accounts.