9911796707
TMI Blog2022 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts. In this trade of purchase and sale of Broilers and Cull Bird, segregation of sale bills and the veracity of the assessee s transactions are practically difficult and hence the books of accounts cannot be relied upon. In these circumstances AO has estimated the net profit which is considered reasonable. Further, the net profit ratio of 0.76% declared by the assessee in the earlier years was not disputed by the Ld. AO. We therefore, find the estimation is reasonable and the order of the AO is not erroneous or prejudicial on this ground. Agricultural income - AR submitted that it has been received from the Andhra Pradesh Civil Supplies Corporation into Canara Bank account of the assessee. It was also submitted that the assessee s daughter who was owning agricultural lands and a copy of the Pattadar Pass Book was submitted as a proof of such ownership. The daughter of the assessee Ms. Gude Kalyani also submitted that she derived the agricultural income and has gifted the same to her father due to his illness. The assessee has mistakenly disclosed this as an agricultural income while filing his return of income. The observation of the Pr. CIT that the assessee did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17-18 on 23/10/2017 admitting a total income of Rs. 6,82,310/- and agricultural income of Rs.1,72,140/-. Subsequently, the return was selected for complete scrutiny to examine the abnormal increase in the cash deposits during the demonetization. Accordingly, statutory notices U/s. 143(2) and 142(1) of the Act dated 4/9/2018 and 9/7/2018 respectively were issued and served on the assessee. Further, a show cause notice dated 22/12/2019 was issued to explain the sources of cash deposits and low profit on turnover over the preceding year. In response to the notices, the assessee representative submitted the books of accounts and explained that the purchase and sale of Cull Bird are mostly in cash. Considering the explanation of the assessee, the Ld. AO non-convinced with the supporting evidences which are mostly self-made vouchers, estimated the net profit as 0.85% on the turnover of Rs. 9,56,17,104/- as against the net profit of 0.76% admitted by the assessee is his return of income. The Ld. Pr. CIT exercising this powers U/s. 263 of the Act considered the assessment order as erroneous insofar as it is prejudicial to the interest of the revenue. The detailed show cause notice U/s. 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding the data filed before the Ld. AO again filed before the Ld. Pr. CIT) before partially setting aside the assessment order. 6. On the facts and in the circumstances of the case and in law, the Ld. Pr. CIT s order of partial set-aside is erroneous on facts and in law. 7. Your appellant craves leave to add or amend any of the above grounds of appeal. 4. The Ld. Authorized Representative [Ld. AR] argued that the Ld. AO has estimated the profit @ 0.85% against 0.76% admitted by the assessee. The Ld. AR further submitted that an amount of Rs. 9 lakhs was deposited during the demonetization period. He also further submitted that the assessee has mistakenly declared the agricultural income received by his daughter in the return of income filed by the assessee. The Ld. AR submitted that there is no decrease in the net profit as compared to earlier years and hence the estimation of a higher percentage by the Ld. AO could not be accepted. The Ld. AR also submitted that there is no finding in the assessment order regarding the rejection of books of accounts but the Ld. AO has erroneously estimated the income without rejecting the books of account. Ld. AR also further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and a copy of the Pattadar Pass Book was submitted as a proof of such ownership. The daughter of the assessee Ms. Gude Kalyani also submitted that she derived the agricultural income and has gifted the same to her father due to his illness. The assessee has mistakenly disclosed this as an agricultural income while filing his return of income. The observation of the Ld. Pr. CIT that the assessee did not claim any expenditure for earning such income could not be accepted because of the fact of confirmation of gift received from the assessee s daughter where she has earned agricultural income. 7. With regard to the cash payments to M/s. CPF (India) Private Limited the Ld. Pr. CIT has invoked the provisions of section 40(A)(3) of the Act and observed that exemption under Rule 6DD of the IT Rules is not available for these transactions. Further, the Ld. Pr. CIT has also recorded in his order that M/s. CPF (India) Private Limited vide letter dated 21/1/2022 has confirmed the receipt of Rs. 16,99,711/- in cash from the assessee towards supply of poultry feeding to the assessee. The Rule 6DD(e) of the Income Tax Rules (Rules) clearly exempts the payments of cash for the purpose of pou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers under section 263. In the case strial Co Ltd v. CIT [(2000) 243 ITR 83 (SC)], Hon'ble Supreme Court has held that Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. The test for what is the least expected of a prudent, judicious and responsible Assessing Officer in the normal course of his assessment work, or what constitutes a permissible course of action for the Assessing Officer, is not what he should have done in the ideal circumstances, but what an Assessing Officer, in the course of his performance of his duties as an Assessing Officer should, as a prudent, judicious or reasonable public servant, reasonably do bonafide in a real-life situation. It is also important to bear in mind the fact that lack of bonafides or unre ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
