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TMI Blog2024 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... so contains some duplicate entries. It is also an admitted fact that maintaining books of accounts in this line of business (Aqua Culture) which is a non-organized sector, which is further evident from the fact that the CBDT has issued Instruction No. 8/2014, dated 17/10/2014 that the income with respect to Fish Culture in Andhra Pradesh may be decided by committee comprising of Two Commissioners, Two Representatives of Farmer s Association to determine the income that may be estimated for that Financial Year. Therefore, we also find that the AO has estimated the income based on the net receipts calculated as per the seized material and by apportioning it on the basis of the accounted turnover of three entities dealing with Aqua Culture business of Usha Bala Group viz., Usha Bala Agro Farms (P) Ltd, UBK Hotels Resorts (P) Ltd and VBK Exim (P) Ltd. AO has rejected the reply to the show cause notice without assigning proper reasons by merely relying on the estimation without any justification. AO has not given any break-up of the income by deducting the bund area and also the income from Fish Culture with respect to the leased lands. We therefore find that the Ld.CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -22/1041719889(1), dated 27/03/2022 for the AY 2015-16. 3. Brief facts of the case are that the assessee is a Private Limited Company deriving income from Aqua Culture filed its return of income on 29/09/2015 declaring total income of Rs. 21,56,660/-. Subsequently, a search and seizure operation u/s. 132 of the Act was conducted on 28/01/2021 in the case of the assessee. Since the impugned assessment year falls under the block of six years a notice u/s. 153A of the Act was issued. In response, the assessee filed its return of income on 29/11/2021 admitting total income of Rs. 1,29,56,660/- by including an additional income of Rs. 1,08,00,000/-. Subsequently, the Ld. AO issued notices u/s. 143(2) and 142(1) of the Act. In response the assessee furnished the information as called for by the Ld. AO from time to time. During the search operations, certain amount of cash was seized from the lockers. Further, the Ld. AO also observed that the seized material contains hand written books which contains the details of date wise receipts and payments pertaining to the entities of Usha Bala Group. The Ld. AO requested Sri VV Balakrishna Rao to explain the nature of transactions. In respons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hotels Resorts (P) Ltd _ 65 65 3. VBK Exim (P) Ltd 52 52 Total 130 227 357 The Ld. AO further observed that since the Aqua Culture activity being operated in 357 Acres, the exact entity of each transaction could not be identified by Sri VV Balakrishna Rao. Therefore, the Ld. AO based on the seized material vide Annexures UPF/RP/EL/41, 74, 81, 82, 90 to 155 observed that there are various types of unaccounted receipts and payments including Aqua culture pertaining to the entities Usha Bala Agro Farms Pvt Ltd (UBAFPL), UBK Hotels Resorts Pvt Ltd (UBKHRPL) and VBK Exim Pvt Ltd (VBKEPL). The details of the receipts and payments for the FY 2014-15 relevant to the AY 2015-16 are segregated in respect of UBAF UBKH VBKE as under: Transaction Type Receipts Transaction Type Payments Fish Sales 47502079 Payments 420641 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: FY Undisclosed income worked out in Rs. 2014-15 45592824 The Ld. AO also noticed that this unaccounted income generated by various entities was used by the assessee as on money component in purchase of properties like land, building and Gold. The Ld. AO therefore issued a show cause notice to the assessee as to why the difference between the unaccounted income worked on the basis of incriminating material seized of Rs. 4,55,92,824/- and Rs. 1,08,00,000/- admitted in the return of income filed u/s. 153A of the Act amounting to Rs. 3,47,92,824/- should not be added to the total income for the year under consideration as undisclosed income as per the seized hand written books. In response to the show cause notice, the assessee referred to the statement recorded on 18/08/2021 and submitted that maintaining regular books of account is not possible in Aqua Culture because it is a non-organized sector. The assessee further also submitted that the Ld. AO has arrived at the income on estimation on the lands given on own culture and leased rental receipts could not be accepted since the activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticularly with reference to the interior areas lacking banking facilities, availability of water, lack of knowledge of accounting, the vagaries of nature etc., while deciding the above estimation which will not have any relevance when incriminating material was seized evidencing undisclosed income? 3. The Ld. CIT(A) has erred in overlooking the fact that determination of the assessee s income from Aqua business solely on estimation basis will not be applicable since the Board s Circular as also the decision in the case of M/s. Krishna Fisheries (ITA No. 305 of 330/Vizag/2015) did not have the situation of existence of incriminating material evidencing undisclosed income from aqua business in addition to the facts of non-maintenance of books of account. 4. The Ld. CIT (A) is not correct in placing reliance on the decision of the jurisdiction ITAT in the case of M/s. Krishna Fisheries as the facts of the said case are different from that of the instant case. 5. Any other ground that may be raised with the permission of Bench. 5. Grounds No. 1 and 5 are general in nature and therefore they need no adjudication. 6. Grounds No. 2, 3 4 are with respect t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 168 77,123 2016-17 16,82,368 1,08,00,000 1,24,82,368 168 74,300 2017-18 15,35,102 1,08,00,000 1,23,35,102 168 73,423 2018-19 15,88,732 1,08,00,000 1,23,88,732 168 73,742 2019-20 15,16,588 1,08,00,000 1,23,16,588 168 73,313 Calculation of per Acre income admitted without deducting bunds portion AY Income as per section 139(1) Admitted income in 153 returns Total income Total acreage cultivated Per acre income 2015-16 21,56,660 1,08,00,000 1,29,56,660 168 53,986 2016-17 16,82,368 1,08,00,000 1,24,82,368 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019-20 2,79,06,292 2,79,06,292 240 1,16,276 The Ld. AR therefore pleaded that since the assessee has declared higher income, the order of the Ld. CIT(A) be upheld. 7. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is an admitted fact that the assessee has offered an additional income of Rs. 1,08,00,000/- while filing return of income u/s. 153A of the Act which translates to Rs. 74,458/- per Acre. Based on the land holdings of the assessee with respect to Aqua Culture it is noticed that the assessee has admitted an average income of Rs. 74,458/- as detailed in its submissions. Further, the Ld. AO has merely relied on the seized material but has not corroborated with the additional evidence while calculating the revenue per acre estimated for the business of Aqua Culture by the assessee and its group companies. It is also noticed that Sri VV Balakrishna Rao in his sworn statement has stated that it is a rough version of daily cash receipts and payments which also contains some duplicate entrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o infirmity in the order of the Ld. CIT(A) and thereby dismiss the grounds raised by the Revenue. 8. In the result, appeal of the Revenue is dismissed. I.T.A. Nos. 204, 205, 206 207/Viz/2023 Assessment Years: 2016-17 to 2019-20 9. These appeals are filed by the Revenue against the orders of the Ld. CIT(A), Visakhapatnam-3 arising out of the orders passed u/s. 153A of the Act. 10. In all these appeals for the AYs 2016-17 to 2019-20, the Revenue has raised identical grounds to that of the grounds of appeal for the AY 2015-16. Therefore, our decision given on the issues raised by the Revenue in its appeal for the AY 2015-16 which is adjudicated in the foregoing paragraphs of this order in ITA No. 203/Viz/2023, mutatis mutandis applies to the issues raised by the Revenue in its appeals for the AYs 2016-17 to 2019. 20. Accordingly, grounds raised by the Revenue are dismissed. 11. In the result, appeals of the Revenue for the AYs 2016-17 to 2019-20 are dismissed. C.O. Nos. 23, 24, 25, 26 27/Viz/2023 (In I.T.A. Nos.203, 204, 205, 206 207/Viz/2023) (Assessment Years: 2015-16 to 2019-20) 12. All these Cross Objections are raised by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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