9911796707
TMI Blog1980 (4) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the AAC directing the ITO to allow the deduction under s. 80JJ of the IT Act. The other grievance of the Revenue is about the AAC holding that the amount of Rs. 14,000 treated by the ITO as the assessee's income from undisclosed sources, was its income from Poultry farming. 3. In regard to the deduction allowed by the AAC under s. 80JJ, I have heard the rival submissions. The assessee purchased one day old broiler chick and, after bringing them up for a period of not more than eight weeks, sold them. It was explained that the broiler chickens were of a particular hybrid breed which developed greater body weight and thus contained more meat, which was quite soft and was suitable for broiling. According to the Revenue, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later on, they were moved to other sheds where they were fed and looked after till their sale. It was next stated that poultry was now a much developed science and apart from producing eggs, there was also specialisation in breeding different classes of chicken and that broiler chicken was one such variety which was raised for meat purposes. It was further stated that the assessee was breeding broiler chicken variety only. It was also contended that intention was not to purchase and sell chicks, but to purchase one day old chicks and rear them up into broilers and then sell them. It was also claimed that the broiler chicken were sold after dressing up, but no finding on these lines is recorded in the orders of the authorities below. Attent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . All this activity, in my view, clearly amounts to poultry farming. It is not necessary that every poultry farmer must maintain hens, produce eggs, then get them hatched and bring out chicks and then rear them up as chickens for sale. The assessee, in this case, as stated earlier, is raising chicks into broiler chickens for meat. The opinion of the expert proceeds on the dictionary meaning and it is clearly stated therein that poultry farming may be for egg production purpose or for meat purpose and broiler farming was also poultry farming. In my opinion, the view of the AAC granting deduction under s. 80JJ is quite correct and it is upheld. 5. The next contention of the Revenue is about the amount of Rs. 14,000 and the only contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the the value of the livestock, i.e. chicks as on 31st March, 1975, was Rs. 43,000, but on 31st March, 1976, it had come down to Rs. 28,150. The AAC did take into consideration this argument of the assessee's counsel, but reached conclusion that the sales of Rs.14,000 were diverted by the assessee for repaying the loan and therefore, taking that factual position into consideration, instead of considering the sum of Rs. 14,000 as income from undisclosed sources, the ITO should have treated the amount as the assessee's income from poultry farming while computing his taxable income. With this conclusion of the AAC, both the sides are aggrieved. 7. I have heard the submissions of both the sides and feel that the approach of both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roach of the AAC when he mixes up the issue and holds that there was diversion of sales by the assessee to the extent of Rs. 14,000. The assessee has not been assessed by taking note of his sales and the assessment is framed by accepting the income disclosed by him. The AAC has failed to understand the issue involved and his order, therefore, is both unintelligible and unsustainable. Despite taking note of the fact that he accepted the decrease in the value of an asset, he still proceeded to sustain an addition of Rs. 14,000. It is not difficult to understand that, in a business money comes in, in the form of sale proceeds and the profit is embedded in the sale proceeds. Out of the sale proceeds and cash balance, the payments can be made fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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