TaxTMI 
TaxTMI 
2017 (4) TMI 909
X X X X Extracts X X X X
X X X X Extracts X X X X
....s from stock available for sale. 3. Facts apropos are that assessee, engaged in the business of poultry and feed was subjected to search on 05.08.2011. Simultaneously, proceedings under Section 133A of the Income-tax Act, 1961 (in short 'the Act') were also initiated in the premises of the group companies. In response to notice under Section 153A of the Act, assessee filed return for the impugned assessment years declaring the following income:- Sl. No. Assessment Year Date of filing of return u/s 139(1) Income originally returned u/s 139(1) (Rs.) Date of filing of return in response to 153A Notice Returned Income u/s. 153A (Rs.) Additional Income Offered (Rs.) 1. 2006-07 19.10.06 4,06,39,540 (Firm) 21.08.2013 4,18,70,540 12,31,000 2. 2007-08 23.10.07 23.10.07 8,39,051 (firm) 4,90,96,061 (Co) 21.08.2013 6,52,40,210 1,34,87,839 3. 2008-09 29.07.08 1,00,15,920 21.08.2013 2,61,70,510 96,52,840 4. 2009-10 08.09.09 15,79,84,730 21.08.2013 16,49,96,890 70,12,159 5. 2010-11 20.08.10 41,65,54,860 21.08.2013 42,93,52,800 1,27,97,940 6. 2011-12 29.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....17 Average poultry droppings sales per annum in Tonn 280 308 350 434 532 602 205 Average selling price of poultry droppings per annum per Tonn 600 640 680 710 740 760 760 Average manure total sales value per annum in Rupees 168000 197120 238000 308140 393680 457520 155800 From the above data, the assessee worked out the additional income from sale of poultry droppings as under:- F.Y. 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Average Poultry droppings used for own consumption per annum in Tons 1680 2848 2100 2604 3192 3612 1233 Average selling price of poultry droppings per annum per Ton 600 640 680 710 740 760 760 Average manure consumption per annum in Rupees (A) 1008000 1182720 1428000 1848840 2362080 2745120 937080 Average poultry droppings sales per annum in Tonn 280 308 350 434 532 602 205 Average manure total sales value per annum in Rupees (B) 168000 197120 238000 308140 393680 457520 155800 Additional income on account of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... CIT(Appeals), the market rate of poultry manure was only Rs. 1200 per tipper, viz. for a quantity of two tonnes. Thus, according to him, average price for manure was only Rs. 600/-. He held that the rate of Rs. 750 per ton fixed by the Assessing Officer for 2006-07 was incorrect. He directed the A.O. to adopt Rs. 750/- per tonne for assessment year 2012-13 and work out on the rates on reverse basis upto assessment year 2006-07. Ld. CIT(Appeals) also directed the A.O. to exclude the birds grown under contract farming from the stock of birds while working out the bird droppings. 7. Now before us, the Ld. Departmental Representative submitted that the average rate of poultry dropping at 19.10 Kgs per bird was correctly worked out by the Assessing Officer considering the facts and circumstances of the case. According to him, Assessing Officer was having an expert opinion obtained by the Department which justified the quantity of poultry dropping fixed by the Assessing Officer. Further, as per the Ld. D.R., the CIT(Appeals) fell in error in giving directions to the Assessing Officer to exclude the birds grown through contract farms while working out the stock of poultry droppings av....
X X X X Extracts X X X X
X X X X Extracts X X X X
....opinion of Prof. D. Narahari, Senior Vice President of Indian Poultry Science Association, we are of the opinion that the CIT(Appeals) was justified in directing the A.O. to accept the expert opinion in toto. Assessee itself had estimated the droppings per year per bird at 14 KGs, which was higher than the estimation of 10 KGs per bird made by the expert. We are, therefore, of the opinion that the order of the CIT(Appeals) cannot be faulted on this count. 10. Coming to the question of estimation of reduction of bird dropping, for birds grown by contracting farms, the relevant observation of the CIT(Appeals) is reproduced hereunder:- "7.4 It is submitted before me that the appellant grows parent birds in his own farm and also with contracting farms. As per the existing practice in the trade, poultry contracting farmers gets the growing charges per bird periodically in addition to that poultry manure. All bird droppings belong to the contracting poultry farmers. On perusal of the assessment order I find that A.O. has calculated bird droppings based on the closing stock of birds. It is apparently seen that assessing officer has not calculated the number of birds grown at contrac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee to explain the source of on-money payment of Rs. 3.366 Crores. In reply, it was stated by the assessee that a sum of Rs. 1,71,30,000/- were unexplained cash credits, Rs. 30,00,000/- was from unaccounted sale of manure and broken eggs and the balance was withdrawn from accumulated drawings of his family members. In the return filed by the assessee for assessment year 2010-11, assessee had admitted only Rs. 98,60,180/- as on-money payment for purchase of above property. The balance was claimed to have been made out of sale of poultry dropping. Assessing Officer was of the opinion that the assessee could not produce any evidence to show the source for the balance of Rs. 2,37,99,820/-. He made an addition of said amount. 13. In its appeal before the CIT(Appeals), argument of the assessee was that realization from sale of bird droppings, which was not accounted, should be considered for telescoping with the on14 money payment of Rs. 2,37,99,820/-. The CIT(Appeals) accepted this contention and deleted the addition. 14. Now before us, the Ld. Departmental Representative submitted that it was essential to correctly work out the unaccounted income from sale of bird droppings fo....