2019 (1) TMI 1067

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....e of convenience as under. I.T.A Nos. 361, 362 and 363/Viz/2017 - Revenue's Appeals 2. The revenue has raised as many as five common grounds in all the appeals which reads as under : (a) The order of the CIT(A) is not acceptable on the facts of the case and the order is liable to be vitiated. (b) The CIT(A) erred in reducing the rate of percentage of profit in the assessee's case, ignoring that the principles of resjudicata are not applicable to the income tax proceedings. (c) The CIT(A) is not justified in making a general observation that the same assessing officer has estimated the profit margin at 0.4% of the turnover, to hold that the estimation in this case is at a higher margin. (d) The CIT(A) is not correct in adjudicating an issue not before him in the grounds of appeal, thereby directing the AO to allow depreciation on crates. (e) Any other ground that may be urged at the time of appeal hearing. 3. Ground No. (a) and (e) are general in nature which does not require specific adjudication. 4. Ground No. (b) and (c) are related to the estimation of income. The assessee is engaged in the fish trading and packing. A surv....

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.... as under : (a) MHM Fish Packers A.Y. Amount (Rs.) Turnover Rs. 2011-12 52,97,957/- 52,97,95,792/- 2012-13 52,20,913/- 52,20,91,378/- 2013-14 26,33,237/- 26,33,23,685/- (b) MHM Fish Trading Company A.Y. Amount (Rs.) Turnover Rs. 2013-14 1,20,70,349  1,20,70,34,965/- 5. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) observed that most of the assessees in Andhra Pradesh engaged in this type of business activity and centered in Godavari and Krishna districts. Fish trading is an unorganized activity and the proper books of accounts are not maintained by the traders and farmers. Perusal of various assessment records completed under scrutiny shows that in most of the cases, where the turnover ranges between 10 crores to 100 crores, the incomes have been estimated by the AOs at 0.25% to 0.4% depending on the facts of each case. The Ld.Pr.CIT further observed that the same AO who made the assessment in the case of the assessee had assessed in comparable cases estimating the net profit @0.4% in the case of Mr.Abdul Kalam Ajad. Therefore, the Ld.CIT(A) viewed tha....

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.... as other cases relied upon by the Ld.CIT(A). For the A.Y. 2013-14 in the case of Mr.Abdul Kalam Azad, the AO estimated the income at 0.4% after rejecting the books of accounts. Similarly in the case of Adabala Narsimha, the same AO estimated the income @0.4% clear of expenses. During the appeal hearing the department could not place any evidence before us to controvert the finding given by the Ld.CIT(A) or to substantiate the contention of the department that income estimated by the Ld.CIT(A) is less and assessee gets more income than the comparable cases decided by the AO. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. The appeals of the revenue on these grounds are dismissed. 8. Ground No.(d) is related to the depreciation on crates. The AO has computed the rental income of the assessee received from crates separately apart from the estimation of income from fish trading.This issue is involved in the case of MHM Fish Packers for the A.Ys 2011-12, 2012-13 and 2013-14. However, the AO did not allow any expenditure attributable to earning of income from the fish crates. The assessee went on appeal before the CIT(A) and t....

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....epreciation on crates, the AO has not given any such finding as to how it would take care of the expenses of income relating to crates. The Ld.AR argued that since the income of crates is assessed separately, he requested to allow the interest on bank loan for acquiring the fish crates apart from the depreciation. 14. We have heard both the parties and perused the material placed on record. The AO has assessed the income from fish trading separately and taxed the entire income received from the fish crates separately. The AO did not allow the expenditure attributable to earning of income from fish crates. The income has to be computed in accordance with the provisions of income tax after allowing the deductions or the expenditure attributable to the earning of the income. Though the Ld.DR argued that no separate expenditure required to be allowed for fish crates the Ld.DR did not place any valid argument with relevant documentation before us to support his argument. Further the AO in the assessment order did not specify the reasons for not allowing the expenditure. Hence we are unable to accept the contention of the revenue that no other expenditure required to allowed for incom....