TaxTMI 
TaxTMI 
2022 (11) TMI 67
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Assessing Officer U/s. 143(3) of the Income Tax Act, 1961 [the Act], dated 28/12/2019. 2. Brief facts of the case are that the assessee is an individual is engaged in the business of purchase and sale of Cull Birds. The assessee also derives income from agricultural activities. The assessee filed his return of income for the AY 2017-18 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e circumstances of the case and in law, the Ld. Pr. CIT erred in law and facts in assuming jurisdiction U/s. 263 as there was no satisfaction of the duel conditions of error in the assessment order coupled with prejudice to the interests of the Revenue in the impugned assessment order dated 28/12/2019 u/s. 143(3) for AY 2017-18. 2. On the facts and in the circumstances of the case and in law, the Ld. Pr. CIT erred in law and facts in his observation that the Ld. AO has not disallowed the cash payments in excess of Rs. 20,000/- for broiler purchases from a poultry farming company, since no such disallowance is permissible when business income of the appellant was reckoned by the Ld. AO on estimate; even the said estimate itself was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed 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 submitted that the provisions of section 40A(2) read with Rule 6DD of the Income Tax Rules, 19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le 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 the Ld. 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 Ld. AO is not erroneous or prejudicial on this ground. 6. With regard to the agricultural income of Rs. 1,72,140/-, the Ld. 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 tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bandry (including livestock, meat, hides and skins) or dairy or poultry farming; or (iii) fish or fish products; or (iv) the products of horticulture or apiculture, to the cultivator, grower or producer of such articles, produce or products; It is also observed that the Ld. Pr. CIT has not objected to the cash payment made to M/s. Venkateswara Hatcheries Private Limited for Rs. 13,04,048/-. Further, it is noted from the submissions of the assessee that the assessee has submitted SFT 13 for the cash payments to the suppliers of Broiler birds and poultry feedings. Since the Ld. AO has recorded in his order that he has verified the copies of purchases, sales, bills, vouchers, stock register etc., and has formed an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....[(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 ....