TMI Blog2019 (1) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 CIT(A) and the same is upheld. The appeals of the revenue on these grounds are dismissed. Depreciation on crates - Held that:- Grounds of appeal before the CIT(A) in MHM Fish Packers, the assessee challenged the addition made by the AO for assessment of income separately on the fish crates without allowing the expenses relatable to earning the income on fish crates. The depreciation is an expenditure which required to be allowed while computing the income. Therefore, contention of the revenue that the CIT(A) has allowed the depreciation on crates without being agitated before him is incorrect. Therefore we dismiss the revenues appeal in ground with regard to depreciation. Estimation of income from the fish trading separately and the income from fish crates separately - Held that:- In this case, though the AO has ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 survey u/s 133A was conducted in the assessee s case on 20.11.2012. During the course of survey as well as post survey enquiries, the assessee submitted that the firm is carrying on commission business in purchase and sale of fish. The Assessing Officer (AO) observed from the return of income that it never claimed expenditure like freight expenses, purchase of packing material, ice and labour expenses in its P L a/c and observed the existence of sundry creditors and sundry debtors as at the end of the year. The AO also foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 that in the assessee s case also estimation of income at 0.4% is reasonable and directed the AO to make the estimation of income @0.40% for the impugned assessment years and accordingly allowed the appeal of the assessee partly. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Ld.CIT(A) directed the AO to allow depreciation on fish crates. 9. Against the order of the Ld.CIT(A), the department is in appeal agitating the allowance of depreciation and also raised the ground that the Ld.CIT(A) is incorr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 income from fish crates. In this case, though the AO has taxed the entire receipt from fish crates as income and did not allow the expenditure relatable to earning of income. The Ld.AR submitted before us that the assessee would be satis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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