9911796707
TMI Blog2023 (6) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order dated 29.06.2022 passed by the Income Tax Appellate Tribunal, Hyderabad Bench 'B', Hyderabad (briefly referred to hereinafter as 'the Tribunal') in ITA No.293/Hyd/2019 for the assessment year 2013-14. 3. The appeal has been preferred proposing the following as substantial question of law: Whether on the facts and in the circumstances of the case, Tribunal was justified in holding that common expenditure for own production and sale of seeds and trading in other seeds can be apportioned between both on the basis of Cost of Goods Sold (CoGS) as against the turnover of each for arriving at profits? 4. Respondent is an assessee under the Act having the status of a company. 5. As already pointed out above, the assessment year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73% and 89.27%. It was thereafter that total income of the assessee was computed on the basis of the aforesaid turnover ratio. While taxable income was assessed at Rs. 8,87,17,570.00, agricultural income was computed at Rs. 32,05,38,505.00. 8. Being aggrieved by the above, assessee preferred appeal before the Commissioner of Income Tax (Appeals) 4, Hyderabad i.e., (briefly referred to hereinafter as 'CIT(A)'). By the appellate order dated 21.12.2018, CIT(A) disagreed with the views expressed by the assessing officer. He opined that the method adopted by the assessee is acceptable for the following reasons: "(i) It is to be understood that the activity of selling hybrid seeds is a composite activity. The sale of hybrid seeds comprises of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural activity and income from trading activity was modified. 10. Assailing the aforesaid order of the CIT(A) dated 21.12.2018, revenue filed appeal before the Tribunal which was heard along with two other appeals filed by the revenue on the same issue pertaining to two other assessment years. 11. At the outset, Tribunal observed that any of the methodology, be it either on the basis of cost of goods sold or on the turnover of different activities would suffer certain limitations. Each method will have its own variance of the estimate. It was thereafter Tribunal held as follows: "11. We have perused the impugned order. It is a fact that the assessee supplies seeds to its distributors located in the states of Kerala, Andhra Pradesh a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nascertained or unreasonable. With this view of the matter, we allow the contentions of the assessee and uphold the findings of the Ld. CIT(A). Accordingly ITA No. 294/Hyd/2019 is also dismissed. 13. In the result, all the appeals of the Revenue are dismissed." 12. Thus from the above it is seen that according to the Tribunal, view taken by CIT(A) was a reasonable one and cannot be termed as perverse. More so, in view of the seasonal nature of the business carried out by the assessee and the short shelf life of the seeds, Tribunal has held that it is imperative for the assessee to take into account the quantity of unsold seeds at the end of the year and the need to re-validate their further utility and to take them into stock for the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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