DCIT, Coimbatore V. Shanthi Feeds (P) LTd., Coimbatore

ITA 311/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7969 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 15-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Keywords: Unexplained cash credit; Business income
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 133A; 153A; 205; 69B; 139(1); 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI [ CAMP: COIMBATORE ] . . . , ! .#$#%, ' !( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NOS.307, 308, 309, 310, 311, 312 & 313/MDS/2016 % *% / ASSESSMENT YEARS : 2006-07 TO 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, COIMBATORE 641 018. V. M/S SHANTHI FEEDS (P) LTD., 6/15, MAIN ROAD, PAPPAMPATTI POST, ONDIPUDUR, COIMBATORE 641 016. PAN : AAJCS 8030 J (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT ./,- 0 1 / RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE 2 0 3' / DATE OF HEARING : 18.01.2017 45* 0 3' / DATE OF PRONOUNCEMENT : 13.02.2017 / O R D E R PER BENCH: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST A CONSOLIDATED ORDER DATED 03.09.2015 OF THE COMMISSI ONER OF INCOME TAX (APPEALS) 18, CHENNAI, FOR THE IMPUGNED ASSES SMENT YEARS. 2 I.T.A. NOS.307 TO 313/MDS/16 2. GROUNDS TAKEN BY THE REVENUE ARE SIMILAR FOR ALL THE YEARS, EXCEPT FOR ONE OTHER GROUND TAKEN FOR ASSESSMENT YE AR 2010-11, WHICH WILL BE DEALT WITH SEPARATELY. THE COMMON GROUNDS RAISED BY THE DEPARTMENT ARE CONCERNED WITH AN ESTIMATED ADDITION MADE BY THE ASSESSING OFFICER FOR SALE OF MANURE IN THE NATURE OF POULTRY DROPPINGS WHICH WAS DELETED BY THE COMMISSIONER OF INCOME TAX (APPEALS), AND ON THE DIRECTION OF LD. CIT(APPEALS) TO EXCLUDE DRO PPING OF BIRDS REARED BY CONTRACT FARMERS FROM STOCK AVAILABLE FOR SALE. 3. FACTS APROPOS ARE THAT ASSESSEE, ENGAGED IN THE BUSINESS OF POULTRY AND FEED WAS SUBJECTED TO SEARCH ON 05.08.2 011. SIMULTANEOUSLY, PROCEEDINGS UNDER SECTION 133A OF T HE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') WERE ALSO INITIATED IN THE PREMISES OF THE GROUP COMPANIES. IN RESPONSE TO NOTICE UNDER SECTI ON 153A OF THE ACT, ASSESSEE FILED RETURN FOR THE IMPUGNED ASSESSM ENT YEARS DECLARING THE FOLLOWING INCOME:- SL. NO. ASSESS- MENT YEAR DATE OF FILING OF RETURN U/S 139(1) INCOME ORIGINALLY RETURNED U/S 139(1) ( ` ) DATE OF FILING OF RETURN IN RESPONSE TO 153A NOTICE RETURNED INCOME U/S. 153A ( ` ) ADDITIONAL INCOME OFFERED ( ` ) 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 16,49,9 6,890 70,12,159 5. 2010-11 20.08.10 41,65,54,860 21.08.2013 42,93,5 2,800 1,27,97,940 3 I.T.A. NOS.307 TO 313/MDS/16 6. 2011-12 29.09.11 69,12,47,360 21.08.2013 70,10,7 6,190 98,28,831 7. 2012-13 11.09.12 40,20,09,300 21.08.2013 40,84,8 6,750 64,77,448 4. IN A STATEMENT RECORDED FROM MANAGING DIRECTOR O F THE ASSESSEE UNDER SECTION132(4) OF THE ACT, IT SEEMS H E CONFIRMED SALE OF MANURE IN THE NATURE OF POULTRY DROPPINGS WHICH WERE NOT ACCOUNTED. HE ALSO STATED THAT INVOICES WERE NOT R AISED BY THE ASSESSEE FOR SALE OF POULTRY DROPPINGS. THE A.O., DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SOUGHT OPINION FROM PROFESS OR & HEAD OF POULTRY SCIENCES, VETERINARY COLLEGE & RESEARCH INS TITUTE, NAMAKKAL. THE SAID PROFESSOR OPINED THAT THE AVERAGE POULTRY DROPPING PER BIRD PER ANNUM WOULD BE 25 KGS. ASSESSING OFFICER PUT T HE ASSESSEE TO NOTICE AS TO WHY THE EARNINGS FROM SALE OF POULTRY DROPPINGS FOR THE IMPUGNED ASSESSMENT YEARS SHOULD NOT BE ESTIMATED A S UNDER AFTER REDUCING POULTRY DROPPINGS OF BIRDS REARED BY CONTR ACT FARMERS: F.Y. AVG. POULTRY DROPPING IN TONNES (TOTAL DROPPING LESS CONTRACT FARMERS DROPPING) ESTIMATED SALES ( ` `` ` ) 2005 - 06 4399.85 26,39,910 2006 - 07 5032.90 32,21,056 2007 - 08 5395.025 36,68,617 2008 - 09 7474.725 53,07,055 2009 - 10 8868.175 65,62,449 2010 - 11 9858.125 74,92,175 2011 - 12 10320.05 78,43,238 TOTAL 51348.85 3,67,34,500 4 I.T.A. NOS.307 TO 313/MDS/16 5. EXPLANATION OF THE ASSESSEE WAS THAT AGAINST AVE RAGE ANNUAL FEED OF 36.5 KGS PER BIRD, THE AVERAGE POULTRY DROP PING PER BIRD WAS ONLY BY 14 KGS AND NOT 25 KGS AS ESTIMATED BY THE A SSESSING OFFICER. ASSESSEE REWORKED THE POSSIBLE EARNINGS FROM SALE O F POULTRY DROPPINGS AS UNDER:- F.Y. 2005-06 2006-07 2007-08 2008-09 2009-10 2010-1 1 2011-12 NO. OF PARENT BIRDS AT THE CLOSE OF THE YEAR IN NOS. 209594 238276 257801 351069 418567 466585 437482 AVERAGE ANNUAL FEED CONSUMPTION PER BIRD IN KGS 36.5 36.5 36.5 36.5 36.5 36.5 12.2 AVERAGE POULTRY DROPPINGS PER BIRD IN KGS. 14 14 14 14 14 14 4.67 AVERAGE POULTRY DROPPINGS PER ANNUM IN TONNES 2800 3080 3500 4340 5320 6020 2055 AVERAGE POULTRY DROPPINGS USED FOR OWN CONSUMPTION PER ANNUM IN TONNS 1680 1848 2100 2604 3192 3612 1233 AVERAGE POULTRY DROPPINGS AT CONTRACT FARMS IN TONNS 840 924 1050 1302 1596 1806 617 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 5 I.T.A. NOS.307 TO 313/MDS/16 FROM THE ABOVE DATA, THE ASSESSEE WORKED OUT THE AD DITIONAL INCOME FROM SALE OF POULTRY DROPPINGS AS UNDER:- F.Y. 2005-06 2006-07 2007-08 2008-09 2009-10 2010-1 1 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 MANURE SALES (A) + (B) 1176000 1379840 1666000 2156980 2755760 3202640 1092880 IN SUPPORT OF THE ABOVE, ASSESSEE PRODUCED A LETTER FROM ONE PROF. D. NARAHARI, SENIOR VICE PRESIDENT OF INDIAN POULTRY S CIENCE ASSOCIATION. THE LD. A.O. 6. AFTER CONSIDERING THE EVIDENCE AND DETAILS FILED BY THE ASSESSEE, LD. A.O. CONCLUDED THAT THE EXPERT OPINIO N PROVIDED BY THE ASSESSEE HAD FIXED AVERAGE FEED CONSUMPTION OF A BI RD AT 55 TO 60 KGS FOR A 60-WEEK PERIOD. ON AN ANNUAL BASIS, AS P ER THE A.O., SUCH 6 I.T.A. NOS.307 TO 313/MDS/16 FEED CONSUMPTION CAME TO 49.8 KGS PER ANNUM PER BIR D. SINCE ASSESSEE HAD ITSELF ESTIMATED POULTRY DROPPING OF 1 4 KGS ON A FEED OF 36.5 KGS, AS PER THE A.O., ON FEED OF 49.8 KGS, THE POULTRY DROPPING PER BIRD WOULD WORK OUT TO 19.10 KGS. AS PER THE A .O., ASSESSEE ITSELF HAD ESTIMATED THE PRICE OF THIS MANURE BETWEEN ` 500 TO ` 1000 AND THEREFORE, AND THE AVERAGE PRICE CAME TO ` 750 PER TON FOR ASSESSMENT YEAR 2006-07. ACCORDING TO HIM, THERE COULD HAVE B EEN AN INCREASE OF ` 25/- PER ANNUM ON SUCH SALE PRICE. AVERAGE PRICE O F THE POULTRY FEED WAS FIXED BY HIM IN ACCORDANCE WITH FOLLOWING TABLE :- ASSESSMENT YEAR AVERAGE PRICE PER TON 2006 - 07 ` 750 2007 - 08 ` 775 2008 - 09 ` 800 2009 - 10 ` 825 2010-11 ` 850 2011 - 12 ` 875 2012 - 13 ` 900 THEREAFTER TAKING 19.1 KGS AS THE POULTRY DROPPING PER BIRD AND THE RATE AS MENTIONED IN THE TABLE ABOVE, HE RE-WORKED THE INCOME OF THE ASSESSEE FROM SALE OF POULTRY DROPPINGS FOR EACH OF THE YEAR. ADDITIONS WERE ACCORDINGLY MADE FOR EACH YEAR. 7 I.T.A. NOS.307 TO 313/MDS/16 5. AGGRIEVED, THE ASSESSEE MOVED IN APPEAL BEFORE T HE CIT(APPEALS) FOR ALL THE YEARS. THE CIT(APPEALS), AFTER GOING THROUGH THE EXPERT OPINION FURNISHED BY THE ASSESSEE, FOUND THAT THE EXPERT HAD ESTIMATED BIRD DROPPING PER YEAR AT 10 KGS. AS PER THE CIT(APPEALS), THE ASSESSING OFFICER HAS ADOPTED 19. 10 KGS WITHOUT BRINGING ANY MATERIAL EVIDENCE IN SUPPORT THEREOF. THE CIT(APPEALS) NOTED THAT IN THE POULTRY BUSINESS, POULTRY DROPPIN GS WOULD BE COLLECTED PERIODICALLY, STORED IN AN OPEN PLACE AND EXPOSED TO SUN AND RAIN. THUS, ACCORDING TO HIM, ASCERTAINING SUCH DR OPPINGS PER BIRD SCIENTIFICALLY WAS POSSIBLE. LD. CIT(APPEALS) HELD THAT IN THE CIRCUMSTANCES OF THE CASE, ASSESSEES ESTIMATE OF 1 4 KGS PER BIRD WAS FAIR. 6. COMING TO THE QUESTION OF RATE ADOPTED PER TON, AS PER THE LD. CIT(APPEALS), THE MARKET RATE OF POULTRY MANURE WAS ONLY ` 1200 PER TIPPER, VIZ. FOR A QUANTITY OF TWO TONNES. THUS, A CCORDING TO HIM, AVERAGE PRICE FOR MANURE WAS ONLY ` 600/-. HE HELD THAT THE RATE OF ` 750 PER TON FIXED BY THE ASSESSING OFFICER FOR 2006 -07 WAS INCORRECT. HE DIRECTED THE A.O. TO ADOPT ` 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 8 I.T.A. NOS.307 TO 313/MDS/16 BIRDS GROWN UNDER CONTRACT FARMING FROM THE STOCK O F BIRDS WHILE WORKING OUT THE BIRD DROPPINGS. 7. NOW BEFORE US, THE LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THE AVERAGE RATE OF POULTRY DROPPING AT 19.10 KGS PER BIRD WAS CORRECTLY WORKED OUT BY THE ASSESSING OFFICER CONSI DERING THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDING TO HIM, A SSESSING OFFICER WAS HAVING AN EXPERT OPINION OBTAINED BY THE DEPART MENT 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 POULT RY DROPPINGS AVAILABLE FOR SALE. AS PER LD. D.R., SUCH EXCLUSIO N WOULD RESULT IN A LOWER NUMBER OF BIRDS THAN THE AVERAGE STOCK ADMITT ED BY THE ASSESSEE. 8. PER CONTRA, THE LD. A.R. SUPPORTED THE ORDER OF THE CIT(APPEALS). 9. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. WHILE ESTIMATING THE YIELD OF POULTRY DROPPING, THE ASSESSING OFFICER ADMITTEDLY HAD RELIED ON AN EXPERT OPINION GIVEN BY PROF. D. NARAHARI, 9 I.T.A. NOS.307 TO 313/MDS/16 SENIOR VICE PRESIDENT OF INDIAN POULTRY SCIENCE ASS OCIATION. THE EXTRACT OF SUCH OPINION AS IT APPEARS IN ASSESSMENT ORDER IS REPRODUCED AS UNDER:- 1. WHAT COULD BE THE AVERAGE LIFE TIME OF A PARENT BIR D? THE COMMERCIAL LIFE (NOT ITS FULL BIOLOGICAL LIFE) OF A BROILER PARENT BIRD IS ABOUT 60 WEEKS . 2. WHAT COULD BE THE AVERAGE CONSUMPTION OF FEED (IN K GS) DURING THE LIFE TIME OF A PARENT BIRD? DURING THE ABOVE COMMERCIAL LIFE, A PARENT BIRD WIL L CONSUME AROUND 55-60 KGS OF FEED. 3. WHAT COULD BE THE AVERAGE POULTRY DROPPINGS OF A PA RENT BIRD DURING ITS LIFE TIME? WHAT COULD BE THE AVERA GE POULTRY DROPPINGS OF A PARENT BIRD WITH REFERENCE T O ITS CONSUMPTION (% OF AVERAGE CONSUMPTION)? (I.E. POUL TRY DROPPINGS (IN KGS) OF A PARENT BIRD IN ITS LIFE TIM E / AVERAGE CONSUMPTION OF PARENT BIRD IN ITS LIFE TIME ) THE AVERAGE POULTRY DROPPINGS PER PARENT BIRD WILL BE ABOUT 15 KGS WHICH ACCOUNTS TO ABOUT 25% OF THE FEE D CONSUMED. HOWEVER, AS IT UNDERGOES COMPOSTING AT T HE BOTTOM OF THE CAGE, SOME OF IT GEST DECOMPOSED, EAT EN BY MAGGOTS, FLIES, INSECTS ETC., AND SOME WASHED AWAY BY RAIN WATER. THEREFORE, THE PRACTICAL RECOVERABILITY OF MANURE MAY NOT EXCEED 10 KGS PER PARENT BIRD. 4. WHAT COULD BE THE MOISTURE CONTENT (IN %) PER KG OF POULTRY DROPPINGS? THE MOISTURE CONTENT VARIES BETWEEN 80-85% FOR FRES H DROPPINGS. HOWEVER, AS THE DROPPINGS FALLS UNDER T HE GROUND IT WILL GRADUALLY LOOSE THE MOISTURE LEVEL. ASSESSING OFFICER HAD ACCEPTED THE EXPERT OPINION I NSOFAR AS IT RELATED TO FEED CONSUMPTION OF BIRD AT 55-60 KGS FOR 60-WEE KS. HOWEVER, 10 I.T.A. NOS.307 TO 313/MDS/16 WHEN IT CAME TO POULTRY DROPPING, HE REFUSED TO CON SIDER THE OPINION OF THE SAID EXPERT. THE SAID EXPERT HAD CLEARLY MENTI ONED THAT RECOVERABLE MANURE WOULD NOT EXCEED 10 KGS PER BIRD . IN OUR OPINION, WHEN RELIANCE IS PLACED ON THE OPINION OF AN EXPERT, IT CANNOT BE CONSIDERED IN PART AND REJECTED IN PART. IT SHO ULD HAVE BEEN CONSIDERED IN WHOLE. SINCE THE ADDITION MADE BY TH E A.O. IS BASED ON THE EXPERT OPINION OF PROF. D. NARAHARI, SENIOR VIC E 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 ESTIM ATION 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 REDUCTI ON OF BIRD DROPPING, FOR BIRDS GROWN BY CONTRACTING FARMS, THE RELEVANT OBSERVATION OF THE CIT(APPEALS) IS REPRODUCED HEREU NDER:- 7.4 IT IS SUBMITTED BEFORE ME THAT THE APPELLANT GR OWS PARENT BIRDS IN HIS OWN FARM AND ALSO WITH CONTRACT ING FARMS. AS PER THE EXISTING PRACTICE IN THE TRADE, POULTRY CONTRACTING FARMERS GETS THE GROWING CHARGES PER BIRD PERIODICA LLY IN ADDITION TO THAT POULTRY MANURE. ALL BIRD DROPPING S BELONG TO THE CONTRACTING POULTRY FARMERS. ON PERUSAL OF THE 11 I.T.A. NOS.307 TO 313/MDS/16 ASSESSMENT ORDER I FIND THAT A.O. HAS CALCULATED BI RD DROPPINGS BASED ON THE CLOSING STOCK OF BIRDS. IT IS APPARENTLY SEEN THAT ASSESSING OFFICER HAS NOT CALC ULATED THE NUMBER OF BIRDS GROWN AT CONTRACTING FARMS. IT HAS TO BE EXCLUDED FOR THE PURPOSE OF ARRIVING AT BIRD DROPPI NGS INCOME. THE ASSESSING OFFICER IS DIRECTED TO WORK OUT THE BIRD DROPPINGS (MANURE) AFTER EXCLUDING BIRDS GROWN AT CONTRACTING FARMS. ACCORDINGLY, THE GROUNDS RAISED IN THIS REGARD ARE ALLOWED FOR ALL THE ASST. YEARS I.E. 200 6-07 TO 2012-13. INSOFAR AS BIRD DROPPINGS WERE CONCERNED, ASSESSING OFFICER HIMSELF HAD EXCLUDED BIRD DROPPINGS OF POULTRY RAISED BY CO NTRACTING FARMS. SUCH REDUCTION IN BIRD DROPPINGS, AS NOTED BY THE L D. CIT(APPEALS), WAS TO BE BASED ON THE NUMBER OF BIRDS GROWN AT CON TRACTING FARMS AND NOT BASED ON THE NUMBER OF BIRDS HELD IN CLOSIN G STOCK AS DONE BY THE ASSESSING OFFICER. JUST BECAUSE ASSESSEE HAD V ALUED STOCK OF BIRDS CONSIDERING A PARTICULAR STRENGTH, WE CANNOT SAY THAT POULTRY DROPPINGS OF BIRDS UNDER CONTACT FARMING WERE NOT T O BE EXCLUDED. WE ARE OF THE OPINION THAT THE CIT(APPEALS) WAS FAIR I N GIVING SUCH DIRECTIONS. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS) IN THIS REGARD ALSO. 11. THIS LEAVES US TO ONE MORE GROUND RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2010-11 WHICH ASSAILS DELETION OF A DDITION OF 12 I.T.A. NOS.307 TO 313/MDS/16 ` 2,37,99,820/- MADE BY THE A.O. FOR UNEXPLAINED INVE STMENT, UNDER SECTION 69B OF THE ACT. 12. DURING THE COURSE OF SEARCH, IT WAS FOUND THAT THE ASSESSEE HAD ACQUIRED 63.18 ACRES OF LAND FROM ONE M/S VALARMATH I FARMS PVT. LTD. THE VALUATION SHOWN IN THE REGISTERED DEED WAS ` 5,30,40,000/-. A STATEMENT WAS RECORDED FROM SHRI S.K. SHANMUGAM, DI RECTOR OF M/S VALARMATHI FARMS PVT. LTD. SHRI S.K. SHANMUGAM STA TED IN REPLY TO A QUESTION THAT HE HAD RECEIVED CONSIDERATION OF ` 8,67,00,000/- FOR SALE OF LAND TO THE ASSESSEE. HE ALSO STATED THAT THE D IFFERENCE BETWEEN REGISTERED VALUE OF ` 5,30,40,000/- AND ACTUAL CONSIDERATION OF ` 8,67,00,000/- WAS RECEIVED BY HIM AS ON-MONEY IN CA SH FROM SHRI R. LAKSHMANAN, MANAGING DIRECTOR OF THE ASSESSEE. DUR ING THE COURSE OF SEARCH, THERE WAS A NOTEBOOK SEIZED FROM OFFICE PREMISES OF THE ASSESSEE. IN PAGE 46 OF THE SAID NOTEBOOK, THE FOL LOWING INFORMATION WAS RECORDED:- ROAD: 2.55 KUMAR: 1.00 2.00 3.00 DOCUMENT 8.55 3 BROKER 8.58 20 13 I.T.A. NOS.307 TO 313/MDS/16 8.78 3.00 5.78 IT SEEMS MANAGING DIRECTOR OF THE ASSESSEE SHRI LAK SHMANAN HAD ACCEPTED PAYMENT OF SUCH ON-MONEY. ASSESSING OFFIC ER REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF ON-MONEY PAYMENT OF ` 3.366 CRORES. IN REPLY, IT WAS STATED BY THE ASSESSEE TH AT A SUM OF ` 1,71,30,000/- WERE UNEXPLAINED CASH CREDITS, ` 30,00,000/- WAS FROM UNACCOUNTED SALE OF MANURE AND BROKEN EGGS AND THE BALANCE WAS WITHDRAWN FROM ACCUMULATED DRAWINGS OF HIS FAMILY M EMBERS. IN THE RETURN FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 20 10-11, ASSESSEE HAD ADMITTED ONLY ` 98,60,180/- AS ON-MONEY PAYMENT FOR PURCHASE OF ABOVE PROPERTY. THE BALANCE WAS CLAIMED TO HAVE BE EN 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 ` 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 DRO PPINGS, WHICH WAS NOT ACCOUNTED, SHOULD BE CONSIDERED FOR TELESCOPING WITH THE ON- 14 I.T.A. NOS.307 TO 313/MDS/16 MONEY PAYMENT OF ` 2,37,99,820/-. THE CIT(APPEALS) ACCEPTED THIS CONTENTION AND DELETED THE ADDITION. 14. NOW BEFORE US, THE LD. DEPARTMENTAL REPRESENTAT IVE SUBMITTED THAT IT WAS ESSENTIAL TO CORRECTLY WORK OUT THE UNA CCOUNTED INCOME FROM SALE OF BIRD DROPPINGS FOR ASSESSMENT YEARS 20 06-07 TO 2010-11. AS PER THE LD. D.R., THE LD. CIT(APPEALS) HAD NOT M ADE VERIFICATION OF SUCH AMOUNT WITH THE INVESTMENT MADE BY THE ASSESSE E BEFORE ALLOWING TELESCOPING. 15. PER CONTRA, LD. A.R. SUPPORTED THE ORDER OF THE CIT(APPEALS). 16. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. ASSESSEE HAD ESTIMATED AND ADMITTED UNACCOUNTED INC OME FROM SALE OF BIRD DROPPINGS AND BROKEN EGGS DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. WE HAVE ALREADY UPHELD THE ORDER OF THE CIT(APPEALS) WITH REGARD TO DELETI ON OF ADDITIONS MADE BY THE LD. A.O. ON ADDITIONAL INCOME ESTIMATED FROM SALE OF BIRD DROPPINGS. IN OUR OPINION, THE FINDING OF THE LD. CIT(APPEALS) THAT ADDITIONAL INCOME FROM BIRD DROPPINGS FOR VARIOUS A SSESSMENT YEARS COVERED BY THE SEARCH ASSESSMENT WAS ADEQUATE TO ME ET THE ON- MONEY PAYMENT OF ` 2,37,99,820/- WAS JUSTIFIED. TELESCOPING WAS 15 I.T.A. NOS.307 TO 313/MDS/16 RIGHTLY ALLOWED BY THE LD. CIT(APPEALS). WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS) ON THI S ASPECT ALSO. 17. IN THE RESULT, APPEALS OF THE REVENUE FOR ALL T HE ASSESSMENT YEARS 2006-07 TO 2012-13 ARE DISMISSED. ORDER PRONOUNCED ON 13 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( . . . ) ( ! .#$#% ) (N.R.S. GANESAN) (ABRAHAM P. GEORGE) /JUDICIAL MEMBER ' / ACCOUNTANT MEMBER /CHENNAI, 7 /DATED, THE 13 TH FEBRUARY, 2017. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-18, CHENNAI 4. PRINCIPAL CIT-2, CHENNAI 5. 9< .3 /DR 6. =% > /GF.