Udaya Sridhar Reddy Siddareddy, Visakhapatnam V. DCIT Central Circle 2(4), Hyderabad

ITA 526/Hyd/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7152 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB-B
• Next Hearing Date: 15-05-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 27-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GIVING AN OPPORTUNITY
• Keywords: Business income; CHAPTER IV
• Section: 153A; 13

Judgement Text

ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 1 of 14 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B‘ Bench, Hyderabad Before Shri Laliet Kumar, Judicial Member And Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA Nos.523 to 526/Hyd/2023 (िनधाŊरण वषŊ/Assessment Years: 2014-15 to 2017-18) Shri Udaya Sridhar Reddy Siddareddy Visakhapatnam PAN:AIYPS1063R Vs. Dy. C. I. T. Central Circle 2(4) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: N O N E राज̾ व Ȫारा/Revenue by: : Shri Rahul Singhani, DR सुनवाई की तारीख/Date of hearing: 16/05/2024 घोषणा की तारीख/Pronouncement: 17/05/2024 आदेश/ORDER Per Laliet Kumar, J.M These 4 appeals filed by the assessee are directed against the separate order dated 30.08.2023 of the learned CIT (A)-12, Hyderabad, relating to A.Ys.2014-15 to 2017-18. 2. At the time of hearing, none appeared on behalf of the assessee on 15.5.2024 as well as on 16.05.2024. Hence, we are ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 2 of 14 left with no option but to take these matters as heard after hearing the learned DR. 3. First, we take appeal in ITA No.523/Hyd/2023 for the A.Y 2014-15. The grounds raised by the assessee read as under: ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 3 of 14 ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 4 of 14 4. Facts of the case, in brief, are that the assessee has filed his return of income on 23.12.2O14 for the AY 2014-15 by admitting a total income of Rs.8,65,410/-. During the course of survey operations in the case of M/s Venkata Srinivas Infracon Pvt. Ltd on 26.10.2018, certain incriminating material was impounded vide order u/s 133A(3)(ia) dated 26,10.2018. As per impounding material in Annexure A/VSPL/2, several fish farm lease agreements have been found in the name of assessee. However, the assessee has not shown any income from fish farming during the year. A show-cause notice dated 15.04.2021 was issued to the assessee regarding the same. During the relevant financial year, the assessee has shown agricultural income as Rs. 2,00,O0O/-. As the assessee has not provided any details of land holdings, or agricultural activity performed by him, another show-cause notice was issued to the assessee asking him to show cause as to why the said amount should not be treated as unexplained income. ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 5 of 14 4. The assessee submitted his reply on 19.O4.2021 stating that he was into the business of fish farming during the year and that he had taken 348.25 Ac of land for lease for fish farming during the year. A search and seizure operation was conducted in the case of M/s. RVR Projects Private Limited & others Group in which the assessee was also covered. Subsequently, the case of the assessee was selected for scrutiny and the Assessing Officer has issued notice u/s 153A of the Act to furnish true and correct return of the total income of the assessee for the AY 2014-15. In response to the same, the assessee has filed his return of income on 16.02.2021 by admitting a total income of Rs.8,65,410/-. After verification of the information available on record, the Assessing Officer rejected the submission of the assessee and completed the assessment by making an addition of Rs.41,05,987/- as income from business of the assessee in the current A.Y under consideration. 5. Aggrieved by the order of the learned CIT (A) the assessee is in appeal before the Tribunal who dismissed the appeal filed by the assessee. 6. Ground No.2 of the assessee’s appeal deals with the issue whether the income arrived from the fishing activity is an agricultural income or not from the commercial activities. ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 6 of 14 7. The learned DR drew our attention to the finding of the learned CIT (A) which is to the following effect: ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 7 of 14 ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 8 of 14 ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 9 of 14 ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 10 of 14 ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 11 of 14 8. We have perused the material available on record. A perusal of the order of the learned CIT (A), it is abundantly clear that the learned CIT (A) while adjudicating the issue whether the income from fishery is an agricultural income or not as he relied on the definition of agriculture given in section 2(1A) and also to the judgment of the Hon'ble Supreme Court in the case of Maheshwary Fish Seed Farm vs. Tamil Nadu Electricity Board ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 12 of 14 and Anr dated 16.04.2004 and decision of the Tribunal in the case of Krishna Fisheries (Supra). We do not find any reason to deviate from the findings given by the learned CIT (A). Accordingly, we decide against the assessee on the ground No.2 raised by the assessee and we hold that carrying out of the fishing activity is a commercial activity and the profit & loss arising from the fish farming activity is required to be computed as per the stipulations given in Chapter IV of the I.T. Act. 9. The other grounds relating to the computation of income by the Revenue authorities are concerned, we have noted down that the Revenue while computing the income of the assessee has made addition on the basis of lumpsum coverage of the land with water. 10. We have perused the material available on record. Undoubtedly while computing the business income arising out of carrying out of the fishing activity, the authorities below have applied thumb rule as mentioned in the CBDT Circular No.08/2014 dated 27.10.2014. However, the assessee throughout the appellate/assessement proceedings were only making a submission that the fishing activity is an agricultural activity and therefore, the income arising from the fishing activity is a commercial income. ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 13 of 14 11. As we have decided the first issue against the assessee whereby, we have already held that the income arising from a fishing farming activity is a business income, therefore, the provisions as applicable to the business income as mentioned in Chapter IV of the Income Tax Act are required to be applied for computing the correct income of the assessee. In the light of the above, we deem it proper to remand the matter to the file of the learned Assessing Officer with a direction to treat the income of the assessee as business income and thereafter compute the correct business income of the assessee by giving an opportunity of being heard to the ass. The assessee shall file all the necessary documents/ evidences for claiming deduction etc., for correct assessment of the business income. 12. In the light of the above, the appeal filed by the assessee for the A.Y 2014-15 is partly allowed. ITA Nos. 524 to 526/Hyd/2023 13. We find that the assessee has raised identical grounds to the appeal in ITA No.523/Hyd/2023 for the A.Y 2014-15. We have already decided the issues and partly allowed the appeal of the assessee. Following similar reasonings in the above appeals filed by the assessee for the A.Ys 2015-16 to 2017-18 are also partly allowed with similar instructions. ITA 523 to 526 Udaya Sridhar Reddy Siddareddy Page 14 of 14 14. In the result, appeals filed by the assessee are partly allowed. Order pronounced in the Open Court on 17 th May, 2024. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 17 th May, 2024 Vinodan/sps Copy to: S.No Addresses 1 Shri Udaya Sridhar Reddy Siddareeddy, F.No.29, 45-53-8/29, Abid Nagar, Visakhapatnam (Urban) Akkayayapalem, SO Visakhapatnam A.P 2 Dy.CIT Central Circle 2(4) 6 th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad 500004 3 Pr. CIT – Central, Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order