UDAYA SRIDHAR REDDY SIDDAREDDY,VISAKHAPATNAM vs. DCIT CENTRAL CIRCLE - 2(4), HYDERABAD

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 left with no option but to take these matters as heard after hearing the learned DR.

First, we take appeal in for the A.Y 2014-15. The grounds raised by the assessee read as under:

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.

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.

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.

The learned DR drew our attention to the finding of the learned CIT (A) which is to the following effect:

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

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.

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.

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.

In the light of the above, the appeal filed by the assessee for the A.Y 2014-15 is partly allowed.

We find that the assessee has raised identical grounds to the appeal in 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.

In the result, appeals filed by the assessee are partly allowed.