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2018 (5) TMI 585 - ITAT CHENNAIRevision u/s 263 - no proper enquiry to find out the income generated by the assessee from the business carried on as per the books of account - difference between the cash found during the course of search operation and the income returned by the assessee in the return of income - Held that:- Principal Commissioner found that the Assessing Officer has not made any proper enquiry to find out the income generated by the assessee from the business carried on as per the books of account. Principal Commissioner also found that the unaccounted income admitted by the assessee during the course of search operation cannot be considered to be part of book profit for the purpose of computing partners’ remuneration under Section 40(b)(v) of the Act. Therefore, the Principal Commissioner has rightly exercised his jurisdiction under Section 263 of the Act. As rightly submitted by DR, AO assessed the difference of ₹ 11,39,930/- from the cash found during the course of search operation and the income disclosed by the assessee. The Assessing Officer has not made any enquiry to find out the profit or income generated in the course of business as per the books of account. Therefore, this Tribunal is of the considered opinion that there is an error in the order of the Assessing Officer which is prejudicial to the interests of Revenue. Apart from the undisclosed income found during the course of search operation in the form of cash, the assessee carried on the business as per the books. Therefore, the income / profit generated from the business carried on by the assessee as per books also needs to be disclosed apart from the unaccounted income found and admitted during the course of search operation - Decided against assessee. G.P. estimation - Held that:- When the books of account were not rejected by the Assessing Officer, which were maintained by the assessee in the regular course of its business, there may not be any necessity for the Assessing Officer to estimate the profit. The estimation of profit would arise for consideration only when the books of account were not maintained properly and the same were rejected by the Assessing Officer in the course of assessment proceeding. Since the books of account were not rejected, this Tribunal is of the considered opinion that the estimation of profit may not be justified. Accordingly, orders of both the authorities below are set aside and the addition made by the Assessing Officer is deleted. - Decided in favour of assessee.
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