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2016 (3) TMI 1167 - AT - Income TaxRejection of the books of the assessee u/s 145(3) - GP addition - Held that:- The assessee has provided a detailed consolidated working as mentioned above based on inventory of physical stock at ₹ 13,73,232/- taken during the course of survey. Physical stock found at the time of survey as closing stock of 27.08.2008 and the consolidated GP of the assessee for the period 01.04.2003 to 27.08.2008 as mentioned above. The consolidated trading account reveals assessee’s total GP for the period from 01.04.2003 to 27.08.2008 comes to ₹ 47,78,075/- resulting in GP @ 11.67%. compared to this assessee’s GP declared in books comes to ₹ 60,69,209/- i.e. GP (@ 14.82%, this parameter indicates that at the end of the day, assessee has offered better GP. Looking from all these angles, in all the impugned years, we see no justification in rejection of the books of the assessee u/s 145(3) which are upheld. - Decided in favour of assessee Validity of assessment u/s 153C - Held that:- There being no valid execution of search authorization on assessee in terms of sec. 132 and there being only valid survey proceedings, no assessments can be framed u/s 153A by AO. The plea of the department that a harmonious construction of record and provisions shall be made which is an implied reference to sec. 292B also cannot be accepted. This is so because jurisdictional errors cannot be cured by such indirect means. A search on director cannot be deemed to be a search on distinct and separate incorporated entity i.e. company. Since assessments are bad in law any admission of undisclosed income by director cannot make any relevance. Consequently we hold that the impugned assessments framed u/s 153A are bad in law not being in consequence to provisions of sec 132. - Decided in favour of assessee
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