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2017 (6) TMI 1167 - AT - Income TaxAssessment u/s 153A - claim of assessee was depreciation on the right to collect toll being infrastructure and not on the toll road - Estimation of toll receipts in the hands of assessee - Held that:- We hold that the evidence found during the course of search toll receipts which were not recorded in the books of account for certain period could be utilized for extrapolation of income for the relevant financial year/s. However, the said material cannot be made the basis for working out the income in the hands of assessee for other years for which, no incriminating documents or entries in any cash book or note books were found during the course of search. We hold so. We find merit in the plea of assessee in this regard, where the assessments have already been completed for a particular year, then the same could not be disturbed in the absence of any incriminating material found during the course of search. Accordingly, the orders passed under section 143(3) r.w.s. 153A of the Act relating to assessment years 2006-07 and 2007-08 are annulled and the same are set aside. In respect of other years i.e. assessment years 2008-09 to 2010-11, we have already decided the issue in the paras hereinabove. For the sake of clarification, we point out that as regards the claim of depreciation on the right to collect toll being intangible asset, we have decided the issue in favour of the assessee and the same is to be allowed in the hands of assessee as deduction under section 32(1)(ii) of the Act in all the years for which, the assessee is in appeal before us. In respect of second addition made on account of estimation of toll receipts, where no evidence was found for particular year/s, we hold that no addition on this account is to be made in the hands of assessee in assessment years 2008-09 and 2009-10. However, in assessment year 2010-11, evidence was found and the said receipts were to be extrapolated for determining the toll receipts in the hands of assessee and in this regard, we uphold the order of Assessing Officer in estimating the same @ 5% of accounted toll receipts. Similarly, in the year of search i.e. assessment year 2010-11, evidence has been found for part of the month and the addition is to be restricted to the said evidence found. The evidence cannot be used for extrapolating the receipts for balance period, which is after the date of search; since, no evidence has been brought on record to establish that the same practice has been followed by the assessee in the period pursuant to the date of search. Accordingly, the Assessing Officer is directed to compute the income in the respective years in the hands of assessee.
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