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2010 (11) TMI 649 - AT - Income TaxSearch and seizure - Suppression of profits - Rejection of book of accounts - assessee company indulges in unaccounted production and sale, the AO went on to compute the suppressed production on the basis of electricity consumption for all the years under consideration - CBDT Circular dt. 15th Sept., 2003 explained the scope and effect of new assessment proceedings in search cases - Held that: The returns have already been accepted and no assessment as such could be said to be pending on the date of initiation of search and abated in light of the provisions of s. 153A Regarding rejection of book - It is an accepted fact that each year of the assessment is independent and evidences found relating to asst. yr. 2006-07 cannot have an adverse impact on the assessments of the assessee company from the asst. yrs. 2000-01 to 2005-06 - rejection of books for these years purely on the ground that there has been divergence in the consumption of electricity and application of s. 144 is not at all justified assessee's stand was that whatever stores and material were surrendered by the assessee on the day of search have been taken into books of accounts and they form part of the manufacturing and trading account of the assessee - In view of disclosure in the hands of the company/individual same has to be taken for telescoping with regards to other additions or surrender that are otherwise called for on the basis of seized material - Since the assessee has voluntarily surrendered these amounts and paid taxes thereon, its request for telescoping the same into the intangible addition sustained on account of suppressed production was found reasonable by the CIT(A) - Appeal is dismissed
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