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2013 (2) TMI 478 - AT - Income TaxEstimation of GP - search & seizure u/s 132 of the Act were conducted - several incriminating documents were seized - notice u/s 158BD of the Act were issued on 24.11.1999 to file return for the block period commencing from 1.4.1988 to 8.1.1999 - Assessee filed a return on 11.12.2000 declaring undisclosed income of Rs.7.50 lacs – AO found unaccounted sales of bricks – Section 145 were invoked - On examination of the seized documents in respect of financial year falling under this block period, undisclosed income of Rs.70,13,557/- was determined by the AO. - AO adopted GP rate at 23% for the purpose of computing undisclosed income – Held that:- there is a specific provision u/s 158BC , which confers jurisdiction on the AO to invoke the provisions of Section 145 as also Section 144 of the Act. Thus, AO is competent to make estimate based on the incriminating documents. AO has extensively placed reliance on the seized documents and determined the sales of bricks outside the required books of account, which were admitted by the assessee for the financial year 1993-94, 1994-95, 1995-96 and 1998-99. AO worked out sale of bricks for the financial year 1996-97 at Rs.61,68,819/- whereas the assessee worked sales of bricks at Rs.59.63 lacs. Similarly, for the financial year 1997-98, the AO worked out the sales at Rs.64,26,735/- whereas the assessee worked out the sale of bricks at Rs.61,68,819/- Therefore, in these two financial years, viz 1996-97 and 1997-98, there is insignificant difference between the estimation made by the AO and the assessee. Having regard to the fact situation of the present case and the analysis of incriminating seized documents and case laws relied upon by the assessee,it is fair and reasonable to apply net profit rate at 7.85% - The AO is directed to apply NP at 7.85% for the purpose of computation of undisclosed income of block period – Appeal of the assessee is allowed for statistical purposes only.
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