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2013 (6) TMI 13 - AT - Income TaxValidity of search - addition of income - as per assessee assessment order is barred by limitation - Held that:- As the assessee has urged this issue for the first time before the CIT(A) after a gap of almost three years from the date of search it is well settled proposition that the retraction should be made at the earliest possible opportunity. On perusal of the case of Cochin Plantations Ltd Vs. State of Kerala [1997 (2) TMI 76 - KERALA High Court] would show that the assessment order would become complete and effective, if it is issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein, meaning thereby, the assessment order should leave the hands of the AO. The date of service of the same is the date on which it becomes operational or takes effect for the consequences arising there from. In the instant case, the impugned assessment orders were passed on 31.12.2010. It is not shown that the said orders remained in the hands of the assessing officere even after 31.12.2010. On the contrary, the D.R has submitted that they have been dispatched on that date itself leaving them beyond the control of the assessing officer to make any change or modification. Under these set of facts, the impugned assessment orders have become complete and effective on 31.12.2010 itself, in which case, they cannot be considered as barred by limitation. Accordingly, reject the grounds raised by the assessee on this issue. Rejection of book results - Held that:- The gold and silver ornaments are high valued items and hence all traders are vigilant over the stock kept by them. Hence, at any point of time, a gold merchant would be in a position to tell the aggregate quantity of stock held by him. If a prudent business man follows a systematic method of accounting only a portion of purchase and sales, then it would be difficult for anybody to find any defect in the books of accounts. In the instant case also, even if the AO did not point out any defect in the books of accounts, other factors as the assessee claims that the excess stock actually belong to the partner of the assessee firm, veracity of which requires examination, yet the fact remains that the assessee did not account for the same in its books of account, even as per its claim thus the books of accounts maintained by the assessee are not reliable. Hence, CIT(A) was justified in confirming the action of the AO in rejecting the books of accounts of the assessee for all the years. Estimation of income of the assessee - Held that:- It is a fact that the AO did not bring on record any other material was brought on record except the estimation slips yet there is some basis in the estimate made by the AO, though they cannot be considered as conclusive proof. The CIT(A), however, has not brought on record any material to support his view to reduce the estimated turnover to five times of the declared turnover. Under these circumstances, it is forced to estimate the total turnover on a via media manner. Accordingly, on a conspectus of the matter the total turnover may be estimated at six times of the declared turnover and it would meet the ends of justice. Since the AO has himself has determined the rate of Gross profit @ 20% as against the G.P. declared by the assessee at higher rates on the reasoning that a normal business man could realize Gross Profit to that extent only, no interfere with the decision of CIT(A) in upholding the rate of gross profit @ 20%.
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