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2015 (11) TMI 1449 - AT - Income TaxRevision u/s 263 - telescoping the un-reconciled creditors into estimated income - Held that:- What amount was considered for addition is the amount as per P & L Account submitted to the ROC. Assessee has calculated the amount of loss as per P & L Account being set off by the income offered in the P & L Account and only the additional income was offered to tax. The computation of income started with that of originally assessed income, consequent to the orders of the Ld. CIT(A) and the additional income as per the P & L Account subsequently filed. Net profit or loss as per the books of accounts was offered in the revised proceedings. Consequently, the opinion of the Ld. CIT that A.O. has telescoped the incomes is not correct. What the Addl. CIT has directed is the net income as per the P & L Account to be added to the already assessed income on the same turnover. In fact, the proceedings under section 148 resulted in assessing the assessee’s profit in business on estimation basis, having rejected the books of accounts and also making additions on the basis of books of accounts. Thus the orders passed by the A.O. are in fact is not prejudicial to the interest of the Revenue. One of the item which Ld. CIT has directed in his order under section 263 is also on interest income. The computation for A.Y. 2002-2003 indicates the original income as per the consequential order dated 17.07.2007 at ₹ 29,42,079 + Additional Income offered as per the P & L Account at ₹ 24,17,340 + Interest Income that too from the same P & L Account of ₹ 22,97,203 hereby determining the total income of ₹ 76,56,622. We are unable to find any error or mistake committed by the A.O. in assessing the higher figure than what was required under the Law. Similar is the case for A.Y. 2003-04 wherein the income as determined consequent to the order dated 04.05.2007 at ₹ 29,18,047 was taken and addition as per P & L Account filed subsequently at ₹ 24,14,094 was also added along with the interest income of ₹ 16,52,200 which according to the assessee is sale of scrap already considered in the P & L Account. Thus the revised income was determined at ₹ 69,84,340. As seen from the reasons recorded for reopening the assessment for A.Y. 2002-03, A.O. reopened the assessment for bringing to tax amount of ₹ 1,93,703 not disclosed in the original income but received as interest income and for A.Y. 2003-04 the interest income was at ₹ 2,89,800. In fact, the A.O. has added many times these amounts on which the assessment was reopened. Therefore, in our opinion, the proceedings of A.O. under section 143(3) read with section 147 are not prejudicial to the interests of Revenue and there is no error as considered by the Ld. CIT. - Decided in favour of assessee.
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