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2017 (5) TMI 296 - AT - Income TaxValidity of reopening of assessment - Estimation of income - truck operators - Held that:- In the present case, there was no scrutiny assessment. The return was processed only under section 143(1) of the Act. There is nothing with the assessee to say that the AO was not possessed any fresh information. The observation of the AO in the reasons to the effect is that on verification of record he found certain discrepancies. Now this record would contain all the information possessed by him. In other words, he has not made reference to a specific source of information, but he has pointed out various defects discerned to him on verification of record, and therefore, he has issued notice. Thus in the present case, a perusal of the reason would indicate that the AO had the information and therefore he was justified in issuing notice under section 148 of the Act. - Decided against assessee. Applicability of provision of section 44AE which provides tax on presumptive basis - Addition under the head truck expenses - Held that:- The income of the assessee ought to be estimated by taking a guidance under section 44AE of the Act. The AO ought to have not enhanced the income at such a level under garb of making disallowance on estimate basis. The ld.CIT(A) has erred in rejecting ground no.2 of the assessee’s appeal, whereby it has prayed that its income ought to be computed with the help of section 44AE. We direct the AO to compute the income of the assessee by taking 11 trucks at the rate prescribed in section 44AE relevant to the assessment year. The AO, thereafter grant all consequential benefits i.e. salary and interest to the partners as per section 40b of the Income Tax Act. Since we have changed very basis for determination of income, therefore all other grounds vide which partial disallowance has been upheld by the ld.CIT(A) out of various expenditure are concerned, that would become redundant, and therefore, we are not required to record specific finding on these issues. In this way, both the appeals are disposed of.
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