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2017 (7) TMI 71 - AT - Income TaxJurisdiction assumed by the ITO, Solan - appellant firm was regularly being assessed at New Delhi till last year - Held that:- The letters do not mention as to how the ITO, Delhi has jurisdiction over the assessee and not the ITO, Solan. The letters are, therefore, mere information being imparted to the AO and cannot be termed as objection. The Assessing Officer, we find had also clarified to the assessee as to how the jurisdiction lies with him which argument was not countered or controverted by the assessee before the Assessing Officer. There was no valid objection filed by the assessee before the Assessing Officer and in the absence of the same, the assessee cannot now challenge the jurisdiction in appellate proceedings,in view of the clear provisions of section 124 (3)which prescribed objection to be filed within the stipulated time of 30 days of receipt of notice. Territorial jurisdiction lies with the ITO, Solan only and no question, therefore, arises whether he had jurisdiction to assess the assessee and, therefore, also the provisions of section 124(2) and (3) or sub-section (4),which prescribe the procedure for dealing with “question” relating to jurisdiction of AO’s, do not become applicable at all since they are applicable only when a “question” relating to jurisdiction arises. No merit in the argument of the assessee that the issue related to transfer of jurisdiction and hence required order to be passed by the requisite authority as per the provisions of section 127 of the Act. As stated above, in the present case the jurisdiction has been established categorically as lying with the ITO,Solan and the issue is definitely not of transfer of case from Delhi to Solan,since that could be the case only if the ITO at Delhi had valid jurisdiction which for some reason was being transferred to ITO,Solan. That being not the case, the provisions of section 127 we find do not apply in the present case - Decided against assessee. Addition on account of estimation of net profit - Held that:- If the assessee had some material or some basis to dislodge this belief or this rate adopted by the Assessing Officer, it could have produced the same atleast before us, which has not been done. The assessee cannot adopt the attitude of non-cooperation all along when the onus lies on the assessee to prove that the profit returned by it is correct. The assessee cannot shift the onus on the Revenue after not cooperating throughout the proceedings and then stating that there has to be some basis with the Assessing Officer to adopt a net profit rate. It is a highly unreasonable and illogical argument given by the assessee which cannot be accepted and the addition made on account of net profit rate amounting to ₹ 44,97,725/- is, therefore, upheld.- Decided against assessee. Addition made on account of introduction of capital of the partners - AO treated the difference between the opening and closing balance of capital account as unexplained and made addition of the same to the income of the assessee firm - Held that:- During appellate proceedings the assessee furnished copy of Income Tax return of one of the partners,Sh, Vikas Bhalla and a copy of his Bank account showing two entries transferring ₹ 68 lacs and ₹ 1,90,000/- to the assessee firm.Since the capital introduced is adequately explained by the aforestated documents as having been introduced by one of the partners himself from his bank account, we see no reason for making any addition on account of unexplained credit in the hands of the assessee. Therefore we delete the addition made - Decided against revenue.
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