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2018 (10) TMI 1436 - AT - Income TaxEstimation of income - Rejection of books of accounts - assessee failed to produce the stock register, sale bills with the quantity of sales item wise and the quantitative details of valuation of closing stock etc. - AO estimated the net profit at 20% of the purchases put to sale - Held that:- Neither the AO, nor the CIT(A) has analyzed the books of accounts and brought on record the specific defects found during the course of assessment proceedings to resort for higher estimation. The AO rejected the books of accounts because of non production of stock register, sale bills, quantitative details of stocks sold and the valuation of closing stock with the details. AR submitted that the defects pointed out by the AO are common in all the IMFL cases and argued that the assessee’s case cannot be given a separate treatment for resorting to higher estimation of income as held by the CIT(A). The above submission was not controverted by the Revenue, hence we do not find any reason to resort for higher rate of profit. We are of the view that the assessee’s case is squarely covered by the decision of this Tribunal in Tangudu Jogisetty cited [2016 (7) TMI 379 - ITAT VISAKHAPATNAM] hence, we set aside the order of the Ld.CIT(A) and direct the AO to estimate the income @5% of the goods sold. Addition u/s 68 - revision u/s 263 - reopening of assessment - Held that:- In the instant case, the AO has examined the issue, satisfied with the correctness with regard to the identity, genuineness and credit worthiness of the capital introduction, unsecured loans and the sources of investments and accepted the same as genuine. By enhancement notice, the CIT(A) intended to redo the assessment and reexamine the issue which was already examined by the AO. It is not the case of non causing enquiries by the AO as evident from assessment order in para No.2.1. AO has called for the details and examined the issue in detail. CIT(A) is not empowered to enhance the assessment by discovering the new source of income. For escapement of income, there are remedial measures provided u/s 147 and 148 of the Act. If the order passed by the AO is erroneous and prejudicial to the interest of the revenue, the alternative remedy is provided u/s 263 of the Act. Similarly, if a mistake is committed by the AO, which is apparent form the record, remedial measures are provided u/s 154 of the Act. If the Ld.CIT(A) is allowed to make the enhancement on a new source of income which was not considered by the AO, the provisions of section 147, 148 and 263 would become redundant. Therefore, we are of the considered opinion that the Ld.CIT(A) is not permitted to make the enhancement on completely new source of income, which was not considered by the AO.
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