TMI Blog2013 (2) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 and 1998-99. AO worked out sale of bricks for the financial year 1996-97 at Rs.61,68,819/- whereas the assessee worked sales of bricks at Rs.59.63 lacs. Similarly, for the financial year 1997-98, the AO worked out the sales at Rs.64,26,735/- whereas the assessee worked out the sale of bricks at Rs.61,68,819/- Therefore, in these two financial years, viz 1996-97 and 1997-98, there is insignificant difference between the estimation made by the AO and the assessee. Having regard to the fact situation of the present case and the analysis of incriminating seized documents and case laws relied upon by the assessee,it is fair and reasonable to apply net profit rate at 7.85% - The AO is directed to apply NP at 7.85% for the purpose of computation of undisclosed income of block period – Appeal of the assessee is allowed for statistical purposes only. - ITSS No. 41/CHD/2003 - - - Dated:- 9-1-2012 - Shri H.L. KARWA AND SHRI MEHAR SINGH, JJ. Assessee by : Shri S.R. Chhabra Department by: Shri S.K. Khemwal ORDER PER MEHAR SINGH, AM The present appeal filed by the assessee is directed against the order dated 25.09.2003 passed by the ld. CIT(A)-II Ludhiana. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seized. Consequently, AO issued notice u/s 158BD of the Act on 24.11.1999 requiring the assessee to file return in Form 2B within 30 days of the receipt of the said notice for the block period commencing from 1.4.1988 to 8.1.1999. In response to the said notice, the assessee filed a return on 11.12.2000 declaring undisclosed income of Rs.7.50 lacs. The AO, on examination of the seized books of account and the documents, found unaccounted sales of bricks. Consequently, the AO held that the regular books of account of the assessee did not reflect true and correct profits in respect of bricks kiln. He further observed that the regular books of account are not reliable. Accordingly, the provisions of Section 145 were invoked by the assessee and after a detailed discussion and examination of the seized documents in respect of financial year falling under this block period, undisclosed income of Rs.70,13,557/- was determined by the AO. The AO adopted GP rate at 23% for the purpose of computing undisclosed income. It was categorically held by the AO that assessee is not entitled for any expenses as the same had already been covered under the Expenses Head of 77%, since GP has been ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee worked out the sale of bricks at Rs.61,68,819/- Therefore, in these two financial years, viz 1996-97 and 1997-98, there is insignificant difference between the estimation made by the AO and the assessee. Accordingly, the findings of the AO, based on the analysis and examination of the seized documents for the purpose of quantification of the sale of bricks outside the books of account is admitted for the reasons that in the above said financial years, the assessee had itself admitted the sales outside the books of account, as discussed above. In view of the above discussions, the contention raised by the assessee that estimation of sale of bricks on the basis of seized documents cannot be made, is not statutorily tenable. 9. Ld. 'AR' contended that the CIT(A) has failed to appreciate the factum after confirming the GP rate, to consider and allow expenses appearing in the Prof it Loss Account. He was of the opinion that in such cases, it is proper to follow NP and not GP. He placed reliance on the decision in the case of C.V. Sunny V ACIT (1008) 7 DTR (Chennai ) (TRIB) 478. The relevant part of the said decision is reproduced hereunder : search seizure-Block ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee admitted in the statement under s. 132(4) regarding suppression of sales, that cannot be considered as the basis for addition, though there was no seized material relating to the impugned period-Since the words may be presumed are incorporated in the Section, it gives option to the authorities concerned to presume the things-But it is rebuttable and it does not give definite authority and not a conclusive one-The assessee has every right to rebut the same by producing evidence in support of its claim-Since there is no justification for estimation of income, there is no question of considering the basis for estimation, whether on GP or net profit- However, if at all the income is to be estimated, it has to be done on the basis of net profit only-AO is directed to confine to determination of undisclosed income only on net asset basis based on the materials and evidences found during the course of search, if it is not reflected in the regular books of account. 10. The AO, further, placed reliance on the decision of the ITAT, Indore in the case of Eagle Seeds Biotech Ltd. V ACIT (100 ITD 301 (Indore). The relevant part of the decision is reproduced hereunder : Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly absent in the comparable cases, relied upon by the assessee. Consequently, the comparable cases relied upon by the assessee are not applicable to the facts of the present cases. 15. A bare perusal of the two decisions of the Tribunals relied upon by the assessee, as discussed above, deals the issues pertaining to applicability of net profit in search cases. Therefore, having regard to such case laws cited by the assessee, undisclosed income is computed by adopting net profit for various assessment years falling in the block period, as discussed earlier. The AO and the assessee estimated the sales of bricks for various financial years and at the cost of repetition, the assessee admitted the sales computed by the AO for the financial year 1993-94, 1994- 95, 1995-96 and 1998-99 for the financial year 1996-97, 1997-98 falling under the block period, there is insignificant difference in the working out of the sale of bricks by the assessee and the AO, as discussed earlier. Thus, having regard to the detailed examination and analysis of the various seized books of account and other incriminating documents, the AO had worked out the sale of bricks for various financial years in his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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