TMI Blog2014 (6) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... very well assess as well as reassess the ROI if it is so done – Decided against Assessee. Addition of unexplained capital expenses – Expenses incurred in on erection and installation of plant and machinery – Held that:- The genesis of the addition is the Inspector’s report - the report was never confronted to the assessee - The assessee has argued that no such capital expenditure was incurred during the year - Entire working and finding of the CIT(A) again is found to be based on Inspector’s report - Untested statement of the Inspector given in his report cannot be made a basis of any addition unless it is confronted with the assessee and moreover, certain other corroborative evidence is found – thus, this baseless addition is set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return filed originally on 7.9.2007 may be treated as ROI filed in compliance of this notice. The assessee derived his income from purchase and sale of machinery parts. During the year, the assessee had installed stone crusher and starting deriving income from manufacture and sales of kapchi and broken pieces of stones which are utilized in RCC work. The assessee produced cashbook and ledger but did not produce complete books of account when demanded by the A.O. Accordingly, the A.O. invoked the provisions of section 145(3) of the Act and made trading addition of Rs. 3,21,248/-. The A.O. also made other additions and computed assessee s total income at Rs. 30,55,770/-. 3. Being aggrieved, the assessee filed appeal before the ld. CIT(A) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence of escapement of income. Accordingly, we cannot hold that the action taken u/s 147 r.w.s.148 and section 144 is not a valid action. The A.O. can very well assess as well as reassess the ROI if it is so done. Therefore, the ground Nos. 1 and 2 cannot be allowed and we dismiss the same. 5. Facts apropos Ground No. 3 of this appeal are that on the basis of Inspector s report, the A.O. has estimated the expenditure allegedly incurred on erection and installation of plant and machinery. The A.O. found that there were certain purchases made from various parties which are not reflected in the books of account. The A.O. has estimated the amount of construction of the platform for crusher, chowkidar room, for plant and machinery, foundat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year and the addition is based on suspicion and surmises only. The ld. D.R. has supported the orders of the authorities below. 6. We have heard the rival submissions and have carefully perused the entire material on record. We have found that the genesis of this addition is the Inspector s report. It was found for a fact that this report was never confronted to the assessee. The assessee has vehemently argued that no such capital expenditure was incurred during the year. Entire working and finding of the ld. CIT(A) again is found to be based on Inspector s report. Untested statement of the Inspector given in his report cannot be made a basis of any addition unless it is confronted with the assessee and moreover, certain other corrobora ..... X X X X Extracts X X X X X X X X Extracts X X X X
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