TMI Blog2015 (6) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... the directions of ITAT - Decided in favour of assessee. - ITA No. 746/Hyd/2014 - - - Dated:- 8-5-2015 - P M Jagtap, AM And Saktijit Dey, JM,JJ. For the Appellant : Shri P Murali Mohan Rao For the Respondent : Smt G Aparna Rao ORDER Per: Saktijit Dey,JM. This appeal by assessee is directed against the order dated 25/03/2014 passed u/s 263 of the IT Act, 1961 (Act) by ld. CIT-II, Hyderabad for the AY 2009-10. 2. Briefly the facts are, assessee a company is engaged in the business of trading in steel products. For the AY under consideration, it filed its return of income on 31/03/2010 declaring income of ₹ 11,87,302. Subsequently, assessee filed a revised return on 26/08/2010 declaring total income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts of revenue and accordingly issued a notice on 26/02/2014 to assessee directing it to show cause as to why assessment order shall not be revised due to the following errors: 3. On verification of asst. record, it is seen that while completing the assessment, the books of account were rejected on the ground that there were some discrepancies and the income was estimated @ 1% on the gross sales of ₹ 648,80,66,096 and the total income was determined at ₹ 3,83,36,064 after allowing preliminary expenses, selling and administrative expenses and salaries to employees and depreciation amounting to ₹ 2,73,30,336. However, in the computation the depreciation of ₹ 11,89,495 was added back and depreciation of ₹ 7,35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er observed that once books of account are rejected and income is estimated, AO cannot rely on the same books of account for allowing expenses from the estimated income. For coming to such conclusion, he relied upon certain judicial precedents. On the aforesaid reasoning, ld. CIT finally concluded that assessment order passed being erroneous and prejudicial to the interests of revenue has to be set aside with a direction to AO to pass the assessment order taking into consideration the issue of non-allowability of expenditure from the estimated income. Being aggrieved with the order of ld. CIT, assessee has preferred this appeal raising as many as 10 grounds both on the jurisdictional issue as well as on merits. 5. We have heard the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om steel trading business and from such estimated gross income allowed certain expenditure. Assessee preferred appeal against the said assessment order before ld. CIT(A) by specifically challenging the rejection of books of account and estimation of gross income at 1%. Ld. CIT(A) while disposing of the appeal, though, upheld the rejection of books of account, but, estimation of gross income was reduced from 1% to 0.7%. Thus, as can be seen from the aforesaid facts, assessee has not only challenged the rejection of books of account but also estimation of gross income before ld. CIT(A). Therefore, all issues ancillary and incidental to the estimation of profit also became subject matter of appeal before ld. CIT(A). In that view of the matter, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
