TMI Blog2013 (12) TMI 1566X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing officer is directed to modify the computation of income accordingly. Assessee’s grounds are considered allowed accordingly. - ITA Nos.158 to 161/Vizag/2013, ITA Nos.162 to 164/Vizag/2013 - - - Dated:- 13-12-2013 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER Appellant by: Shri I. Kama Sastry, CA Respondent by: Shri K.V.N. Charya, CIT(DR) ORDER Per B. Ramakotaiah:- These appeals are by assessee against the orders of the CIT(A), Hyderabad dated 28.12.2012 in the case of respective assessees. The assessee has raised various grounds including the jurisdictional grounds. We have heard Ld. Counsel and Ld. D.R. in detail. 2. M/s. Sree Lalitha Constructions was a partnership firm operated upto Assessment year 2006-07 and then converted into a company. Accordingly, the assessees are filing returns. The assessees are engaged in execution of civil contracts. A search and seizure operation was conducted u/s 132 of the Act in the case of M/s. SLC Projects on 14.7.2009. A notice u/s 153A of the Act was issued not only in the case of SLC Projects but also erstwhile partnership firm M/s Sree Lalitha Constructions. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2005-06 and dated 24.12.2008 for A.Y. 2006-07 and thus no assessments were pending when the search has taken place. Therefore, assessing officer does not have any jurisdiction to initiate proceedings u/s 153A or reassess the assessments without any incriminating material. The third contention raised by the assessee counsel was that the incriminating material referred to by the assessing officer pertaining to assessment year 2009-10/2010-11 and as there was no incriminating material, assessing officer was precluded in making the re-assessment on the same issues which were examined and concluded in the proceedings u/s 143(3) of the Act vide the respective orders passed. Therefore, it was the contention that as far as the assessments in the case of Sree Lalitha Constructions are concerned, the orders are bad in law. 5. With reference to the issues in M/s. SLC Projects Pvt. Ltd., the Ld. Counsel however restricted the arguments to the estimation of income relying on the decisions by various Tribunals. It was the submission that even though after estimating income at 9.5% the assessee company was entitled to depreciation and if the same is allowed, assessee has no grievance in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts and vouchers were found and it was admitted that the M.D. consequent to the completion of the assessments, the relevant books of accounts and vouchers were shifted to a godown and they were not able to locate the relevant books of accounts. Even though the Ld. D.R. argued that non-availability of books of accounts itself is incriminating, we are not in agreement with the above arguments. Even in the other papers impounded/seized in the course of proceedings, there was no reference to any of the impugned assessment years on 2004-05, 2005-06 2006-07 pertaining to the assessee. Therefore, the assessments concluded therein, particularly with reference to estimation of income in the orders u/s 143(3) of the Act has become final. Consequently, assessing officer cannot re-agitate and re-determine the estimation of income in the present proceedings. Be that as it may, even the jurisdiction itself is not correct. The assessee, if at all there is any incriminating material, should have been considered under provisions of section 153C of the Act. As seen from the notices, assessee was issued notices u/s 153A of the Act as if there was a search on the assessee which is not correct. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53C. However, no information was placed on record. As seen from the order placed on record, there is no finding by the Assessing Officer who completed the search assessment, that these documents pertained to the assessee. Nor there is anything in the proceedings initiated that these are required to be considered in the case of the assessee. Therefore, on the preliminary issue of jurisdiction itself, as the assessee is not a searched party, notice under s.153A cannot be issued, and the assessee having been issued a notice under s.153A, proceedings under s.153C cannot be completed. 10. Respectfully following the above, we hold that assessing officer having issued a notice u/s 153A of the Act, could not have completed proceedings which are supposed to be done u/s 153C of the Act if there is any incriminating material and accordingly, the proceedings itself become bad in law. In view of the above, we have no hesitation in setting aside the orders passed by the authorities in ITA Nos.162, 163 164 in the case of Sri Lalita Constructions.. Since we have considered the issue on jurisdiction other contentions of assessment on merits of addition made becomes academic. Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the above submissions of the assessee and perused the various case law and the facts of the case. As seen from the orders in the assessee s own case completed by assessing officers in A.Y. 2004-05 to 2006-07, in the status of Sri Lalitha Constructions before it became company, the assessee has accepted the rejection of books of accounts and estimation of incomes. Even before us, assessee is not pressing for acceptance of the books of accounts and has agreed to estimation of income. Therefore, the only issue for consideration in these appeals is the estimation of income. 14. As seen from the record in A.Y. 2004-05 on a turnover of ₹ 5.97 crores, the assessee accepted estimation at 8.5% less depreciation, interest and remuneration. In A.Y. 2005-06 however the assessee accepted income at 6% net on turnover of ₹ 10.70 crores. In A.Y. 2006-07 on a turnover of ₹ 8.54 crores, the assessee accepted estimation at 10.5% before depreciation. Thus as can be seen from the above three orders of the firm before it became company, assessee is accepting various rates of estimation. Therefore, there cannot be consistent rate to be considered in arriving at the estimation in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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