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2016 (3) TMI 822 - ITAT DELHI

2016 (3) TMI 822 - ITAT DELHI - TMI - Reopening of assessment - Held that:- During the course of original assessment proceedings the books of a/c along with the audit report were duly furnished and were accepted while passing order u/s 143(3). The assessee has not filed the assessment order passed u/s 143(3) in the present case. Thus the initiation of proceedings u/s 147 of the Act were not valid. Accordingly, orders of authorities below in all the appeals in question are quashed and the assesse .....

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ication, all these appeals were heard together and are being disposed of by this common order for the sake of convenience. As the facts are common in all the appeals, we are referring to the facts as obtaining in ITA no. 3914/Del/2014.Grounds raised are as under: That the learned Commissioner of Income Tax (Appeals) Rohtak has grossly erred both in law and on facts in upholding the initiation of proceedings u/s 147 of the Act and assumption of jurisdiction to frame an assessment u/s 1471143(3) o .....

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e of CIT vs. Greenworld Corporation reported in 314 ITR 81 1.2 That further more since there was no fresh material on record that surfaced after the assessment u/s 143(3) of the Act and as such in terms of judgment of jurisdictional High Court in the case of CIT vs. Orient Craft Ltd. reported in 354 ITR 536, the action was otherwise invalid and hence unsustainable. 1.3. That the learned Commissioner of Income Tax (Appeals) has otherwise failed to appreciate that since original assessment had bee .....

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e learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding determination of income by the learned Assessing Officer at ₹ 85203/- by invoking section 44AD of the Act being 8% of the gross receipts declared by the appellant society. 4. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining an addition of ₹ 35203/- to the income returned by the appellant before claim of deduction u/s 80P of the A .....

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he I.T. Act on 23.08.2007. Assessment was completed u/s 143(3) vide order dated 30.1.2009 at an income of ₹ 61,522/- before deduction u/s 80P(2) of the Act. Subsequently, the AO noticed that assessee had failed to produce complete books of a/c along with bills and vouchers, therefore, profit rate at 8% of the gross receipts u/s 44AD of the I.T. act was applicable as the assessee was doing contract business. Accordingly, he issued notice u/s 148 recording following reasons: 4 "Return o .....

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ich works au to be 5.78% of the gross receipt. Consequently in respect of wages paid and Miscellaneous expenses, complete bills and vouchers were not verifiable. The wages paid account constitutes the major account of expense in the P & L account if the assessee. The assessee has failed to produce complete books of account along with bills & vouchers, therefore, profit rate @ 8% u/s 44AD of the 11: Act, 1961 is applicable in the case of the assessee who is doing contract business. The pr .....

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gross receipts and determined the income at ₹ 85,203/- before deduction u/s 80P(2). 4. Before ld. CIT(A) the assessee had assailed the initiation of proceedings u/s 148 primarily on the ground that it was a case of change of opinion. Ld. CIT(A), however, dismissed the assessee s appeal observing that since disclosure of fact had not been made, there was reason to believe that income had escaped assessment and it was not a case of mere change of opinion but a finding of belief that income .....

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ssing Officer under sec. 147 of the Act. It is a matter on record that during the original assessment framed under sec:-143(3) of the Act the Assessing Officer in para No.1 at page No. 1 had specifically recorded as "In response to above notice, Sh. N.K. Gupta, Adv. of the assessee society attended the proceedings from time to time and filed the requisite details and documents. Books of account produced and test- checked on random basis. The case is discussed with him." In para No.2 of .....

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e requisite detail and justification vide its letter dated 10.2.2009, which was examined and verified ... " I thus find that it was not correct to say on the part of the Assessing Officer in the reasons of belief recorded for initiation of reopening proceedings, that the assessee had failed to produce complete books of account along with bills and vouchers, therefore, profit rate @ 8% under sec. 44AD of the Income- tax Act, 1961 is applicable in the case of the assessee who is doing contrac .....

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