9911796707
TMI Blog2016 (11) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... 012. During the course of survey, it was found that assessee is not maintaining regular books of account and verifiable evidence for expenses. In the course of survey, the Managing Partner admitted net profit of 5% on the gross transport contract receipts for AYs. 2011-12, 2012-13 & 2013-14. Assessee has duly acted upon the statements and filed returns accordingly admitting incomes disclosing net profit at 5% for AY. 2011-12 & 2012-13. However, for AY. 2013- 14, during which year the survey operations were conducted, assessee seems to have maintained books of account after the survey and filed return declaring income at Rs. 29,16,856/- on gross receipts of Rs. 14,75,28,963/-. The AO i.e., ITO, Ward-I, Mancheriyal, completed the assessment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.CIT and after extracting the statement given by the partner in the course of survey, Ld. Pr.CIT set aside the assessment with a direction to revise the total income by adopting 5% of the gross contract receipts. He also directed the AO to initiate the penalty proceedings u/s. 271(1)(c). His orders in para 6, 7 & 8 are as under: "06. A perusal of the written statements filed by the assessee firm for the A.Ys 2011-12 and 2012-13 reveals that the assessee has disclosed net total incomes of Rs. 73,44,370/- on gross receipts of Rs. 14,68,87,443/- for AY 2011-12 and Rs. 83,39,680/- on-total gross receipts of Rs. 16,67,93,605/- for AY 2012-13 which are at 5% of the gross bills. Thus it is evident from record that the assesse has acted on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... survey and that whatever books were produced were prepared subsequently from the rough note books and also admitted that there were no agreements with the lorry owners and there was no basis for the payments allegedly made to them. Thus the situation existing prior to the date of survey was equally persisting subsequent to the date of survey also and there was no change at all and whatever rough note books and cash vouchers maintained by the assessee are not amenable for any reasonable and independent verification. 07. In the cited case of M/s S Khader Khan and Son, the Hon'ble Madras High Court has clearly brought out the' crucial facts that within a week of the survey conducted in that case, that assessee has retracted from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecording the wrong fact of returned income being at the rate at which admission was made. The assessee also cannot accept a part of the sworn statement by honouring it while filing its returns of income for AY. 2011-12 and 2012-13 and discard its own admission in the sworn statement while filing its return of income for AY. 2013-14 that to without any basis or change in circumstances. It is also not the case of the assessee that immediately after the date of survey, its profitability has taken a beating". 08. For the reasons stated above, I hold that the impugned Assessment Order dated 10.12.2013 is erroneous and prejudicial to the interests of revenue and direct the Assessing Officer to revise it by adopting the total income at 5% of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.CIT that order of the AO is erroneous in the sense while it was stated that AR admitted for estimation of income as admitted during the course of survey, but in page 2 of the order, income returned was accepted without any reason. 5. We have considered the rival contentions and perused the documents placed on record. Admittedly, during the course of survey operations, assessee in fact offered income at 5% of the gross receipts as it has not maintained proper books of account. Not only that, assessee also followed it up by filing the returns for AY. 2011-12 and 2012-13 offering incomes at 5% of the gross receipts which were accepted by the department. Therefore, assessee's contention that statement given during the survey does not have an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count are not forthcoming from the order. Therefore, we are of the opinion that Ld. Pr.CIT exercised his jurisdiction u/s. 263 validly as there is an error in the order itself as can be seen on the face of it. This is certainly an order erroneous and prejudicial to the interest of Revenue. 5.2. However, we are not convinced with the direction of the CIT to adopt 5% of the gross receipts, without giving an opportunity to assessee. In fact, assessee's submission is that it had maintained books of account. Therefore, in our opinion, the veracity and correctness of the books so maintained should have been examined by the AO afresh. In view of that, we modify the order of CIT directing the AO to enhance the income, to set aside the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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