TMI Blog2018 (5) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... not be considered to be part of book profit for the purpose of computing partners’ remuneration under Section 40(b)(v) of the Act. Therefore, the Principal Commissioner has rightly exercised his jurisdiction under Section 263 of the Act. As rightly submitted by DR, AO assessed the difference of ₹ 11,39,930/- from the cash found during the course of search operation and the income disclosed by the assessee. The Assessing Officer has not made any enquiry to find out the profit or income generated in the course of business as per the books of account. Therefore, this Tribunal is of the considered opinion that there is an error in the order of the Assessing Officer which is prejudicial to the interests of Revenue. Apart from the undisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the order of the Principal Commissioner of Income Tax, Central-2, Chennai, dated 15.07.2016 under Section 263 of the Income-tax Act, 1961 (in short 'the Act'). Consequent to the order of the Principal Commissioner, the Assessing Officer passed an order on 13.02.2017. The assessee filed an appeal before the CIT(Appeals) and the CIT(Appeals) confirmed the addition made by the Assessing Officer against which, the assessee filed appeal in I.T.A. No.2569/Chny/2017. Therefore, we heard both the appeals of the assessee together and disposing of the same by this common order. 2. For the sake of convenience, first let s take I.T.A. No.2489/Chny/2016. 3. Shri D. Anand, the Ld.counsel for the assessee, submitted that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as fluctuation in the price of gold in the international market. The rates of gold would vary several times in the course of business. According to the Ld. counsel, the stock admitted by the assessee as on 31.03.2011 has to be taken as opening stock as on 01.04.2012. Therefore, according to the Ld. counsel, the order of the Assessing Officer is not erroneous. Moreover, no prejudice is caused to the Revenue, therefore, the Principal Commissioner is not correct in revising the order of the Assessing Officer in exercise of his jurisdictional power under Section 263 of the Act. 6. On the contrary, Smt. Ruby George, CIT, the Ld. Departmental Representative, pointed out that the original assessment was completed under Section 143(3) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and cash was found and seized. The assessee returned income. However, the entire cash was not disclosed in the return of income, therefore, the Assessing Officer assessed the difference between the cash found during the course of search operation and the income returned by the assessee in the return of income to the extent of ₹ 11,39,930/-. The Principal Commissioner found that what was disclosed by the assessee and assessed by the Assessing Officer is in respect of the unaccounted income generated outside the books of account. Therefore, the Principal Commissioner found that the Assessing Officer has not made any proper enquiry to find out the income generated by the assessee from the business carried on as per the books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming to the assessee s appeal against the order of the CIT(Appeals). 11. Shri D. Anand, the Ld.counsel for the assessee, submitted that the Assessing Officer has not found any defect in the books of account. According to the Ld. counsel, the assessee has disclosed gross profit of ₹ 1,37,36,083/- with G.P. ratio of 0.36% till 22.09.2011. In the post search period, i.e. from 22.09.2011 to 31.03.2012, the assessee has declared a loss of ₹ 75,80,388/- as per the books of account. According to the Ld. counsel, the Assessing Officer completed the assessment by ignoring the loss as per the books of account and estimated the gross profit at 0.17%. The Assessing Officer has not rejected the books of account at any point of time desp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected the same by estimating the gross profit at 0.17%. Since the books of account maintained by the assessee were not rejected and no defect was pointed out by the Assessing Officer, according to the Ld. counsel, the Assessing Officer is not justified in estimating the profit for the purpose of ignoring the loss claimed during the post-search period. 13. We have considered the rival submissions on either side and perused the relevant material available on record. The CIT(Appeals) found that the Assessing Officer estimated gross profit at 0.17% without any comparison. Equally, the CIT(Appeals) found that the assessee could not substantiate the claim of low gross profit. Therefore, he estimated the gross profit at 0.12%. The fact remai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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