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TMI Blog2019 (1) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 2. Effective ground No.2 reads as under:- ''2.1 The CIT(A) erred in deleting the estimation of the gross profit by the Assessing officer on the ground that Assessing officer was not justified in ,resorting to estimation of gross profit. 2.2 The CIT(A) ought to have seen that the Assessing Officer has enhanced the gross profit on the reasoning that the assessee had not produced any documentary evidence in support of reduction in profit margin. 2.3 The CIT(A) ought to have further seen that the Assessing officer resorted to the estimation Gross Profit addition based on the material gathered during the survey operation u/s.1334 and hence the decision of Hon'ble Madras High Court in the case of CIT vs, S.Khader Khan sons (300 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 3.Penalty Proceedings u/s.271 (1) ( c) of the lncome tax Act,L961 was not initiated relevant to the AY 2012-13''. Accordingly, ld. Assessing Officer took up the assessment afresh. Assessee was required to produce evidence for claiming lower gross profit and net loss in the relevant previous year. As per the ld. Assessing Officer, assessee did not produce evidence which were called for by him. Ld. Assessing Officer noted that gross profit ratio shown by the assessee for financial year 2010-2011 was 32.40%, whereas for the previous year relevant to impugned assessment year, it was only 10.13%. For coming to this conclusion, he relied on the following data gathered from the Audit report in form 3CD for financial year 2010-2011 and 2011-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals) also noted that assessee had maintained regular books of accounts which were subjected to audits u/s.44AB of the Act. Ld. Commissioner of Income Tax (Appeals) took a view that statements recorded u/s.131 of the Act at the time of survey on 26.07.2011 had no evidentiary value by virtue of judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. S. Khader Khan Sons, 300 ITR 157. Ld. CIT(A) also took cognizance of CBDT Instruction F. No.286/02/2003-IT (Inv-II) dated 10.03.2003 which discouraged the Department from making assessments based on statements recorded during the course of search, seizure and survey. He thus deleted the addition made by the ld. Assessing Officer for the gross profit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not made any addition for the excess stock of 1kg gold. Presumably this was due to the fact that assessee in the return had shown a sum of E14,38,72,000/- as income of an extraordinary nature. However, ld. Assessing Officer proceeded to make an assessment enhancing the gross profit returned by the assessee. We are afraid the ld. Assessing Officer made a mistake in pursuing this line for making an addition. He had not found any deficiency in the books of accounts or supporting records. There is no case for the Revenue that assessee failed to produce its books of accounts or the evidence in support of such books of accounts during the course of assessment proceedings. It is to be noted that original by the assessment was completed u/s.143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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