9911796707
TMI Blog2020 (12) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... peal: 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2A. The order of assessment passed u/s 153C rws 143[3] of the Act is bad in law and void-ab-initio in as much the conditions precedent to invoke the provisions of sec. 153C of the Act viz., the discovery of any assets/documents in course of search conducted in the case of any person that belongs to the appellant and is relevant for computing the income of the appellant for the year under appeal is totally absent and consequently the impugned assessment order passed deserves to be cancelled. 2B. The learned CIT[A] is not justified in upholding the proceedings initiated u/s. 153C of the Act without appreciating that the appellant has not been furnished the copy of the satisfaction reached and recorded by the Assessing Officer of the person searched as well as the Assessing Officer of the appellant as required u/s. 153C of the Act despite the request made by the appellant before the learned A.O. as well as the learned CIT[A] and hence, the impugned order of assessment passed without giving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complied with the directions and participated in the assessment proceedings. In the search proceedings cash amounting to Rs. 14,80,000/- and gold jewellery aggregating to 1970.30 gms was seized. Subsequently the AO has issued notice u/sec143(2) and U/sec142(1) of the Act. The AO dealt on the statement recorded U/sec132(4) of the Act and confirmed the Jurisdiction u/sec153C of the Act. The A.O. has Considered the submissions and explanations on the business income of the assessee, but was not satisfied and has rejected the business income disclosed and estimated the business income @12% of the gross receipts and passed Assessment Order under section 153C r.w.s. 143(3) of the Act, dated 30.11.2016.with the total income of Rs. 1,94,74,948/-. Aggrieved by the order, the assessee has filed an appeal with CIT(A), whereas CIT(A) on the issue of validity of Assessment Order under section 153C of the Act has rejected the contentions of the learned AR and confirmed the validity of the Assessment Order. In respect of estimation of income by the AO @12% of gross receipts, the CIT(A) has dealt on the disputed issue at para 7.8 of the order and restricted the addition of business income @ 8.5% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to 5 [subsection (1) ot] section 153A shall be construed as reference to the date of receiving the books of account ordocuments or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person." 11.Considering the above provision of the Act and findings of CIT (A) who has held once relied by the counsel are distinguishable on facts as in the case of the assessee there was no seizure of assets in the form of valuables cash and jewellery was found. Therefore, same is upheld." 5.We find the facts of the present case are similar and identical. Accordingly, we follow the decision of the co-ordinate Bench and uphold the validity of assessment u/sec153C of the Act and dismiss this ground of appeal of the assessee. On the second disputed issue, the learned CIT(A) has restricted the business income of the assessee @8.5% of the gross receipts. The learned AR's contentions are that the assessment has not abetted since the time limit for issue of notice under section 143(2) of the Act expired before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that the assessee could not produce books of accounts and supporting vouchers of expenses and there was huge expenses debited in Profit and Loss Account. Hence, we are of the considered opinion that the AO has rightly rejected book result under the provisions of section 145 of the Act. Hence, same is upheld. However, so far the estimation of percentage at 8.5% is concerned, we find that the rate of gross profit is disclosed at 8.94% in A.Y. 2011-12, 8.98% in A.Y. 2012-13 , 7.43% in A.Y. 2013-14, 7.12% in A.Y. 201415 and 7.12% in A.Y. 2015-16 of which average comes to 7.918%. Hence, the CIT(A) was not justified adopting rate at 8.5% of gross receipts by upholding the addition on this account. Since, the average gives a rate of 7.918%, which is almost equal presumptive rate of 8% under section 44AD in the case of non-maintenance of books of accounts. Therefore, on careful consideration of facts and taking a reasonable approach, it would be met end of justice, if the profit rate were applied to 8% being equal to presumptive rate under section 44AD of gross receipts as against estimation @ 8.5% by Ld. CIT (A). The AO is, therefore, directed to recalculate the addition of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 234-B of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 10.On the grounds of appeal of 2A and 2B, the decision of the Tribunal for the Assessment Year 2014-15 referred at page 8& 9 of the order shall apply. Accordingly, we restrict the income @ 8% of gross receipts as followed in the earlier Assessment Years and partly allow the ground of appeal. 11. The ground of appeal No.3 is with respect to addition of Rs. 4,93,000/- being 1/3rd of the cash seized at the time of search, the coordinate bench of Tribunal in the case of Shri Panati Vittalnath Reddy VS DCIT (Supra) has deleted the addition referred at page 27 at para 45 of the order as under: "45. We have heard the rival submissions and perused the relevant material on record. We find that the assessee has withdrawn cash of Rs. 7 Lakh on 01.10.2W014, hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord. We find that it is fact that jewellery of all family members was kept together at one place and assessee was jointly residing therein. The inventory so made during search is also reflecting this fact. The assessee has filed a list of 19 person to whom this jewellery was found during search. The fist of 19 person to whom jewellery belonged was submitted during the course of assessment proceedings, which is placed at Paper Book Page No. 262, according to which the assessee has owned jewellery of 261 grams, which reflected in balance sheet. Therefore, there was no justification in making addition in the case of the assessee. Therefore, we are of the considered opinion the no addition can be made in the hands of the assessee by treating 1 /3rd of seized jewellery in his hand as jewellery was belonging to entire family members. Therefore, if at all if any addition to be made it is to be equally divided among family members. Further, the assessee has only claimed jewellery of 261 grams as belonging to him, which has been reflected in balance sheet as on 31.03.2011 hence, no addition could be made in the hands of the assessee. Further, considering the CBDT Circular which provides j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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