TMI Blog2022 (8) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... r stands deleted. Accordingly, all the effective grounds raise are allowed. Reopening of assessment u/s 147 - taxing the interest income as income from other sources and not treating it as part of gross contract receipts - HELD THAT:- We find that the reason for which the case has been reopened relates to interest income - This interest income has been duly shown in the audited financial statement and tax audit report and it is not a case that the assessee failed to disclose such income in the I.T return. The ld. AO has not received any information from outside source, which the assessee failed to furnish/disclose in the return of income or concealed any particulars. Thus, it is a clear case of change of opinion as the ld. AO passed best judgment assessment order after going through the financial statements and details appearing in the audit report and the audited balance sheet, which included the interest income on FDR/NSC and took a plausible view and estimated the net profit @ 8% of the gross contract receipts as against 0.39% declared by assessee. This action of ld.AO is sufficient to indicate that ld.AO has considered all aspects and took a best judgment to assess th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion at the time of hearing. 4. For that the appellant craves leave to urge, add or alter any other ground or grounds at the time of hearing. Additional Grounds of appeal ITA No. 314/Pat/18 AY 2009-10 1. For that the additional grounds of appeal hereto are without prejudice to each other. 2.1 For that in the facts and circumstances of the case, the learned CIT(A) has failed to adjudicate the following ground:- For that in the facts and circumstances of the case, the Assessing Officer is not justified in resorting the provisions of section 147 / 148 of the I.T Act, 1961. The condition precedent for invoking the provisions of sections I 47 is not applicable. No proceeding u/s 747 could be invoked 1 initiated for making fishing and roving enquiries. Further, no proceeding under 147 could be invoked / initiated for making the impugned addition of Rs. 5,37,4451- being income from other sources. The resorting of the provisions of section 147 / 148 is arbitrary, unjustified, void ab-initio and bad in law. In any case, the assessment as completed u/s 143(3) rws 147 of the I T. Act, 1961 is fit to be annulled 1 cancelled. 2.2 For that this is a case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer on the footing that no such addition has been made by the Assessing Officer. It is submitted that the Assessing Officer very much made the addition of Rs.9,43,735/- to arrive at total taxable income at Rs. 66,98,973/- or Rs. 66,98,970/-. The learned CITA has not decided this ground in proper perspective. 2.2 For that the assessee has received a sum of Rs. 9,43,735/- as hire charges. In order to earn the hire charges, assessee has to provide maintenance to JCB Machine, including salary to driver, salary to helper, fuel charges, repairs and maintenance, depreciation and other charges. The total hire charges is not taxable. The addition of Rs. 9,43,735/- on account of hire charges as sustained 1 confirmed by the learned CIT(A) is arbitrary, unjustified, void ab-initio and bad in law. The addition as sustained is fit to be deleted. 3. For that in the facts and circumstances of the case, the learned CIT(A) is not justified in confirming the disallowances of Rs. 13,33,805/- as disallowed by the Assessing Officer on account of salary and interest payable to partner. The disallowance of Rs. 13,33,8051- as sustained by the Assessing Officer on account of salary an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the claim of salary paid to partners of Rs.96,000/- and interest paid to partners of Rs.12,37,805/- and assessed income at Rs.43,78,437/- u/s. 143(3) of the Act dated 31-10- 2011. 5. As far as this action of the ld.AO estimating the net profit of the assessee and assessing the income of assessee at Rs. Rs.43,78,437/-, and the same is not in dispute before us. Subsequent to completion of assessment u/s. 143(3) of the Act the ld. AO framed/passed the assessment order on 11.12.2015 u/s. 154 r.w.s 143(3) of the Act stating that hire charges shown in the P L account at Rs.9,43,735/- is not in the nature of works contract receipt and, therefore, the same should be added separately to the total income of the assessee. In the very same order passed u/s. 154 of the Act dt.11.12.2015 the ld. AO has made the addition for interest on NSC/FD at Rs.5,47,445/- under the head Income from other sources , which were not added while computing the income in the assessment order u/s. 143(3) of the Act dated 31.10.2011. Thereafter, again another order u/s. 154 r.w.s 143(3) of the Act was framed on 15.01.2016, wherein the ld. AO did not allow the claim of remuneration interest paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s. 144 of the Act and estimated the net profit rate @ 8% of the gross receipts. We find that the adjustments made in the order passed u/s. 154 of the Act dt. 11.12.2015 and 16/1/2016 are not apparent mistakes on records, because the ld.AO has passed best judgment assessment order based on financial statements placed before him and therefore, the adjustments made by the ld. AO in the order passed u/s. 154 of the Act treating the hire charges as part of the contract receipts and again adding them to the total income and also adding the amount of interest on NSC/FD as part of the gross contract receipts and not allowing the claim of partner s remuneration and interest, which have been allowed in the regular assessment proceedings by no stretch of imagination are mistakes apparent from records. Therefore, in our considered view all the adjustments made in the order(s) u/s. 154 of the Act dt. 11.12.2015 and 15.1.2016 have no legs to stand and therefore, the alleged addition in challenge before us arising out of the said order stands deleted. Accordingly, all the effective grounds raised in appeal nos. ITA Nos.315 316/Pat/2018 for the AY 2009-10 are allowed. 8. As far as appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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