2012 (3) TMI 61

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....och/2010 and ITA No.326 & 327/Coch/2009. The first issue arises for consideration in all these appeals is estimation of profit. 3. We heard the ld.senior counsel for the assessee and the ld.DR. The Commissioner of Income-tax(A) for the assessment year 2003-04 estimated the profit at 1.25% of the turnover; for the assessment year 2004-05 the profit was estimated at 1%; for the assessment years 2005-06 and 2006-07 the profit was estimated at 1.25%. After going through the materials available on record the Commissioner of Income-tax(A) estimated the profit after taking into consideration the comparable cases and the profit ratio of the similarly placed traders of the locality. Therefore, we do not find any infirmity in the profit ratio adop....

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....g the source or the investment in the construction. Similarly, the profit estimated by the assessing officer as confirmed by the Commissioner of Income-tax(A) would also be available for investment in the construction of course subject to personal drawings. Therefore, it is a matter for verification by the assessing officer. Accordingly, the orders of the lower authorities with regard to unexplained investment in cost of construction are set aside and the issue is remitted back to the file of the assessing officer. The assessing officer shall examine the issue afresh in the light of the contentions of the assessee and thereafter decide the same in accordance with law after giving reasonable opportunity of hearing to the assessee. 5. The ....

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..... Accordingly, the order of lower authorities with regard to levy of penalty is set aside and the entire issue is remitted back to the file of the assessing officer. The assessing officer shall examine the issue afresh in the light of the above observation of the Tribunal and thereafter decide the same in accordance with law after giving reasonable opportunity of hearing to the assessee. 8. Now coming to ITAs No.137, 138 & 139/Coch/2010; these appeals are against the orders of Commissioner of Income-tax(A) confirming the penalties levied u/s 271B of the Act. The ld.senior counsel Shri T.M. Sreedharan submitted that the assessee could not get the audit report in all the three years. We have heard Ms Vijayaprabha also. Since the assessee c....