2014 (1) TMI 600

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.... but without reference to facts. In fact the finding of the tribunal in paragraph 11 is as follows: It is true that the details of sales turnover relating to the toddy business of the assessee-firm as well as the sister concern, M/s. Kunjachan & Associates were collected in the course of search. The finding similar to the above is there in the assessment order as well as in the first appellate order. Assessment u/s. 158BD is permissible if during the course of search u/s. 132 undisclosed income of the person proceeded against is detected. If the turnover of business of 50 shops for 3-1/2 months detected in the search pertains to assessee's business, then certainly the correctness of the income returned for regular assessment has to be tested against the income to be determined from the turnover to be estimated for the whole year by taking up the turnover for 3-1/2 months. In our view the Tribunal being a fact finding authority had the duty to verify the records and see whether assessment u/s. 158BD is made based on materials collected about the assessee in the course of search of another person. In this case, the search is stated to be in respect of a sister concern of the assess....

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....-92 to 31-3-93 as per the above register is reproduced in Annexure-I of this order. That works out as under:- Sales from 16-12-92 to 31-12-92 5 ,07,608/- Sales from 1-1-93 to 31-1-93 9,86,477/- " 1-2-93 to 28-2-93 9,40,274/- " 1-3-93 to 31-3-93 10,11,389/- 34,47,744/- For the financial year 1.4.93 to 31.3.94, the revenue seized cash memos pertaining to the Narakkal range for the whole year. For the financial year 1.4.95 to 31.3.96, the AO noticed cash shortage in the books impounded by him. Thus, we notice that the assessing officer has proceeded to determine the undisclosed income of the assessee on the basis of the documents cited above for the three financial years cited above. 4.1 For the financial year 1.4.92 to 31.3.93, the total sales for 3-1/2 months for 50 shops was worked out at Rs.34,47,744/- on the basis of seized records. Accordingly, the AO computed the average sales for one month for 50 shops at Rs.9,85,070/-. Since the assessee was running 110 shops, the AO arrived at the annual turnover for the financial year 1.4.92 to 31.3.1993 for all the 110 shops as under:- 9,85,070/50 x 110 shops x 12 months = Rs.2,60,05,848/-. The AO estimated the net Profit at 8%....

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.....96 was confirmed by Ld CIT(A). 6. According to Ld A.R, the assessee has declared a turnover of Rs.94.41 lakhs for the financial year 1.4.92 to 31.3.93. The turnover noticed for 3-1/2 months in the seized record was only Rs.34.47 lakhs. Accordingly he submitted that the turnover found in the seized record was already accounted in the regular books of account and hence there is no case for making any addition in the block assessment proceedings. In the alternative, the ld A.R submitted that the turn over found in the seized record an at best be treated as unaccounted turnover, on which the profit may be estimated at 6%, as determined by Ld CIT(A). The Ld A.R further submitted that the Tribunal, in the earlier round, has made a specific observation, viz., the assessing officer had no case that the assessee firm had not accounted for that turnover. 7 It was pointed out to the Ld A.R that the Hon'ble High Court has directed the Tribunal to consider the matter on merits after going through the records and accordingly he was asked to produce the original records. However, the Ld A.R expressed his inability to produce the books of accounts. In this regard, he filed an affidavit given by....

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....eady been accounted for or disclosed shall lie upon the assessee. In the instant case, the assessee has expressed its inability to produce the books of accounts, meaning thereby, the assessee has failed to show that the turnover noticed in the seized records have already been accounted for in the books of accounts. Under these circumstances, we proceed to deal with the contentions of the assessee on the basis of available materials treating the turnover found in the seized records as actual turnover, extrapolating the same for the whole year as held by Hon'ble High Court and then compare the same against the reported turnover in the regular assessment proceedings. 9.2 We notice that the seized records pertained to Narakkal range consisting of 50 shops. The assessee owned 60 more shops in two other ranges, thus making the total shops to 110. In the financial year 1.4.92 to 31.3.93, the AO has determined the turnover for all the 110 shops on the basis of turnover noticed in the seized record pertaining to 50 shops falling in Narakkal range for 3-1/2 months. However we notice that, in the succeeding year, the AO has proceeded to determine the undisclosed income in respect of 50 shops....