TaxTMI 
TaxTMI 
2014 (10) TMI 265
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd seizure under Section 132 of the Income-tax Act, in the premises of the assessee on 6.1.2009. After completing all procedural formalities, assessments for the years 2003-04 to 2009-10 were reopened. However, these appeals are concerning the assessment years 2006-07 to 2009-10 only. Accordingly, the assessments were completed by Annexure A orders where, rejecting the books of accounts of the assessee and relying on comparable cases, the Assessing Officer estimated the gross profit at 40% of the gross receipts and estimated the net profit at 15% of the gross receipts. The Assessing Officer also found that there was undisclosed investment and disallowed depreciation claimed. 2. The appeals filed before the Commissioner of Income- tax were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rust. The gross receipts from medical college and hospital from A.Yr.2006-07 onwards exceed 40,00,000/-. In view of the fact that the assessee trust has not been granted exemption u/s 11 or 10(23C) of the IT Act, the accounts of the trust are liable to be audited as per the provisions of the Sec.44AB of the IT Act. During the course of hearing held on 14.12.2010, it is admitted that statutory audit as per the provisions of Sec.44 AB has not been carried out by the trust in any of the relevant assessment years. It is also noted that the deficit arrived at by the trust after setting off revenue as well as capital expenditure on estimate basis and hence, does not represent true and correct facts relating to the income of the respective assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is, therefore, proposed to adopt the income from the activity of running the hospital and medical college carried out by the assessee trust @ 40% of the gross collection. Income by way of interest income and rental income and other miscellaneous income, etc. are assessed to tax separately under the head income from other sources for all the assessment years for which assessment proceedings are pending u/s 153A." 6. In the light of the above factual position, the correctness of which are not seen contradicted either before the Assessing Officer or before the statutory appellate authorities, we find no reason to accept the contention raised by the counsel for the appellant that the Assessing Officer ought not to have been rejected the book....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in Section 142(3) of the Income-tax Act and also in the judgments in Yaggina Veeraraghavulu and Mavuleti Somaraju & Co. v. Commissioner of Income-tax (1962 ITR 528), S.Sarabhaiah Setty & Sons v. Commissioner of Income-tax (1964 ITR 175) and Joseph Thomas & Bros. v. Commissioner of Income-tax (1968 ITR 796). 10. Therefore, we must certainly accept the case of the assessee that the estimation of income made by the Assessing Officer without disclosing the materials relied on and also denying them an opportunity as stated by us above was not only in violation of the statutory provisions, but also in violation of the principles of natural justice. For that reason, we cannot sustain the estimation of income made by the Assessing Officer. Necessa....