TaxTMI 
TaxTMI 
2015 (4) TMI 762
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....nt on 30/12/2011 u/s 143(3) r.w.s. 147 of the Act, determining income of assessee at Rs. 3,54,1,850. ITA No. 407/Hyd/2014 by assessee 3. In this appeal, assessee has raised 8 grounds. Grounds No. 1 & 8 are general in nature, hence, no adjudication is required for the same. Ground Nos. 2 to 5 are pertaining to one issue, which are as follows: "2. The ld. CIT(A) erred in upholding the rejection of books by the AO. 3. The ld CIT(A), Hyd. erred in estimating the income at 0.7% of the turnover which is very high percentage in the line of trade of appellant. 4. The ld. CIT(A), Hyd ought to have appreciated the fact that the appellant's average percentage of profit for the preceding three assessment year is very less i.e. 0.04% for AY 2006-0....
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.... per ton. Hence the average cost of material purchased during the months of February and March works out to Rs. 29,109/- per ton. However, assessee admitted closing stock at the rate of Rs. 33,004/- per ton which is more than the cost price. Further the assessee has not furnished the details of profits, on purchases and sale of computer parts made in July and August. , The purchases as per assessee for the month of March, is Rs. 67,48,30,627/- only. Whereas as per VAT return it is shown at Rs. 71,52,30,627/-. Similarly the sales for the month of March as per books is Rs. 71,16,OO,054/-whereas as per VAT the sales are Rs. 71,53,67,397/-. In view of the above discrepancies and as the assessee did not furnish the full details called for, th....
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....ming to the estimation of income at 1 % of the turnover, once the books have been rejected, the onus now shifts to the assessing officer and it is his duty to estimate the income of the assessee based on cogent reasoning and facts on record. I find that the assessing officer has not brought on record even a single comparable case of assessees who are in similar line of business, He has also not brought on record any other information from which it can be inferred as to what should be the actual net profits of someone who is in similar line of business. Therefore, the estimation of income has not been done on the basis of concrete information. On the other hand, the appellant has stated that its own average net profit of the last three years....
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.... issue came up before the coordinate benches of ITAT, Hyderabad. Copies of the orders have been placed on record. In the case of M/s Sujana Towers Ltd. Vs. ACIT in ITA No. 1360/Hyd/2013 vide order dated 16/07/2014 while dealing similar issue, the coordinate bench held as follows: "7. Elaborate grounds have been raised by the assessee, contending that the rate of 1% adopted by the CIT(A) for estimation of income of the assessee is on the higher side, since adoption of a rate of 0.5% would be reasonable; and nonallowance of depreciation from such estimated income is against the instructions of the CBDT and the decisions of the Tribunal in similar matters. However, at the time of hearing, learned counsel for the assessee pleaded for one more ....
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....rder dated 13.8.2013, restored the matter back to the file of the Assessing Officer, in the following manner- "10. Considering the submissions of the parties and keeping in view the interest of justice, we allow one more opportunity to the assessee for production of its books of accounts and other documents before the Assessing Officer to substantiate its claim and accordingly, set aside the Order of the CIT(A) and remit the matter to the file of the Assessing Officer for denovo assessment after examining the books of accounts and other documents. We also direct the assessee to produce all its books of accounts, documents, bills, invoices and any other information called for by the Assessing Officer and cooperate in finalisation of the pro....
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.... the coordinate bench in case of M/s Sujana Towers Ltd. (supra), we set aside the order of the CIT(A) and restore the matter to the file of AO with a direction to decide the same in the light of the said decision of the coordinate bench. The ground raised by assessee as well as by the revenue are allowed for statistical purposes. 9. The next issue raised by assessee in ground Nos. 6 & 7 are as under: "6. The ld. CIT(A) erred in not allowing deduction of depreciation of Rs. 10,57,816 on computers by considering that the assets was not in existence on the basis of previous year. 7. The ld. CIT(A) ought to have appreciated the fact that once income is estimated, no other additions can be made to the income of appellant company." 10. AO had....