TaxTMI 
TaxTMI 
2015 (6) TMI 554
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....ntly, assessee filed a revised return on 26/08/2010 declaring total income of Rs. 11,87,302. In course of assessment proceeding, AO after verifying the books of account and other informations available on record alleged discrepancy in the price for arriving at closing stock as well as between the sales and purchases figures as per book and as per VAT return. Therefore, holding that books of account are not reliable, AO rejected them and proceeded to estimate the gross profit @ 1% of total sales. From such estimated gross profit, AO allowed further deduction of Rs. 2,65,44,596 on account of expenditure, depreciation etc. and ultimately determined the total income at Rs. 3,83,36,064 in the assessment order passed on 30/12/2011. Being aggrieve....
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....,495 was added back and depreciation of Rs. 7,35,579 was only allowed. Further, an expenditure of Rs. 3,09,824 was disallowed u/s 40(a)(ia) of the Act. Hence, the actual expenditure allowed was Rs. 2,65,44,596. When the books of account were rejected and income was estimated on gross receipts, that itself takes care of all expenditure under the provisions of the IT Act. Therefore, allowing of expenditure of Rs. 2,65,44,596 separately is not in order." In response to the show cause notice, assessee appeared before ld. CIT and made elaborate submissions challenging not only the jurisdiction invoked u/s 263, but, also the issue on merit. The specific plea taken by assessee before ld. CIT was assessment order passed having merged with the ord....
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....s. 5. We have heard the parties and perused the materials on record. Ld. AR's submission precisely, is the issue of estimation of profit being subject matter of appeal before ld. CIT(A) and having been considered and decided by ld. CIT(A), exercise of jurisdiction u/s 263 is contrary to the statutory mandate as provided in Explanation (c) to section 263(1) of the Act. Ld. AR submitted, in fact, while considering the appeals preferred by assessee as well as revenue against the order of ld. CIT(A), ITAT has remitted the matter back to the file of AO with a direction to examine assessee's books of account and other documents and thereafter decide the issue. Thus, it was submitted by ld. AR, since there is no assessment order in existence as o....