TaxTMI 
TaxTMI 
2017 (1) TMI 1252
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....pecial audit was an illegal one as the A.O had not given an opportunity of hearing to the assessee as required under proviso to section 142(2A) and consequently, the asst. order passed is barred by limitation. 2.1] The learned CIT(A) further failed to appreciate that the reference to special auditor was invalid in law and therefore, the asst. order passed was time barred. 2.2] The learned CIT(A) erred in holding that the learned A.O. had given proper opportunity to the appellant before making a reference for special audit and hence, the contention of the assessee that the reference made was illegal is not correct. 2.3] The learned CIT(A) further erred in holding that even if, no opportunity was given by the learned A.O. to the appellant before making a reference for special audit, such an Act would not result in the asst. order being null and void without appreciating that it would result in nullity and hence, the asst. order was invalid in law. 2.4] The learned CIT(A) further erred in holding that the A.O. did not commit any irregularity in passing the order extending the time limit for completion of special audit after the expiry of the initial period and hence, the a....
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.... undisclosed income on the basis of the diaries in the hands of the assessee company. 4] The learned CIT(A) erred in holding that the claim of the assessee that the income be computed by applying a net profit rate of 15% on the total credits was not the correct method for determining the undisclosed income and the method adopted by the learned A.O. was the correct one. 4.1] The learned CIT(A) failed to appreciate that the income was offered to tax by estimating the net profit @ 15% on total sales which was more than reasonable and hence, there was no reason to make any further addition over and above the income offered. 4.2] The learned CIT(A) erred in holding that the methodology adopted by the learned A.O. of determining the income on asset basis or income basis was correct and the higher income out of the two methods should have been considered as an undisclosed income of the assessee company. 5] The learned CIT(A) erred in confirming the disallowance of the following expenses while computing the income on income method - a. Disallowance u/s 40A(3) Rs.59,15,661/- b. Disallowance of construction expenses Rs. 3,42,146/- 6] The learned CIT....
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....ding Rs. 20000/- should have been deleted. 7] The learned CIT(A) erred in holding that the construction expenses of Rs. 3,42,146/- recorded in the seized diaries were not allowable as a deduction while computing the income on income method without appreciating that such expenses indicated genuine business expenditure and there was no reason to disallow the said amount. 8] The learned CIT(A) erred in confirming that the assessee had withdrawn amounts for investments amounting to Rs. 16,42,200/- and hence, the same were investments while computing the income on asset method without appreciating that some of the expenses considered therein were genuine business expenses and the same ought to have been reduced. 9] The learned CIT(A) erred in holding that the construction expenses of Rs. 8,97,731/- recorded in the seized diaries were investments while computing the income on asset method without appreciating that such expenses indicated genuine business expenditure and there was no reason to consider the same as investments. 10] The learned CIT(A) erred in passing the order without appreciating the correct facts of the case. 4. The Revenue in ITA No. 450/PN/2013 has raise....
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....onsidering the books of accounts maintained by the assessee and this nothing to do with material seized during the course of search. 7. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing netting off of debit suspense entries with the credit suspense entries without appreciating the fact that the assessee did not reconcile the same during assessment. 8. The appellant prays that the Order of the learned CIT(A) be vacated and that of the AO's be restored. 5. The learned Authorized Representative for the assessee at the outset pointed out that the assessment in the case was made pursuant to search proceedings under section 132 of the Act conducted on 23.08.2006. He further pointed out that the instant assessment year was the year of search and assessment was completed under section 143(3) of the Act. He referred to the provisions of section 153B(1)(a) of the Act and pointed out that for earlier six years before the search, period of 21 months from the end of the financial year in which last authorization of search was executed, is provided for completing assessment. Since the search was dated 23.08.2006, where the financial year ends ....
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....r in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed: ......." 8. As per clause (a) to section 153B(1) of the Act, the time limit for completion of assessment for search cases is provided. As per clause (a), in respect of each of the assessment year falling within six assessment years prior to the year of search, the assessment had to be completed within period of 21 months from the end of financial year in which the last of the authorization for search under section 132 of the Act or for requisition under section 132A of the Act was execut ed. Clause (b) deals with assessment proceedings relating to search year i.e. the year in which the search was conducted under section 132 of the Act or requisition was made under section 132A of the Act and it is provided that assessment has to be completed within period of 21 months from the end of financial year in which the last of the authorization for search under section 132 of the Act or requisition under section 132A of the Act. So, for both the limbs i.e. for assessment years falling within period of six assessment years under section 153A of the Act and f....