TaxTMI 
TaxTMI 
2021 (10) TMI 344
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....A) erred in not appreciating that the proceedings initiated u/s 147/148 by Ld. A.O. are invalid and illegal as the vague reasons recorded do not reflect any independent application of mind on the part of the assessing officer, so as to form a reason to believe that income has escaped assessment. Further corroborate from the fact that, Firstly, no basis is available, as to how figure of Rs. 1.10 Crore has been arrived in the reasons mentioned, whereas assessment framed on Rs. 1,24,84,178/-. Secondly, After reopening Ld. A.O. gathered the basic information of contracts awarded to the assessee during the tenure of Mr. Yadav Singh vide letter .dated 19/12/2016 issued u/s 133(6) of I.T. Act just few days before the finalisation of assessment,....
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....issue of notice u/s 145(2) after due application of mind, and accordingly, order passed by Ld. A.O. and CIT(A) is void-ab-initio. 6. That Ld. A.O. erred in assuming jurisdiction u/s 143(2) of the Act without valid issue of notice u/s 143(2) after due application of mind, and accordingly, order passed by Ld. Assessing Officer. And CIT(A) is voi-ab-initio. 7. That Ld. A.O. has erred in passing order u/s 147/148, without formally supplying the reasons recorded as per Supreme court decision in the case of GKN Driveshats (India) Ltd. vs. ITO 259 ITR19 (SC), before completion of assessment proceedings, even mandatory approval u/s 151 referred is never supplied to the assessee, assessment order dated 31/12/2016 is passed after time barring d....
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....pened u/s 147 of the Income Tax Act, 1961 vide issue of notice dated 03.09.2015 on the grounds that the assessee paid commission @ 5% on the contracts awarded by the authorities. 4. During the course of assessment proceedings, the Assessing Officer directed the assessee to produce books of accounts for verification. Further, notice u/s 133(6) of the Act was issued to CEO, NOIDA calling for information of contracts awarded by the NOIDA during the financial year 2011-12 for which the NOIDA replied that the assessee has been awarded contracts to the tune of Rs. 24.96 crores. During the assessment proceedings, the AO asked the assessee to produce details of purchases, labour expenses , wages, freight expenses along with requisite bills, vouche....
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.... for which, assessee has failed to produce original bills/vouchers for verification. Under the prevailing circumstances as the assessee cannot substantiate the above discrepancy, it cannot be denied that the assessee had diverted the funds for paying commissions in the guise of various expenses shown in the books, majority of which has been incurred in cash. Moreover, in the absence of proper bills/vouchers/documentary evidences, the source of cash payments remained unconfirmed. Hence, it is not possible to vouch the source of commission paid by the assessee @ 5% of contract work awarded in the tenure of Sh. Yadav Singh. As already discussed above, total work contract is Rs. 24,96,83,556/-. Hence, 5% of Rs. 24,96,83,556/- worked out to be R....
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....f estimation of profits @8% d. The net profit disclosed by the assessee was 6.77% 10. At the outset, we find that while the show-cause has been issued for determination of profits @8%, the disallowance has been made @5% on the contracts of Rs. 24.96 crores. In addition to the net profits disclosed, the Assessing Officer has disallowed 5% of the expenses on the total contract work awarded by NOIDA. The AO also held that the application of 8% on the turnover appears to be excessive. While doing so, the Assessing Officer has held that payments exceeding Rs. 20,000/- were made to a single party and the assessee has willfully bifurcated the payments to keep it within the threshold limit. Beyond this, the Assessing Officer has not brought anyt....