TaxTMI 
TaxTMI 
2014 (1) TMI 1925
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....ts and no evidence or document found having been found in search suggesting that appellant has erred more income than discovered in course of search and seized documents and thereby making an addition of Rs.23,56,877/- as profit alleged to have been earned @35% of turnover disclosed which rate is based on subsequent years rate of profit earned by assessee. (b) That the CIT(A), C-I has, likewise further erred in not considering the claim of expenses made to earn income on the ground that account are not audited which is contrary to the facts. (c) That C.I.T.(A),C-I has likewise further erred in confirming addition of Rs.28,930/- vide ground No.3 before him." In the assessment years 2005-06, 2006-07, 2007-08 and 2008-09, in ground no. 1(a), the figures of Rs.31,09,550/-, 29,32,967/-, Rs.27,11,014 and Rs.27,30,191/- be read in place of Rs.26,53,877/- respectively. Similarly, in ground no.2, in place of Rs.28,930/-, Rs.50,937/-, 30,256/-, Rs.39,566/- and Rs.18,018/- be read respectively for the assessment years 2005-06, 2006-07, 2007-08 and 2008-09. 2. The assessee has also taken the following common additional ground in each of the assessment year of the appeal....
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....ted above Total suppressions 2004-05 6,791/- ------ Rs. 6,791/- 2005-06 6,12,920/- ------ Rs. 6,12,920/- 2006-07 13,34,655/- ------ Rs. 13,34,655/- 2007-08 11,44,288/- Rs. 3,72,823/- Rs. 15,17,111/- 2008-09 24,57,024/- Rs. 5,36,383/- Rs. 29,93,407/- 2009-10 37,30,307/- Rs.43,51,693/- Rs. 80,82,000/- Total 92,85,985/- Rs.52,60,899/- Rs.1,45,46,884/- The AO noted that in each of the assessment year, the assessee has shown, as per the profit & loss a/c. and computation of the income, the following turnover and loss Assessment Year (s) Turnover (Rs.) Loss (Rs.) 2004-05 67,33,935/- 9,05,251/- 2005-06 88,84,429/- 1,86,732/- 2006-07 83,79,905/- 1,58,228/- 2007-08 77,45,754/- 6,63,006/- 2008-09 78,00,546/- 2,10,546/- In each of the assessment year, the AO noted that the turnover of the assessee exceeds Rs.40 lakhs and therefore, tax audit was compulsory. Even after giving opportunity to the assessee, the assessee did not produce the books of accounts. The AO, therefore, invoked the provisions of section 145(3....
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....nterprise may earn the income. The AO estimated the income on the basis of the profit earned by the assessee in the subsequent year. The ld. D.R., on the other hand, relied on the orders of the tax authorities below. 7. We heard the rival submissions and carefully considered the same. We noted that in the case of the assessee, a search had taken place on 02.12.2009. Therefore, in the case of the assessee, the assessment has to be made as per the provisions given under section 153A. The decision as has been relied on by the ld. A.R. is not applicable in the case of the assessee. We have gone through both the decisions i.e. CIT-vs- Dr.Ratan Kumar Singh (supra) and that of CIT-vs- R.N.Mehrotra (supra). Both these decisions relate to the block assessment i.e. in respect of assessment to be made under Chapter XIVB. The provisions of Chapter XIVB were applicable where the search is initiated after 30.06.95 but before 31st day of May, 2003. The provisions of section 158BI are apparently clear. It states that the provisions of the Chapter shall not apply where a search is initiated under section 132, books of account, other documents or any assets are requisitioned under section 132A af....
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....9. Now coming to the additional ground taken by the assessee, the ld. AR before us contended that the assessee has to be allowed depreciation on fixed assets. In this regard, attention was drawn towards the Circular of the department dated 31.08.1965, para 2 of which stipulates as under: "2. The Board consider that where it is proposed to estimate the profit and the prescribed particulars have been furnished by the assessee, the depreciation allowance should be separately worked out. In all such cases, the gross profit should be estimated and the deductions and allowances including the depreciation allowance should be separately deducted from the gross profit. If it is considered that the net profit should be estimated it should be estimated subject to the allowance for depreciation and the depreciation allowance should be deducted therefrom." Thus, it was contended that the AO be directed to allow depreciation to the assessee while estimating the income. 10. The ld. DR, on the other hand, relied on the orders of the tax authorities below. 11. We heard the rival submissions and carefully considered the same. We noted that the AO, after rejecting the books under se....