TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 1411
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....ions conducted in assessee's case on 12-12-2005, proceedings u/s. 153A of the Income Tax Act [Act] were initiated for this year. Assessee has shown sales in the original return at Rs. 5.61 Crores and has revised the sales to Rs. 8,58,96,664/- in the proceedings u/s. 153A. Assessee has originally offered income at Rs. 13,42,435/- and in the return u/s. 153A, income was offered at 1,29,16,404/-. In the proceedings u/s. 153A, the Assessing Officer (AO) determined the income at Rs. 3,10,46,622/- by the order dt. 31-12-2007. On appeal, the CIT(A) directed the AO to estimate the profit rejecting the book results. On further appeal by assessee as well as department, ITAT, Visakhapatnam vide order dt. 24-01- 2011, set aside the assessment with a di....
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....in the first round and ITAT has set aside the issue to the file of AO to consider it afresh. However, the Co-ordinate Bench in the case(s) of RK Township Promoters Pvt. Ltd., (dt. 29- 04-2016) has examined the Special Audit Report in that case and other aspects and decided the issue as under: "13.2 There is no doubt that the book keeping adopted by the assessee was complex and the relevant data generated by the assessee based on Bills and Vouchers were not available with the assessee and part of the documents were seized by the department, which was used by the special auditor to recast the P&L A/c. The degree of reliance and reliability of information adopted by the special auditor is the main grounds of appeal by the assessee. Th....
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....essee and net income determined by the AO, CIT(A), special auditor and estimated profit @ 15% in the subsequent year by this coordinate bench. We cannot adopt 15% of sales simply because the coordinate bench treated the business of the assessee as civil contract business and the same was not controverted by the assessee. But from the records submitted before us by both assessee & DR as the business of assessee is in real estate dealing only in buying, developing and selling lands. 13.5 The relevant data before us are (extracted from paper book Submitted by the assessee) Cumulative figures a) Cumulative turnover for 7 AYs (As per special audit report accepted by the assessee) 100.61 crores b) Income assessed by ACIT 21.2....
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....aised by the assessee. Hence, there cannot be any incremental profit arrived by CIT(A). Hence, the profit arrived after consequential to CIT(A)'s order cannot be relied. 13.6 We are left with income computed by special auditor at 9.65%. But this income arrived by special auditor by adopting presumptions and modifying the values of purchase, sales, opening and closing stock. Based on the submissions of DR and assessee, we are of the view that the reliability of the special audit could be in between 80- 85%. On applying the reliability factor to the income determined by special auditor of 9.65%, we will end up arriving the income at 8%, which is similar to section 44AD. 13.7 On the other hand, the provisions of section 44AD ....
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....toring the reliability and the income computed by the special auditor. Hence, we direct the AO to adopt 8% of the sales as determined by the special auditor, to compute the income of the assessee year to year basis for AY 2000-01 to 2006-07". 5.1. Considering the above, we are of the opinion that the income can be determined in this case also at 8% on the gross sales shown by assessee at Rs. 8,58,96,664/-. In case the income so estimated is less than the returned income of Rs. 1,29,16,404/-, AO is directed to accept the income returned. Since the income is estimated at net basis, considering the facts of the case, no further deduction under depreciation and interest should be allowed on the estimated income. AO is directed to do accordin....