9911796707
TMI Blog2013 (2) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate of GP rate at 23% ignoring the assessee's submissions and other comparable cases in the same line of business. d) In upholding the disallowance of expenses of Profit & Loss Account nature which are normally incurred and some of which were payments to Govt. and semi Govt. organizations say sales tax, electricity charges etc. 2. That the assessee craves permission to raise, amend or add any ground of appeal at the time of hearing. 3. Ground No.1 raised by the assessee is marked under various segments from (a) to (d), whereby the assessee contended that CIT(A)-II Ludhiana erred in upholding the estimate of sales for each assessment year falling within the block period by not appreciating the assessee's submissions, duly supported by entries in the assessee's documents and case laws. The assessee also challenged the upholding of estimate of GP rate at 23% ignoring the assessee's submissions. Further, the assessee challenged upholding of the disallowance of expenses of Profit & Loss Account nature which are normally incurred. 4. Ld. 'AR' did not press Ground No. 1 (a) and hence, the same is dismissed as not pressed. 5. In the course of present appellate proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 158BC(b) clearly reveals that the provisions of Section 145 read with Section 144 are applicable while framing block assessment u/s 158BC(b) of the Act. The relevant part of the provision is reproduced hereunder : "158BC(b)-" The AO shall proceed to determine the undisclosed income of the block period in the manner laid down in Section 158BB and the provisions of Section 142, sub-sections (2) and (3) of Section 143 (Section 144 and Section 145) shall, so far as may be, apply;" 7. Having regard to the submissions made by the assessee and on a careful perusal and consideration of the relevant provisions of the Act, findings of the ld. CIT(A) and the findings of the AO, we are of the considered opinion that there is a specific provision u/s 158BC , which confers jurisdiction on the AO to invoke the provisions of Section 145 as also Section 144 of the Act. Thus, AO is competent to make estimate based on the incriminating documents. 8. Provisions of Section 158BC(b) particularly insertion of Section 144 was made by the legislature vide Finance Act 2002 w.e. f. 01.07.1995. Having regard to the fact situation of the present case, the AO has extensively placed reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed accounts for the above period, estimated sales for the block period and made additions towards undisclosed income for assessment years 1997- 98 to 2003-04 (upto 26th Nov. ,2002) falling in the block period-Not justified-Block assessment has to be framed on the basis of seized material which in this case is sales particulars relating to 22 days i.e. 10th Oct. ,2002 to 3rd Nov. ,2002-No other material or asset details were found during the course of search- In the formula adopted by the AO there is no question of best judgment as the assessee has already disclosed income from unaccounted sales- In the statements of assessee recorded during search, there was no incriminating material which could be termed as evidence on the basis of which the undisclosed income could be computed- If any material is collected by the revenue consequent to the search which is not relating to the period in question, that may not give authority to the Department to make the computation of undisclosed income on estimation basis under s. 158BB or assessment unders. 158BC especially when the income relating to unaccounted sales had already been disclosed to the Department-Assessee having already disclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of seized material. Accordingly, the reliance placed by the assessee is misplaced. 12. Ld. 'DR' placed reliance on the order passed by the lower authorities. 13. We have carefully perused the facts of the case, rival submissions and the case laws cited by the assessee. Ld. 'AR' contended that net profit should be applied which ranges between 1.76% to 6.9%, in respect of assessment years falling in the block period disclosed by the assessee in the original returns. Ld. 'AR' also placed reliance on the comparable case in the case of M/s Preetpal Singh, BKO and M/s Amrik Singh, BKO. The comparable cases relied upon by the assessee are not applicable to the facts of the present case, as in such cases, assessment was framed u/s 143(3) based on the basis of regular books of account. There was no search operation conducted in such cases. In the present case, the AO had framed assessment on the strength of seized incriminating documents which contained sales outside the regular books of account and other relevant details. 14. It is settled proposition of law that like must be like with like, for the purpose of drawing meaningful, rational and legally tenable conclusions. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the fact situation of the present case and the analysis of incriminating seized documents and case laws relied upon by the assessee, we deem it fair and reasonable to apply net profit rate at 7.85% for the purpose of determination of the undisclosed income for the block period. Therefore, these grounds of appeal raised by the assessee are adjudicated in the above terms. The AO is directed to apply NP at 7.85% for the purpose of computation of undisclosed income of block period. The facts of the present case are very special in view of the factum of the pragmatic examination of the seized material by both the AO and the assessee, leading to almost similar result in the matter of working out the sale of bricks. Therefore, the decision of the Bench is based on such special facts of the present case and we would like to state in clear terms that this decision is confined to the facts of this case and may not be treated as an authority on aspects, which have been decided therein, for general application. 17. Ground No. 2 raised by the assessee is general in nature and need no separate adjudication. 18. In the result, appeal of the assessee is allowed for statistical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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