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TMI Blog2014 (1) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... r These are two appeals filed by the revenue against the order of Ld CIT(A) both dated 5.6.2012. The revenue has taken similar grounds in both the appeals except the difference in amount. The main grievance of revenue in these two appeals is that Ld CIT(A) has not correctly interpreted the provisions of section 153C read with section 153A of the Income Tax Act, 1961. 2. The brief facts of the case are that during search and seizure action u/s 132 of the IT Act carried out at Gopal Zarda group of companies on 15.1.2009, certain documents belonging to the assessee company were found and seized. Accordingly, after recording reasons notices u/s 153C read with section 153A of the Act dated 13.9.2010 were issued requiring the assessee firm to file return of income within 16 days of service of notice. As per assessment order, the assessee failed to file return of income within stipulated period and therefore a notice u/s 142(1) dated 5.10.2010 along with questionnaire were issued requiring the assessee to file return of income along with in other details. In response to these notices, the assessee filed letter dated 25th October, 2010 stating therein that return of income filed origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at appellant company has been maintaining proper books of accounts as required by law and is also maintaing proper stock registers as the provisions of Central Excise Act, 1944 were applicable to the assessee. d) That Assessing Officer has rejected the books of accounts and book results of the appellant company and has estimated sales of Rs.4 crores and Rs.5 crores respectively and applied gross profit of 36.20/- as per audited accounts of the appellant and therefore the Assessing Officer took contradictory stand as on the one hand, he rejected the books of accounts and book results and on the other hand himself treated gross profit of such rejected books of accounts as correct. e) That Assessing Officer neither afforded any opportunity to the appellant nor confronted the material gathered by him to the appellant during course of assessment proceedings. f) That Assessing Officer failed to bring any material on record, the evidences which were seized from the premises of Gopal Zarda group which prompted him to estimate the sale at Rs.4 crores and Rs.5 crores respectively by rejecting the actual sale. g) That Assessing Officer erred both in fact and in law initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 153C of the IT Act to assess or reassess case of the assessee for six assessment years. It has also been submitted that the AO has not even mentioned the date on which the satisfaction was recorded, which proved beyond doubt that the said satisfaction was not recorded before initiation of proceedings U/S 153C, as the AO failed to provide copy of the same even though specific request was made by the appellant for the same, on receipt of notice U/S 153C by the assessee. I have carefully gone through the satisfaction note recorded in the case of "Gopal Zarda Group" by the AO. While the same is undated, this fact in itself does not lead to the conclusion that this satisfaction note has been recorded at a date which is after the date on which notice U/S 153C was issued in the case of the appellant. Similar is the position with the "satisfaction note" in case of the appellant, in which reference to the various annexures which includes Balance Sheet, P L Account and Audited Accounts of the appellant company has been made. In view of the above facts all these documents, even while belonging to the appellant, are apparently reflecting it's audited accounts based on which the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. That the assessee has been maintaining proper books of accounts including stock register as per the provision of Central Excise Act, 1944. It has also been argued that section 144 of the IT Act prescribes that an opportunity of being heard (before making assessment to the total income to the best of his judgment by the AO) has to be given which has not been complied with in the facts of the case. The appellant has also relied on several Court decisions which are essentially to the effect that audited books of accounts should be relied and should not be rejected unless there is positive material with the AO in respect of incorrectness and incompleteness of the same. The appellant has finally summed up his submission in para 1.36 of his submission dated 23.04.2012 and concluded that the AO has erred both in fact and in law in making addition by estimating income on estimated sales without bringing in any material on record to substantiate that sales are not fully accounted for in the books of accounts and therefore it has been requested that the addition of Rs.36,80,000/- is liable to be deleted. Similar findings were made by ld CIT(A) in respect of assessment year 2007-08. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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