9911796707
TMI Blog2015 (10) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... d the income on estimation basis in respect of Mumbai as well as Bengaluru office, but the ld. CIT(A) has observed that so far as the Mumbai office was concerned, properly audited accounts were submitted by the assessee, hence he did not sustain the estimation of Mumbai office. Since no accounts were produced in respect of Bengaluru office, the ld. CIT(A) confirmed the profit/income worked out by the A.O. The ld. Counsel for the assessee could not bring anything before us as to how the estimation of income made by the A.O. in respect of Bengaluru office was wrong. Under these facts and circumstances of the case, we do not find any infirmity in the impugned order of the ld. CIT(A) in sustaining the addition made by the A.O. in respect of Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years 2007-08 and 2008-09 are directed against two separate orders passed by the ld. CIT(A)-9 both dated 26-03-2012 and since common issue is involved therein, the same have been heard together and are being disposed of by this single consolidated order for the sake of convenience. 2. First, we shall take up the cross appeals filed for A.Y. 2007-08 which are directed against the order of ld. CIT(A)-9, Mumbai dated 26-03-2012. 3. The relevant facts of the case giving rise to these appeals are as follows. The assessee is a company engaged in the business of providing/supplying air/water purification systems. The return of income for the year under consideration was filed by it on 19-02-2009 declaring total income at 'nil'. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve assessment considering the loss as Nil may be made for AY 2007-08. The assessee also submitted that profit of Bengaluru branch be estimated considering the Gross Profit ratio at 35% and administration of other expenses at 29%. The AO after considering the facts and circumstances of the case adopted rate at 40% against 35% declared by the assessee and allowed administration and other expenses at 20% against the claim of 29% made by the assessee. He, therefore, determined net profit at ₹ 27,16,334/- as against profit estimated at ₹ 4,07,450/-. The AO accordingly held that both Head Office's income and branch income have to be assessed together as per the provisions of IT Act and assessed total income at ₹ 66,77,547/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 450/-. However, with regard to the Mumbai office account, the ld. CIT(A) held that similar estimation could not be made rejecting the accounts of Mumbai Branch which have been thoroughly prepared and properly audited by the auditor. Moreover, no fault has been found by the AO with regard to profit and loss account of Mumbai branch. Therefore, the estimation made by the AO with regard to Mumbai Head Office branch was not based on any material evidences. He held that the AO had not pointed out any mistake in the profit and loss account of Mumbai branch, and hence under the circumstances, the estimation made for Mumbai branch was not sustainable. Aggrieved by the orders of the ld. CIT(A), both assessee and Revenue are in appeal before the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the assessee has failed to submit the audited accounts in relation to Bengaluru branch office, the gross profit estimated by the A.O. was quite accurate. 7. We have heard the rival contentions and also perused the relevant material available on record. It is observed that there was a dispute between the directors of Mumbai office and Bengaluru branch office which resulted in appointment of Arbitrator and the copy of Arbitration award placed on record. It is further observed that the income in respect of Bengaluru office has been assessed in the hands of the company itself and not in the name of the director. The Revenue is not concerned with the internal dispute between the directors. A perusal of the assessment order shows that eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. Counsel for the assessee could not bring anything before us as to how the estimation of income made by the A.O. in respect of Bengaluru office was wrong. Under these facts and circumstances of the case, we do not find any infirmity in the impugned order of the ld. CIT(A) in sustaining the addition made by the A.O. in respect of Bengaluru office. The appeals filed by the assessee in respect of both the years are dismissed. 8. In its cross appeals, the Revenue has agitated the findings of the ld. CIT(A) that no estimation in respect of Mumbai office could be made by submitting that the books of account of the assessee were rejected in its entirety by the A.O. by invoking the provisions of section 145(3) of the Act. In this regard, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
