9911796707
TMI Blog2015 (11) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... t rolled coils. A search and seizure action under section 132 of the Income Tax Act, 1961 ( in short 'the Act') was conducted in the group of concerns on 30/11/2010. For the assessment year 2011-12, the assessee filed the return of income on29/9/2011 declaring loss of Rs. 10,98,47,11,129/-. The assessee subsequently filed revised return of income on 29/3/2012 declaring loss of Rs. 10,90,99,86,534/- and again on 28/9/2012 declaring loss of Rs. 11,07,08,83,371/-, which included unabsorbed depreciation of Rs. 5,04,44,93,834/- and business loss of Rs. 6,00,63,89,537/-. The assessment was completed under section 143(3) of the Act vide order dated 28/2/2013, wherein the income of the assessee was estimated at Rs. 91,00,00,000/-(net of losses) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness loss and depreciation of earlier years & apply the relevant provisions of the Act for the purpose determining the correct figure of loss." 3. The Appellant craves to leave to add, to amend and/or to alter any of the grounds of appeal, if need be. 4. The appellant, therefore, prays that on the grounds stated above, the order of the CIT(A)-39, Mumbai may be set aside and that of the Assessing Officer be restored." 4. The grounds raised at Sl.Nos. 3 & 4 are general in nature and, therefore, no adjudication is called for thereon. 5. Ground No.1 - Estimation of Income at Rs. 91.00 crores 5.1 In this ground Revenue contends that the Ld. CIT(A) erred in disallowing the addition on account of estimation of income of Rs. 91.00 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return of income. 5.3.1 We have heard the rival contentions and perused the material on record. According to the Assessing Officer, in view of the fact that (i) the assessee paid advance tax of Rs. 29.90 crores in March, 2011 and subsequently declared loss of Rs. 11,07,08,83,371/-, the book results of the assessee were not reliable and the other discrepancies such (ii) erratic yield from sponge iron plant;(iii) difference in commission declared in return of income vis-à-vis details given to service tax authorities;(iv) power and fuel consumption vis-à-vis total turnover; (v) comparison of G.P. rates of the assessee with other companies, etc. called for rejection of the assessee's books of account and estimation of income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate the income solely on the basis of the advance tax remitted. It is to be agreed that in the present case,no suppression of receipts have been pointed out.Though certainly the advance tax is an indication of the taxable profits of the company, the estimation made for the purpose of advance tax is at best only an estimate and cannot partake of the character of total taxable income of a given year. The fact that in this case there was a search action and that a declaration was made cannot be lost sight of. When a declaration is made consequent to a search, taxes commensurate with the declaration have to be remitted. This argument raised by the appellant, on the facts of this case, cannot be lost sight of. 9.4 Apart from pointing out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per provisions of law advance tax is pre-assessment collection of taxes which is to be later adjusted towards the income tax levied on the total income as finally determined. An estimate by its very nature has an element of guess work and hence prone to be inaccurate. For the said reasons, it has to be held that the payment of taxes cannot be a basis for estimation of income. Therefore, I am unable to sustain the action of the A.O. in assessing the total income at Rs. 91 Crs. also ignoring the accumulated losses as determined in the earlier years as per returns of income filed." 5.3.2 Before us, Revenue has failed to contravene the finding of the Ld. CIT(A) in the impugned order that the Assessing Officer's estimation of the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's claim in this regard is factually incorrect. The Ld. CIT(A), in fact, has observed at para 9.4 of the impugned order that since the Assessing Officer had rejected the assessee's books of account summarily , he would not have examined the assessee's claim for carry forward and set off of business losses and unabsorbed losses of earlier years and, therefore, directed the Assessing Officer to examine the assessee's claim in accordance with law and also to dispose off the pending rectification applications, if any, in this regard. The Ld. AR of the assessee drew the attention of the Bench to the order giving effect to the impugned order of the Ld. CIT(A) dated 31/03/2014 placed at page 85 and 86 of the assessee's Paper Book, wherein the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
