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TMI Blog2016 (11) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order of the AO and restore the entire assessment proceedings to the file of AO to examine assessee’s contentions in detail a In case of rejection of books of account, however, we make it clear that any estimation of income should not exceed 5% as determined by the Pr.CIT/or admitted by assessee in the course of survey. Consequently, the direction to initiate penalty proceedings also stands modified. AO is free to consider whether to initiate penalty proceedings or not on the basis of examination of assessee’s business affairs. He is directed to pass a detailed order so that there will be no confusion, as arising in this case on the impugned assessment order. Assesse should be given due opportunity in the consequential assessment proceedings. With these directions, while upholding initiation of proceedings on 263, the grounds of assessee are partly allowed. - I.T.A. No. 457/HYD/2016 - - - Dated:- 21-10-2016 - Smt. P. Madhavi Devi, Judicial Member And Shri B. Ramakotaiah, Accountant Member For Assessee : Shri V. Siva Kumar, AR For Revenue : Smt. G. Aparna Rao, CIT-DR ORDER Per B. Ramakotaiah, A. M. This is an appeal by assessee against the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary value and any admission made during such statement cannot be made a basis for addition. The contentions raised by assessee were considered by the Ld.CIT and after extracting the statement given by the partner in the course of survey, Ld. Pr.CIT set aside the assessment with a direction to revise the total income by adopting 5% of the gross contract receipts. He also directed the AO to initiate the penalty proceedings u/s. 271(1)(c). His orders in para 6, 7 8 are as under: 06. A perusal of the written statements filed by the assessee firm for the A.Ys 2011-12 and 2012-13 reveals that the assessee has disclosed net total incomes of ₹ 73,44,370/- on gross receipts of ₹ 14,68,87,443/- for AY 2011-12 and ₹ 83,39,680/- on-total gross receipts of ₹ 16,67,93,605/- for AY 2012-13 which are at 5% of the gross bills. Thus it is evident from record that the assesse has acted on the admission made by it during the course of survey u/s 133A and in the sworn statement recorded u/s 131 of the Act immediately thereafter, by filing its returns for AY 2011-12 and 2012-13 disclosing its net income at 5% of the gross transport receipts. Only when it came to AY 2013-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transport receipts in the statement recorded during the course of survey, but also confirmed the admission in the sworn statement recorded from the same partner u/s 131 immediately thereafter in which the deponent has clearly recorded his assertion that the sworn statement was recorded as per his version and without any coercion or pressure. The assessee at no stage of assessment proceedings has ever retracted from his admission statement. In fact the assessee has further acted in accordance with its admission by filing the returns of income for AYs 2011-12 and 2012-13 by disclosing additional income so that the net income offered was 5% of the respective gross transport receipts. Even in the course of assessment for the AY 2013-14, the assessee tried to mislead the Assessing Officer by stating that they have returned the income as per their admission made during the course of survey and exhorted him to accept the returned income. The Assessing officer has simply acceded to its request without any verification and passed the impugned Assessment Order by recording the wrong fact of returned income being at the rate at which admission was made. The assessee also cannot accept a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival contentions and perused the documents placed on record. Admittedly, during the course of survey operations, assessee in fact offered income at 5% of the gross receipts as it has not maintained proper books of account. Not only that, assessee also followed it up by filing the returns for AY. 2011-12 and 2012-13 offering incomes at 5% of the gross receipts which were accepted by the department. Therefore, assessee s contention that statement given during the survey does not have any evidentiary value has no basis. For the reasons best known to the Managing Partner, assessee not only agreed for estimation of income during the course of survey u/s 133A but also filed returns accordingly. However, for AY. 2013-14, as seen from the statement of survey only a turnover of ₹ 5.25 Crores was made as on the date of survey i.e., 07-11-2012 and subsequently, there was more than ₹ 8 Crores of turnover to make it to ₹ 14.75 Crores for the whole year. Assessee may have maintained books of account for the whole period and also filed audited statements along with the return of income. However, AO s order indicates that there are certain deficiencies noticed. This is what the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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