AKSHAY MERCHANTILE P LTD,CHENNAI vs. DCIT CORPORATE CIRCLE-2(1), CHENNAI

5. The Learned CIT(A) further erred in confirming the rental income estimated by the AO amounting to Rs.15,00,000/- as against the returned income of Rs.18,72,013.50 on this account.

6. The Learned CIT(A) ought to have appreciated that Block Assessment has yet not reached the finality and appellant company's appeal is pending before ITAT as on date, moreover he has failed to take in to consideration the order passed by CIT(A)-18 on 27-06- 2019 this regard in ITA No.423/2015-16.

1.3 The Ld. AR advanced arguments supporting the case of the assessee whereas Ld. CIT-DR has supported the findings given by lower authorities. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. Proceedings before lower authorities 2.1 The assessment has been framed on best judgment basis for want of details for the assessee. It transpired that the assessee deposited cash of Rs.3.43 Lacs in the bank account. In the absence of any satisfactory response forthcoming form the assessee to establish the source thereof, the same was added as unexplained cash credit. The assessee advanced loans of Rs.1.62 Crores during FY 2003-04 and earned interest. In this year, the assessee did not provide any details. The Ld. AO estimated interest income @24% on advances of Rs.2 Crores and made addition of Rs.48 Lacs. The rental income was similarly estimated at Rs.15 Lacs. In block assessment order dated 23- 12-2005, an amount of Rs.279.80 Lacs was treated as undisclosed investment. The Ld. AO estimated interest on the same @24% and made addition of Rs.67.15 Lacs. Another similar addition of advances was made for Rs.267.70 Lacs. The Ld. AO estimated interest on the same @24% and made addition of Rs.64.24 Lacs. 2.2 During appellate proceedings, the submissions of the assessee were subjected to remand proceedings and Ld. AO furnished remand report on 09-07-2014. It transpired that the assessee had filed return of income on 24-02-2010. However, the same was held to be invalid return and therefore, not considered by Ld. AO. 2.3 Considering the remand report, Ld. CIT(A) upheld addition of cash deposit, addition of estimated interest income of Rs.48 Lacs and estimated rental income of Rs.15 Lacs. The other two additions were sustained to the extent of Rs.10.75 Lacs and Rs.11.50 Lacs by adopting interest rate of 24% considering the fresh assessment framed by Ld. AO pursuant to the directions of the Tribunal. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 3. It emerges that the assessee has furnished return of income which was treated as invalid return. However, in our opinion, the data contained therein could be used to compute the income of the assessee.

It is quite apparent that all the additions are on estimated basis and not supported by actual facts / figures. It also emerges that the quantum in block assessment has undergone substantial change in second round of litigation due to appellate proceedings. Therefore, we set aside the orders of lower authorities and restore the assessment back to the file of Ld. AO with a direction to the assessee to substantiate its income. The return of income as filed by the assessee as well as the outcome of second round of litigation shall duly be considered by Ld. AO. No other ground has been urged in the appeal.