2013 (9) TMI 809

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.... the department on following substantial questions of law:- 1. Whether the ITAT erred in law in giving relief to the Assessee on basis of doctrine of "res-judicata", which is not applicable in tax proceeding. 2. Whether the ITAT has erred in law in deleting the addition of Rs.31,05,967/- on account of alleged income and unaccounted expenses and investment, ignoring the fact that assessee society was not maintaining books of account in regular course of business and for the same reason it was not entitled for exemption u/s 10 (23C) of the Act, 1961. 3. Whether the ITAT has erred in law in deleting the addition of Rs.11,83,249/- made on the basis of the valuer's report without giving sufficient opportunity to valuation officer to mak....

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....unt. In this regard, we are of the considered view that the books of account subsequently prepared on the basis of the loose papers or material found at the time of survey is acceptable unless there is material showing that the books of account subsequently maintained was not proper or not in accordance with approved method of accounting. In the case under consideration no such contrary material was found that the books of account subsequently maintained were not in accordance with principle of accountancy. When the A.O made addition on the basis of loose paper which has been incorporated in the books of account and no defect otherwise has been found that those loose paper entries were recorded incorrectly. Under the circumstances when thos....

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....ch addition of Rs.40,85,115/- has been deleted, meaning thereby, that to the extent there is explanation from the assessee. After considering all the aspects of the matter, the CIT (A) deleted the addition of Rs.11,83,249/-. We, therefore, find that the CIT (A) has rightly deleted the addition of Rs.11,83,249/-. Order of the CIT (A) is confirmed on the issue. 12. We have heard the ld. representatives of the parties and records perused. It is admitted fact that the books of account prepared subsequent to survey was found in order. There is no provision under the Act that if the books of account are not found at the time of survey, the exemption under section 10 (23C) will be withdrawn. When finally at the time of assessment and before the....