TaxTMI 
TaxTMI 
2013 (12) TMI 601
X X X X Extracts X X X X
X X X X Extracts X X X X
....action of the Assessing Officer amounts to "impliedly rejecting the books of accounts", in the absence of any finding in the Assessment Order about the correctness or completeness of the accounts or the method of accounting followed by the assessee as required under Section 145 of the Income Tax Act? B. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal is correct in law in upholding the implied rejection of accounts by the Assessing Officer in the absence of any material on record to show that books of accounts of the Assessee are incorrect or incomplete? C. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal is correct in law in upholding the implied rejection of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter examined the estimation of income made by the Assessing Officer and was found to be justified and correct. Learned counsel for the appellant - assessee firstly submits that the rejection of the books of account of the assessee, in spite of documentary evidence produced before the Assessing Officer, was not justified. He says that there cannot be implied rejection of books of account and this must be expressed. The reasons should have been given as it is a part of natural justice as a valuable right is sought to be taken away. He, therefore, submits that the rejection order of the Assessing Officer, even if we assume that implied rejection is possible, is based on surmises and conjectures and no evidence has been brought to discard th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mployed by the assessee. (2) The Central Government may notify in the Official Gazette from time to time accounting standards to be followed by any class of assessees or in respect of any class of income. (3) Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub- section (1) or accounting standards as notified under sub- section (2), have not been regularly followed by the assessee, the Assessing Officer may make an assessment in the manner provided in section 144." It is clear from sub-section (3) of Section 145 of the Act, that it is the absolute subjective satisfaction of the Assessing Officer about the correctness or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rsonnel cost, administrative & selling expenses, interest & finance charges, etc. considering the increase in turnover reported from year to year. In short, the increase in output costs is almost insignificant compared to the increase in input costs. As indicated in the preceding paragraphs of this order, the steep decline in the rate of net profit, the assessee cannot, therefore, attribute to the increase in input costs. Therefore, the net profit admitted by the assessee is not free from doubt and does not represent the assessee's true and fair profits." We do not think in this case in view of above findings no more words are required to suggest recording of satisfaction of inaccuracy of the books of account. Section 145 of the Act has ....