TaxTMI 
TaxTMI 
2014 (12) TMI 640
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.... the assessee derives income from execution of contract work awarded by different departments of the Government. During the assessment year 2006-07 the appellant declared profit of Rs. 22,24,001/- on total contract receipts of Rs. 3,51,51,351/- subject to depreciation and interest on third parties. A net profit in a tune of Rs. 5,25,268/- including interest received on Fixed Deposit Receipts yielding a net profit rate of 1.1% as against 1.15% in the immediately preceding year. The Assessing Officer considered the declared net profit quite low, thus, called upon the assessee to explain as to why a net profit rate @ 12.5% be not applied. The Assessing Officer while rejecting the accounts books of the assessee pointed out certain discrepancies....
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....e return by the assessee. In this appeal before us the submission of learned counsel for the revenue is that the Assessing Officer being not satisfied with the correctness and completeness of the accounts of assessee decided to apply the method of accounting as per Section 145(3) of the Act of 1961. The decision of the Assessing Authority was based on objective consideration of the books of accounts maintained by the assessee and, therefore, the Income Tax Appellate Tribunal erroneously interfered with the discretion of the Assessing Officer. It is emphasised that the Income Tax Appellate Tribunal has not taken into consideration the reasons given by the Assessing Officer for being not satisfied with correctness and completeness of the a....
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....lume) has been maintained for marking the attendance of all the laborers working at various sites of far away places like Jodhpur, Sirohi, Khinwara, Abu Road, Jojawar, Sadri- Ranakpur, Bijapur-Goria etc. In this Register also only names of persons are mentioned without any other identification like father's name, address, category of the worker like Mistry, Met, Karigar, Mazdoor etc. and against them "P" is marked by the assessee's men. No date wise signatures are obtained in the register though they put their signatures on the stamps affixed to it showing the payment. Even the name of the Sites is no where mentioned in the register where the laborers have worked. Marking attendance in one register for all these sites is impossible ....
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.... soil etc. were made in cash also. Out of total purchase of soil at Rs. 6,37,220/- only a payment of Rs. 81,600/- was through cheque and the remaining payments were made in cash where identity of the recipients are not verifiable. (iv) The assessee has shown sundry creditors to the tune of Rs. 1,26,56,471/-. Only names of individuals are given in respect of these creditors and identity of these creditors is not proved though sufficient opportunity has been given. Even the name of father of these creditors is not available rendering their address incomplete. (v) Verification of ledger revealed that cash payments exceeding Rs. 20,000/- were made to the creditors on various dates during the year, who....
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.... Officer while making assessment of return can reject the same as unreliable, if important transactions are omitted therefrom or if proper particulars in vouchers are not forth coming or if they do not include entries relating to several relevant facts necessary to compute income. The rejection of accounts would always be justified when the accounts books are found unreliable, incorrect or incomplete for valid reasons. In the case in hand the Assessing Officer by relying upon several errors and incompleteness in the books of accounts decided to invoke the authority as per Section 145(3) of the Act of 1961. Suffice to mention that no plausible reason was extended by the assessee for errors in the vouchers and in other accounts books. The ....