TaxTMI 
TaxTMI 
2016 (4) TMI 335
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.... 145(3) without any justification. The assessee has maintained regular and paper books of account dully audited by Chartered accountant and expense are vouched and verifiable. 2. That the learned Authorities below have grossly erred in law and facts in not accepting CBDT Circular official Memorandum [F.No. 279/Misc/52/2014-(ITJ] dt. 07/11/2014 issued u/s 119 (2) of the IT Act which is binding on all officers employed in the execution of the Act [ Navneet Lai Jhaveri V/s K.K. Sen.AAC (1965) 56 ITR 198 (SC), and therefore the assessment order so made is without jurisdictions, illegal and void ab-initio. 3. That the learned Authorities below have grossly erred in law and facts in making/ confirming trading addition of Rs. 93,51,479/- and....
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.... profit rate of 4.95% as compared to contract receipts of Rs. 2,05,56,431/- and net profit of 8.26% for A.Y. 2011-12. All the grounds of the appeal are against rejection of books of account U/s 145(3) of the Act, the Assessing Officer made assessment out of jurisdiction, not considered the past history of the case, not allowed third party interest and treating interest income as income from other sources and charging interest under various sections. The ld Assessing Officer further observed that the assessee has not maintained stock register, consumption register, opening and closing stock inventory. The audit report, no comment on it. The assessee did not have party wise purchase details of Rs. 9,39,39,576/-, which is not subject to verifi....
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.... was made in the income of the assessee. Further the interest income also assessed as income from other sources of Rs. 23,94,707/-. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had dismissed the assessee's appeal by observing that the assessee had not complete bills/vouchers and books of account during the course of assessment proceedings, therefore, rejection U/s 145(3) of the Act is justified. It is further held that in A.Y. 2011-12, the net profit has been declared by the assessee @ 12.7%. In this year, the net profit before interest and depreciation is down to 6.48% which has been tabulated in appeal order by the ld CIT(A). She further held that the ld Assessing O....
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....f books of account. Further it is argued that even in invoking provisions of Section 145 does not confirm blind power upon the Assessing Officer and she is not at liberty to assessee the income at whatever figures she wants. She is bound to make an honest estimation of income on the basis of past history, local knowledge and comparable case after confronting with the treading result. An arbitrary, capricious and wild estimation has done in the present case, are not at all permitted in the eyes of law, for which he relied on the decision in the case of Brij Bhushan Lal Parduman Kumar Vs. CIT 115 ITR 524 (SC). He further argued that even books are rejected U/s 145, it is not mandatory in each and every case, addition is required to be made as....
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....nt, income of the assessee cannot be deduced correctly. Therefore, we uphold the rejection U/s 145(3) of the Act. The ld AR challenged the jurisdiction of the Assessing Officer before the ld CIT(A) as well as before us but there is no basis on which jurisdiction has been challenged by the ld AR, therefore, there is no merit on raising ground No. 2 by the assessee. Accordingly, ground No. 2 of the assessee's appeal is also dismissed. When books of account had been rejected U/s 145(3) of the Act by the Assessing Officer, the only option is left before him to estimate fair income on the given circumstances and nature of the business by comparing the case of by collecting the evidences. The net profit during the year under consideration is 4.95....
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.... net profit rate applied @ 11% is higher side even books of account rejected as not produced by the assessee but the business result can be compared from the other cases, which has also not been applied by the lower authority even confirming the addition by the ld CIT(A). Keeping in view of the past history of the case, we apply N.P. rate @ 5.5% subject to interest and remuneration to the partner. The Assessing Officer is directed to calculate the income as per observation made by us. 7. In the result, the assessee's appeal is partly allowed. Order pronounced in the open court on 04/03/2016. ============= Document 1 YEAR Turnover NP % OF NP % APPLIED IN DECLARED DECLARED ASSTT. BY A.O 2012-13 153853690 7610364 4.95....