TaxTMI 
TaxTMI 
2016 (4) TMI 1094
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....t declared Nil income in its return, which was not accepted by the AO, by rejecting the books of account, which was upheld by the CIT(A) and as such this appeal before us. 3. Ground Nos.1 and 7 to 10 are general so not adjudicated 4. The grounds no.2 to 4 relate to estimation of net profit by rejecting the books of account of the assessee company. 5. It is noticed that during the assessment proceeding, the books of account was produced before the AO, which were rejected by the AO on the following basis :- (a) Cash vouchers above Rs. 5,000/- were not bearing revenue stamps and the assessee had made many cash payments above Rs. 20,000/-. The AO specifically stated that on 14.09.2007, the assessee has shown cash payment of Rs. 1,74,500/- i....
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....ully the facts of the case, and the reply of the AR of the appellant, it is observed that the AR has no case for justifying the discrepancies and establishing that the books of accounts were maintained properly. In the present case, the issues are not insignificant mistakes or issues which are not relevant for arriving at the correct results. Therefore, the arguments of the AR of the appellant regarding non application of provisions of section 145 of the I.T. Act, on this basis is not justified. In the present case, the nature of mistakes and discrepancies are of serious nature and the same cannot be ignored. Accordingly, the AO was fully justified in rejecting the books of accounts u/s 145 of the income Tax Act. With regard to the appli....
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....e expenditure. Further, as regards payments to labour under the labour contractor, it was sated that payments were made directly to the contract laboures due to the dispute with the contractor. Further, as far as salary is concerned, the assessee placed on record the salary sheets to support the expenditure claimed. The above factual aspects have not been denied by the CIT(A), however, he has held that the issues are not insignificant mistakes or issues which are not relevant and the nature of mistakes and discrepancy are of serious nature and, therefore, cannot be ignored. We, however, neither support the conclusion, on the contrary castigate such an arbitrary approach of the authorities below in the facts of the case. The assessee is a co....
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....ing losses since start of production and the year in question is the first year where the results have been positive. The assessee falls under preview of various laws of the country such as Excise, Sales Tax, Provident Fund and Employee State Insurance and regular inspections/scrutiny's by these Government departments is carried out. Accordingly, the results declared by the assessee are accepted and addition made including addition of Rs. 1,16,68,281/- on account of exchange fluctuation in excess of the declared profit are deleted. 5. Ground No.5 and 6 relates to addition of Rs. 7,35,30,351/- u/s 41(1) of the Act. 6. The AO has noted that the assessee has shown a closing balance of unsecured loan of US $.18,37,340.11/- which is equivalent....
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....36 x 40.02= INR 50,09,447/-. Therefore the balance amount of Rs. 7,35,30,351/- is liable to be added back to the case of the assessee. 7. The CIT(A) has affirmed the aforesaid approach of the AO by holding that once the confirmation letter did not tally with the accounts of the assessee, and the assessee has not provided any reason for not furnishing the documentary evidence before the AO, and held that addition in justified. 8. We have considered the rival submission and perused the material on record. We notice that there is a fundamental misconception on the facts as appreciated by the AO and CIT(A). It is noticed that during the instant year, the assessee had shown in the beginning of the year unsecure loan of Rs. 8,04,75,496/- (Page....