TaxTMI 
TaxTMI 
2017 (2) TMI 506
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....ersing assessing officer's decision to reject books of accounts and estimate the profit at a certain percentage of the gross receipts. (2) On the facts and circumstances of the case, ld. CIT(A) erred in observing that no sufficient and specific findings were brought on record which could have warranted rejection of books of accounts. (3) On the facts and circumstances of the case, ld. CIT(A) erred in observing that non-furnishing of details of sundry creditors in a proper way was not sufficient reasons to reject books of accounts. 2. The assessee in the present case is a joint venture between M/s. SPML and M/s. CISC Limited for carrying out some works contract jointly. The return of income for the year under considerati....
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....the ld. CIT(Appeals):- " 2.1. With regard to the above it is submitted that assessment proceedings began vide notice issued u/ s 142 ( 1 ) in August, 2011 . However, details of creditors were not requisitioned in the said notice. Later, in course of hearing in November the assessee was asked to produce the details of creditors. 2.2. The assessee produced the complete break-up of the creditors ( party-wise) together with their addresses in the last week of November. It was only with respect to the creditors of Rs. 43 ,95 ,311 /- that the addresses could not be provided because the project ( pertaining to such creditors) got terminated and all the books of account ( including the creditor details) had to be transferred to di....
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.... or (C) where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal." 3.2. From the above it is clear that the CIT( A) may admit additional evidence under Rule 46 A of Income Tax Rules, 1962 in case the assessee was not provided sufficient opportunity by the AO and in case the assessee was prevented by sufficient cause from producing the evidence as called upon by the AO. 3.3. Thus applying the said rule to the facts of the case it is clear that details of balance creditors produced at this stage should be admitted under Rule 46 A. 4.1. Further, it is pointed out that the action of the AO in reje....
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....raph no. 10 and 10. 1 of his impugned order:- " 10. The assessment order and the submission of the appellant have been duly considered in the deciding the issue at hand. The list of sundry creditors submitted at the appellate stage has been duly considered and admitted since it is apparent that the appellant was prevented by sufficient cause from producing the evidence as called upon by the AO. I find that the AO has not pointed any specific deficiency in the accounts of the appellant warranting the application of section 145 of the Act and more so since it is pointed out that accounts of the appellant are audited and in the absence of any adverse remark in the auditor' s report, there lies a presumption that books of account m....
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....ot be invoked by any means. In view of the matter as discussed, I find that the action of the AO is devoid of any merit and hence the addition made on this count is not sustainable and therefore deleted". Aggrieved by the order of the ld. CIT(Appeals), the Revenue has preferred this appeal before the Tribunal. 5. The ld. D.R. submitted that specific defects were pointed out by the Assessing Officer in the books of account and other record maintained by the assessee and the same were sufficient to reject the book results declared by the assessee by invoking the provisions of section 145( 3). He contended that although the said defects were claimed to be removed by the assessee before the ld. CIT(Appeals), the details filed by the asses....
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....essing Officer in rejecting the books of account cannot be said to be tenable in the eyes of law. 7. We have considered the rival submissions and also perused the relevant material available on record. It is observed that the books of account of the assessee were rejected by the Assessing Officer merely on the basis of the failure of the assessee to furnish the complete details of the creditors as required by him and there was no other defect pointed out by the Assessing Officer in the books of account maintained by the assessee to justify the rejection of books of account. As held by the Hon'ble Guwahati High Court in the case of Madnani Construction Corporation Pvt. Limited (supra) cited on behalf of the assessee, the failure of the as....