TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 683
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.... answered are quoted hereunder:- "(i) Whether the Tribunal was justified in affirming the order of the Ist Appellate Authority with regard to the deletion of the addition made under Section 69 of the Income Tax Act on the ground that the books of accounts were not examined? (ii) Whether the Tribunal was justified in deleting the addition of Rs. 1,21,61,243/- towards extra profit after rejecting the books of accounts under Section 145(3) of the Income Tax Act?" The brief facts of the case are that the assessee company is limited company which has filed its return on 30.09.2009 declaring income of Rs. 4,62,02,180/-. The assessment was completed on 29.12.2011 u/s 143 (3) of the act determining the income of the assessee at Rs. 7,30,38,800....
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....the settled law. Under the provisions of Section 142A of the Act a reference could have been made to the DVO only in a case where the books of account had been rejected. The Hon'ble Apex Court has conclusively held in the case of Sargam Cinema vs. Commissioner of Income Tax reported in (2011) 241 CTR (SC) 179 that a reference could have been made to the DVO only in a case where the books of account had been rejected. In view of the facts stated above, the reference made to the DVO by the authority concerned is clearly bad and illegal in this case. The question of law no.1 is, therefore, answered in favour of the assessee and against the department. Insofar as the next question is concerned, the assessing officer had made an addition ....
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....nder consideration the assessee's auditor have been mentioned the following note:- "The nature of the business is such that it is not possible to furnish quantitative details of Raw Materials and Finished Products" 8. In the light of the said facts and circumstances of the case following facts emerge out:- (i) Opening and closing stock of the assessee are not verifiable. (ii) Day to day consumption of raw - material is not verifiable. (iii) No co-relation can be established between raw material consumed and finished products prepared. (iv) Assessee failed to produce all the vouchers of the building construction even after availing so many opportunities as discussed above. In the light of the aforesaid facts and circumstanc....
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.... and adversely affected." It is important to note that Gross receipts of the assessee in the year under consideration is almost same like last years and gross profit for the AY 07-08 and 08-09 are also same. But gross profit of the assessee has come down substantially in the year under consideration in comparison to last year. Assessee's reply on this score is against the facts mentioned above. Its reply has no force and the same is being rejected because on account of reasons mentioned in reply receipt of the assessee is almost same as in last year. Had the contention of the assessee been correct receipt of the assessee for the year under consideration would have come down substantially. For ready reference details of the gross recei....
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....8% (iv) Gross profit % applied as shown last year Rs.35.66% (v) Estimated gross receipt Rs.20,50,00,000/- (vi) Profit @ 35.66% Rs.7,31,03,000/- (vii) Difference between (ii and vi) Rs.1,21, 61,243/- From a reading of these paragraphs it is apparent that full particulars and details were never supplied by the assessee. The assessing officer, therefore, made an addition. The CIT and Tribunal have not considered these aspects at all, who have ignored them and have, therefore, deleted the addition. Learned Counsel for the department, Sri Shubham Agrawal has relied on two decisions of this Court in the case of Izhar International vs. Deputy Commissioner of Income-tax reported in (2013) 40 taxman.com 452 (Allahabad) and in the case ....