2017 (3) TMI 953

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....O. to refute the same in contravention of Rule 46A of the I.T. Act 1961. ii) On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting disallowance of Rs. 91,00,915/- stating the AO was not justified in invoking the provisions of sec. 44AD/44AF of the I.T. Act without appreciating the fact that provisions of sec. 44AD/44AF were never invoked by AO and AO had merely estimated profits in absence of complete details being furnished by the assessee by rejecting the books of accounts. iii) The appellant prays that the order of CIT-A on the above grounds be set aside and that of the AO be restored. iv) The appellant craves leave to amend or later any ground or add a new ground which may be necessary. 3. In this case ....

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....dation entries to/from such parties. In view of the above discussion the book result shown by the assessee cannot be accepted on the face value and the only relevance of the books is the turnover shown. It may be relevant mention here that in the immediately preceding year also the assessee's book result were rejected on the basis of similar finding and the net profit of the assessee was estimated at 2% of the turnover. Considering the facts of the case for the A.Y. under consideration the net profit of the assessee is estimated at 2% of the turnover which comes to Rs. 91,00,915- (i.e. 2% of Rs. 45,50,45,762/-). Accordingly, Rs. 91,00,915/- is treated as business income. penalty proceedings u/s. 271 (1) (c) of the I.T. Act 1961 is initiat....

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..... 40 lakhs, the provisions of these sections provide an option to a person to claim lower profits and gains than the profits and gains specified in the main sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB. The main reason, on account of which the AO rejected the books of account of the appellant and applied the provisions of sections 44AD/ 44AF was that the AO had found some discrepancies and mismatch between the sales/purchases reported by the appellant and the confirmations received in response to notices issued u/s 133(6). However, it is also true that the app....

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....e, as highlighted by the appellant, the AO's contention that 'transactions with parties who have provided confirmations appear to be non- genuine', is based on presumptions and not substantiated by facts and findings. In view of above facts and circumstances, therefore, it is evident that the AO was not justified in invoking the provisions of sections 44AD/ 44AF and making an addition of Rs. 91,00,915/- thereof, without providing sufficient opportunity of hearing to the appellant. Even on merits, the addition is not justified. Hence, the addition of Rs. 91,00,915/- is deleted. 5. Against above order revenue is in appeal before us. We have heard both the counsel and perused the records. 6. We find that A.O. has mentioned several....