TaxTMI 
TaxTMI 
2017 (7) TMI 823
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..... 3(b) Assessee filed return of Income for said Assessment Year electronically on 01.12.2012. Revenue selected the case for scrutiny. On statutory notice being issued, the Assessee filed initial details. 3(c) To be noted, the Assessee is a public limited company engaged in the business of civil construction and related services. 3(d) As stated supra, the case of the Assessee for the said Assessment Year was selected for scrutiny and ultimately Assessment under Section 143(3) of the IT Act was completed on 31.03.2015. 3(e) On completion of Assessment as aforesaid for the said Assessment Year, two main aspects relevant to this case that emerge from the assessment order are to be noted and they are follows: i) Assessing Officer (hereinafter referred to as 'AO' for brevity) added an estimated income of Rs. 21,40,00,000/- for certain projects; ii) Assessing Officer disallowed an amount of Rs. 2,61,96,790/- under Section 14A of the IT Act; 3(f) Therefore, the issues involved in the order of the AO are addition of estimated income and dis-allowance of certain amounts under Section 14A of the IT Act. 3(g) Aggrieved by the order of the AO (order dated 31.03.2015), the Assess....
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....eliable and reject the Books of Accounts before the proceeding to make his own assessment. In the instant case, there is no reference in the Assessment Order of the AO regarding rejection of Books of Accounts. 4(d) Therefore, there is nothing on record to show that the AO came to the conclusion that the Books of Accounts maintained by the Assessee are incorrect, incomplete, unreliable and as a consequence rejected the Books of Accounts. 4(e)Therefore, after setting out the plethora of case laws on this point, CIT (A) held that the accounts of the Assessee cannot be rejected merely based on the perception of the AO that the Assessee has declared low profit margin for certain projects when Books of Accounts have not been rejected. Considering the factual position that there is no reference in the Assessment Order made by the AO regarding the Books of Accounts (this has been fairly admitted by the Revenue before ITAT), we are not, therefore, labouring through the labyrinth of case laws relied on by CIT(A). The relevant portion pertaining to admission in this regard by the Revenue is at Paragraph 4 of the order of ITAT and the same reads as follows: "4.On a query from the bench, whe....
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....ng with and approving a Full Bench Judgment of this Court in Rimmalapudi Subba Rao vs Noony Veeraju And Ors reported in AIR 1951 Mad 969 laid down principles as to when a question of law becomes a substantial question of law at all. 4 (k) Thereafter, with regard to 'substantial questions of law', tests were laid down by the Hon'ble Supreme Court of India for finding out whether a given set of questions of law are mere questions of law or substantial questions of law and the same are found in Hero Vinoth Vs. Seshammal [(2006) 5 SCC 545] case. The ratio / tests laid down by the Supreme Court is found in paragraphs 21 to 24 of the said judgment, which read as follows : "21. The phrase substantial question of law , as occurring in the amended Section 100 CPC is not defined in the Code. The word substantial, as qualifying question of law , means of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with technical, of no substance or consequence, or academic merely. However, it is clear that the legislature has chosen not to qualify the scope of substantial question of law by suffixing the w....
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.... in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law." 22. In Dy. Commr. v. Rama Krishna Narain [1954 SCR 506 : AIR 1953 SC 521] also it was held that a question of law of importance to the parties was a substantial question of law entitling the appellant to a certificate under (the then) Section 100 CPC. 23. To be substantial a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law involving in the case there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, t....