TaxTMI 
TaxTMI 
2017 (8) TMI 317
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....the appeals are related to the assessment of income on estimation basis rejecting the books of account. The grounds of appeal are one and the same for both the assessment years, hence both the appeals are disposed of in a common order. The lead year is 2010-11 and the assessee charged the appeal on the following grounds : "1. The order of the Commissioner of Income-tax (Appeals) 4, Chennai-600 034 dated November 26, 2015 in I. T. A. No. 8/2013-14/2010-11/CIT(A) for the above mentioned assessment year is contrary to law, facts and in the circumstances of the case. 2. The Commissioner of Income-tax (Appeals) erred in sustaining the assessment of estimated income at 8 per cent. of the project receipts on the strength of the p....
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....e that the method of accounting as well as reckoning of revenue under the project completion method should be considered as acceptable and ought to have appreciated that the change of course for the purpose of making addition on estimated basis was erroneous and wholly unjustified. 8. The Commissioner of Income-tax (Appeals) went wrong in recording the findings in this regard in paragraphs 8 to 23 of the impugned order without assigning proper reasons and justified. 9. The Commissioner of Income-tax (Appeals) failed to appreciate that the decisions relied upon were applied out of the context and not applicable to the factual matrix of the case thereby vitiating the decision to sustain the wrong assessment framed by the ori....
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....Before the Assessing Officer, the assessee submitted that the assessee is following the project completion method and has rightly accounted the income and expenditure as balance-sheet items. In the case of expenditure, the assessee has shown the entire expenditure in the balance-sheet under the head "work-in-progress net of cost" and the receipts were admitted as "advance from client" in the balance-sheet. The appellant contented that on completion of the project, these items would be shifted to the profit and loss account and resultant income will be admitted in the return of income on final completion. However, during the assessment proceedings, the assessee has not produced the bills, vouchers, books of account and the relevant evidence ....
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....estimated the income on the balance receipts of Rs. 44,35,321 at the rate of 8 per cent. which work out to Rs. 3,54,826. 4. Aggrieved by the order of the learned Assessing Officer, the assessee went on appeal before the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer. Hence, the assessee is in appeal before us. 5. Aggrieved by the order of the Commissioner of Income-tax, the assessee filed the appeals before us. Appearing for the assessee, Shri S. Sridhar, the learned advocate argued that the assessee is following the project completion method and maintaining the books of account and as per the project completion method, the final accounts will be arrived a....
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....in the intervening period is not possible and lead to distorting trading results. Though the assessee claimed to have followed the project completion method, it is obligatory on the part of the assessee to maintain the regular books of account and support the contention with the books of account, bills and vouchers, that it is following project completion method and true and correct financial position can be drawn with the books of account. The expenditure debited to the work-in-progress/advances received required to be accounted correctly to show that no inflation of expenditure and no suppression of income was made by the assessee. The assessee has not produced the books of account, bills and vouchers. In the absence of the books of accou....