TaxTMI 
TaxTMI 
2018 (1) TMI 1039
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....sessing Officer rejected the Books of Accounts and estimated the Gross Profit at Rs..1,10,11,921/- applying the Gross Profit ratio of 8.28% of the immediately preceding Assessment Year i.e. 2008-09 as the assessee could not produce the Books of Accounts. On appeal the Ld.CIT(A) sustained the action of the Assessing Officer in rejecting the Books of Accounts and estimating the Gross Profit holding that when the Books of Accounts are not properly maintained and the opening stock, purchases, sales and closing stock are not capable of independent verification there is justification for rejection of Books of Accounts. 4. Ld. Counsel for the assessee before us vehemently submits that assessee is maintaining Books of Accounts in Tally software, the auditor has audited the accounts in the computer itself, there was no physical ledger or register of any account maintained by the assessee separately. The Ld. Assessing Officer has not asked the assessee to produce the copies of the bills, invoices for the whole year. The assessee maintained stock register in the computer itself. Therefore, it was not possible to produce stock register signed by the stock/godown in-charge. Learned Counsel for....
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....ficer has not asked for the vouchers. Stock registers are available. Therefore, there is no justification in rejection of Books of Accounts. 8. As stated earlier the assessment was taken up at the fag end of the year and there was no sufficient opportunity provided to the assessee to produce the Books of Accounts. The Assessing Officer also did not ask for the form in which the books have to be produced i.e. physical form or electronic form. The contention of the assessee is that it is maintaining the Books of Accounts mostly in the electronic form. Simply because the books were not produced in physical Form the same cannot be rejected especially when the books were audited and the assessee is a limited company. Therefore, taking the totality of facts and circumstances into consideration, we are of the considered view that this issue is to be restored to the file of the Assessing Officer and the assessee should be given one more opportunity to produce the Books of Accounts before the Assessing Officer to substantiate its claim for the loss incurred during the current Assessment Year. Thus we set-aside this issue to the file of the Assessing Officer who shall examine afresh in acco....
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.... with reference to the submissions made by the Ld. Counsel for the assessee and therefore we set-aside this issue to the file of the Assessing Officer for adjudicating this issue in accordance with the law after providing adequate opportunity of being heard to the assessee. This ground is allowed for statistical purpose. 14. The last ground of appeal of the assessee is in respect of confirming the action of the Assessing Officer in treating the investment made in land as unexplained investment u/s. 69 of the Act. 15. The Assessing Officer while completing the assessment noticed that the assessee has purchased land worth of Rs..5,04,99,110/- from various persons and assessee was required vide order sheet entry dated 09.11.2011 to justify the sources of funds for purchase of agricultural land with confirmation of copies, copy of sources of funds. On 14.11.2011 assessee has submitted that one of the Directors Shri Suresh Babu entered into agreement in November, 2007 with the vendors for purchase of land. However, subsequently it came to know that one of the Director Shri Prasanth Boorugu personally came to know that the vendors owe some money to his Father-in-law Shri G. Eswara Rao ....
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....e consideration for the same was payable to Shri G. Eswara Rao by them. Since the assessee company owe certain money to Shri G. Eswara Rao; Shri G. Eswara Rao in-turn had asked Mr.Rajgopal Reddy and others to sell the lands belonging to them in favour of the assessee company for settling the consideration for the acquisition of shares in M/s. Sarita Sugars Pvt. Ltd.. Therefore, it was submitted by the Ld. Counsel for the assessee that instead of registering the said lands in favour of Shri G. Eswara Rao the same were transferred by Mr. Rajagopal Reddy and others to assessee Company by way of sale agreement to assessee company. It was contended that all these documents had already been submitted to the Assessing Officer on 09.11.2011 by the assessee company vide letter dated 08.01.2011, therefore, Learned Counsel for the assessee submits that the sources for acquisition of the land has been explained properly by the assessee company and therefore the provisions of section 69 cannot be invoked. 19. Ld. DR vehemently supported the orders of the authorities below. 20. We have heard the rival submissions, perused the orders of the authorities below and the case law relied on. It is ....
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....se section 69 of the Act by a deeming provision provides for treating an unexplained investment made by an assessee during a financial year to be income of the assessee of the financial year for the purpose of assessment and unless the requirements of the section 69 are strictly satisfied by a finding by the assessing officer on relevant materials that the appellant has actually made some unexplained investments in stock-in-trade during the financial year 1988-89 to the tune of Rs. 2,70,421/- section 69 cannot be applied to treat the said sum of Rs. 2,70,421/- as income of the appellant for the assessment year 1989-90. In the facts and circumstances of the case, therefore, the addition of Rs. 2,70,421/- by applying section 69 of the Act is not legal and justified. The second question of law is accordingly answered in favour of the appellant-assessee." 21. The Hon'ble High Court also held that an investment made in a particular Financial Year, the same, cannot be treated as unexplained investment in the subsequent Financial Year. In other words, it should be treated as investment in the year in which it is recorded in the Books of Accounts relevant to that particular Financial ....