2021 (8) TMI 458

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....The facts in nut shell as stated by the AO is that the assessee had filed return of income declaring total income of Rs. 53,95,817/- for limited scrutiny on four issues as discernible from page 24 of PB which is the notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred to as the "Act"). The AO after calling for the explanation and documents in respect of four issues raised inter alia has only drawn adverse inference against the assessee on one issue i.e. Sundry creditors. Thereafter made an addition on this issue of Rs. 1,48,19,758/-. 4. Aggrieved the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the addition made by the AO. However, thereafter he proceeded to estimate the income of the asses....

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....see were not maintained as per his satisfaction, the AO ought to have invoked the provision of Section 145(3) of the Act and rejected the books of account of the assessee." According to Ld. A.R. these observation of the Ld. CIT(A) is on wrong assumption of facts because the AO nowhere in the assessment order has made any such observation that he is not satisfied with the books of accounts maintained by the assessee and there was any shortcomings as per Section 145(1) or Section 145(2) of the Act. Thereafter, he brought to our notice the other contradiction/finding/conclusion wherein at Para 6 of last line of Ld. CIT(A) observes "......in the instant case, as stated above, it is a good ground for rejection of books of accounts." The Ld. A.R.....

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....cted. We find force in the submission of the Ld. A.R. that there is per-se contradiction in the findings of the Ld. CIT(A) in respect of books of accounts of the assessee. Even though a brave attempt has been made by the Ld. Sr. D.R. Smt. Ranu Biswas to say that the AO has observed that the assessee could not produce the vouchers and bills to substantiate the purchase and payments made etc. so, according to her, these omissions on the part of assessee would vitiate the books of accounts. We do not agree with the contention of the Ld. Sr. D.R. on this issue for the reasons that if there is deficiency in vouchers or bills supporting the inference of the expense, this in our view cannot make accounts maintained by the assessee to be incorrect ....