TaxTMI 
TaxTMI 
2022 (5) TMI 505
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.... The order passed u/s. 143(3) of the IT. Act, 1961 by the income tax officer is bad in law and requires to be cancelled. 2. In law and in the facts as well as the circumstances of the appellant's case, the A.O. has erred in making additions for the assessment year 2016-17 when no such additions were warranted. Those may be deleted. 3. Without Prejudice to the ground at Sr. No (2) above, the learned Assessing officer has followed an erroneous method in arriving at the time of making additions of Rs. 83,79,060/- to the income. 4. The disallowances made in the assessment order are without appreciating in the facts and evidences in proper perspective and highly debatable. A. Disallowance of other expenses relating to transport, sala....
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....onsideration. Thus, in the absence of any invoices/bills/vouchers, complete cash book etc., the genuineness and correctness of expenses could not be verified by the Assessing Officer. Keeping in mind that the assessee is engaged in the transportation business but he could not submit any documentary evidences to substantiate his claim, 3% of the total other expenses of Rs. 27,93,02,001/- as claimed by the assessee in his return of income for the Assessment Year 2016-17, i.e. Rs. 83,79,060/- is disallowed by the Assessing Officer and added back to the total income of the assessee. The Assessing Officer thus completed the assessment by determining the total income at Rs. 86,83,140/- vide order dated 21.12.2018 passed under Section 143(3) of th....
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....e Evidence Act. (b) CIT v Krishnaveni Ammal (1986) 158 ITR 826, 829, 830 (Mad.) wherein it has been stated that the law of evidence mandates that if the best evidence is not placed before the court an adverse inference can be drawn as against the person who ought to have produced it. (c) Jayshree Roy Chowdhary Vs. DCIT - 92 ITD 400 (Kol.) In view of the ratio laid down in the case laws (supra), I am of the opinion that the AO has correctly rejected book results and estimated the profits in this case. However, it is to be seen as to whether such disallowance is reasonable or not? The undersigned is aware about the business model but the book results are appearing doubtful as can be seen below: Tarpawankumar Ramprasad Sandhir Statemen....
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....;ble Supreme Court. The decision also gets support from CIT v/s. Saatal Kattha and Chemicals Pvt. Ltd. 296 ITR 197 (MP). In view of above facts, the decision for rejection of books of account by the AO is upheld. Having, rejected decision of book results as the same is not showing the reasonable and logical results, the question arises at what level the net book results can be considered so as to convey the decision which can pass the test at judicial process. Hon'ble Karnataka High Court in the case of Shankar Khandsari Sugar Mills Vs. CIT 193 ITR 669 (Kar.) has observed that "In the absence of any prejudice to the revenue, and the basis of the tax under the Act being to levy tax, as far as possible, on the real income, the approach sh....
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....tra, the learned Departmental Representative submitted that the addition of 3% of the total of other expenses made by the Assessing Officer to the total income of the assessee has been reduced to 0.60% of the Net Profit by the learned CIT(A) which is also not correct, in the absence of necessary evidences and requested to restore the disallowance made by the Assessing Officer. 7. We have given our thoughtful consideration to the orders of the authorities below and also perused the material placed on record including paper-book filed by the assessee. Undoubtedly, the Assessing Officer made disallowance @ 3% of the total of other expenses and the learned CIT(A) determined the net profit at 0.60% on the total turnover of Rs. 27,93,02,001/-. A....