TaxTMI 
TaxTMI 
2023 (4) TMI 36
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....ounds raised in these appeals are common, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under. Facts are extracted from I.T.A.4/Viz/2023 . 2. Briefly stated the facts are that the assessee is a partnership firm, engaged in the business of electrical fabrication contracts filed it's return of income as follows : A.Y. Returned Income 2013-14 87,90,419 2014-15 91,67,810 2015-16 92,67,150 2016-17 1,36,84,114 A survey operation u/s 133A of the Income Tax Act, 1961 (in short "Act") was conducted at the business premises of the assessee on 19.02.2019 and some incriminating material in the form of daily cash payment vouchers, personal diaries of the ma....
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....ce of production of any vouchers for expenditure incurred. 3. On the facts and circumstances of the case, the Learned CIT(A) would have appreciated that the Assessing Officer has estimated the income without rejecting the books under section 145 of the I.T.Act and hence would have treated the estimation as invalid. 4. On the facts and circumstances of the case, the Learned CIT(A) ought to have appreciated that the appellant has categorically furnished reasons for low profits in this line of business by explained the nature of the contract works carried on by the firm and therefore, would have deleted the addition made. 5. On the facts and circumstances of the case the Learned CIT(A) ought to have appreciated that ....
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....of Income Tax, Chennai Vs. Marg Ltd. [2017] 84 taxmann.com 52 (Madras) held that (ii) Hon'ble High Court of Karnataka in the case of Commissioner of Income Tax, Belgaum Vs. Anil Kumar & Co. [2016] 67 taxmann.com 278 (Karnataka) held that (iii) Hon'ble High Court of Calcutta in the case of Swadeshi Commercial Co.Ltd. Vs. Commissioner of Income Tax, West Bengal vide ITA 219 of 2001 dated 18.12.2008 held that He further contended that all the above Hon'ble High Courts have categorically held that profits of the assessee cannot be estimated without rejecting the books of accounts. He further argued that by following the above decisions of the various High Courts, Tribunals have taken the same view. Therefore, he pleaded to ....
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....rred for the business or profession in order to be allowed in computing the income chargeable under the head "profits and gains of business and profession". Therefore, in the absence of such evidence, the Ld.CIT(A) confirmed the estimation made by the AO @8% on main contracts and 4% on sub contracts. No doubt, the assessee has to establish the expenditure incurred for the purpose of it's business or profession during the assessment proceedings and the onus lies heavily on the assessee to establish the nature of the expenditure with the support of documentary evidence. Then only, it is entitled to claim the expenditure. In the present case on hand, if the AO is not satisfied with the explanation given by the assessee, he should have rejected....
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....Co. [2016] 67 taxmann.com 278 (Karnataka) held that "The Tribunal has rightly held that when the books of account of the assessee had not been rejected and assessment having not been framed under section 144, the Assessing Officer and the Commissioner (Appeals) were in error in resorting to an estimation of income and such exercise undertaken by them was not sustainable. Section 145(3) lays down that the Assessing Officer can proceed to make assessment to the best of his judgement under section 144 only in the event of not being satisfied with the correctness of the accounts produced by the assessee. In the instant case, the Assessing Officer has not rejected the books of account of the assessee. To put it differently the Assessing....
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....and had been taken into account for the purpose fo deciding this question which has been raised in this appeal , we allow the appeal and answered the question in the affirmative in favour of the assessee. The appeal is therefore, disposed of." In the instant case, the Ld.CIT(A) has erred in confirming the order of the AO and arriving at a conclusion that if some vouchers / evidence pertaining to the claim of the assessee are not satisfactorily established before the AO, the AO is not empowered to estimate the profits of the assessee without rejecting the books of accounts. If at all the assessee has not submitted the evidences for it's expenditure satisfactorily before the AO, then the only option for the AO is that he should reject the ....