2025 (8) TMI 35

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....f the case are that; the assessee is a partnership firm engaged in retail trading of textiles items etc. For the year under consideration the assessee filed its return of income on 11/02/2022 declaring total loss of Rs. 5,09,093/-. The case of the assessee was subjected to scrutiny wherein the Ld. AO for the want of records rejected the books u/s 145(3) of the Act and consequently estimated the net sales/receipts from dead-stock clearance sales @ 50% of its closing value [Rs. 1,20,41,204/- i.e. 50% of Rs. 2,40,82,409/-] as against net realisation of Rs. 42,87,744/- claimed to have earned by the assessee. With resultant addition, consequential assessment u/s 143(3) r.w.s. 144B of the Act was framed whereby total income was eventually assesse....

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....-co-operation and in the absence documentary evidence the Ld. AO rejected the audited books u/s 145(3) of the Act for the want of correctness & completeness therefore and as a result estimated the total income to the best possible manner in accordance with law u/s 143(3) r.w.s. 144B of the Act. The assessee was much less different in first appellate proceedings in not providing documentary evidences and non-prosecution of appeal. However keeping in view fact and circumstance but without a rational, the Ld. NFAC cut-down the sales estimation to 25% of closing value of inventory. Not too much surprise, the assessee is indifferent in the present proceedings as well. The assessee's audited financial and audit remarks could hardly corroborate wi....

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....osecuted by the appellant. In-spite of several notices issued to it in appellate proceedings, the appellant produced no effective records or documentary evidences in support of grounds raised in form No 35 and claims that were made in the return of income filed by it. In view of such fettered findings, the first appellate authority upheld the rejection of books on the same reasoning and countenanced the consequential action of estimation. However considering other market influential factors, a partial relief by restricting estimation of sales to 25% as against 50% of inventory value, was granted. 7. We note that, the appellant admittedly failed to adduce on record the details of movement of stock, inventory valuation, details of dead-stock....

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....e of valid dissolution executed by the partners for all the reasons, the appellant firms continues its existence in the eye of law thus under the provisions of the Act. Thus, the very claim of presence of extraordinary circumstances for discarding or scrapping the entire inventory under the garb of dead-stock clearance collapsed like a house of cards, which the appellant could hardly rebuild. 8. It remained an admitted fact that, right from the very beginning of the assessment, the appellant desisted from producing key information and also adducing all such evidential documents necessary to prove the correctness & completeness of audited results vis-à-vis claims made by it in its return of income when called. The collectively remark....