2024 (10) TMI 1715

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....T(A) in directing the Assessing Officer to estimate the net profit of the assessee @ 0.77% of the total turnover. 3. The brief facts of the case are that during the assessment proceedings, the Assessing Officer noted that the assessee in its balance sheet had claimed an amount of Rs.21,32,57,979/- towards sundry creditors. On being asked to furnish the necessary details, the assessee furnished a list of persons to whom the aforesaid payment was made. The Assessing Officer, thereafter, issued notices u/s 133(6) of the Act to various persons mentioned in the said list, calling for verification of the transactions. However, majority of the notices either remained unclaimed, or the said persons did not make any compliance to the said notices....

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....ons with them. The ld. CIT(A), considering the aforesaid submissions, observed that the rejection of books of account by the Assessing Officer on account of non-compliance/non-service of notices issued u/s 133(6) of the Act to some of the sundry creditors and subsequent estimation of income of the assessee @ 2% of the contracted work/turnover, was not tenable. He, however, accepted the alternate contention of the assessee, as was submitted before the Assessing Officer during the assessment proceedings, to determine the net profit of the current year on the basis of the earlier three years' average, which, as per the data submitted by the assessee itself, was @ 0.77% of the total turnover. 5. Now, the main contention of the ld. counsel fo....

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....wever, we under protest accept our books of accounts to be rejected. We would like to pray before good self to please determine net profit on the basis of historical trend as the scrutiny assessment of all these years has also completed in due course at your office, which are as follow: - PARTICULARS FY 2011-2012 FY 2010-2011 FY 2009-2010 Average Turnover 90,95,08,783. 2,03,98,05,261. 1,85,17,55,583. 1,60,03,56,542. Net profit before tax 49,70,757.24 1,90,14, 323.93 1,55,47,761.32 1,31,77,614.16 Net Profit 0.55 0.93 0.84 0.77 6.1 He has further submitted that the ld. CIT(A) has taken note of the aforesaid submissions of the assessee and directed the estimation of the profit of t....

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....the CIT(A) that the ld. CIT(A) having observed that merely because notices to some of the parties remained unserved and in some other cases, they did not respond, the rejection of the books of account for that reason was not justified. The contention of the ld. AR is that in view of the above finding of the ld. CIT(A), the returned income of the assessee was liable to be accepted. We are not convinced with the aforesaid contention raised by the ld. AR of the assessee. Even, though the ld. CIT(A) has held that the books of account should not have been rejected on account of non-service, non-response from some of the parties, however, despite these observations, the ld. CIT(A) has not held that the genuineness of the transactions/sundry credi....