2026 (1) TMI 814

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....2018-19 (hereinafter the "AY"). 2. Brief facts are that the assessee filed its return of income on 27.03.2019 declaring a total income of Rs. 32,94,370/-. The case was selected for scrutiny and assessment was completed u/s. 143(3) read with section 144B of the Income-tax Act, 1961, determining total income at Rs. 38,94,370/- by making an addition of Rs. 6,00,000/-. The addition arose from the AO's estimation of undisclosed income based on a disclosure of Rs. 30,00,000/- made during a survey conducted on 30.01.2018. The AO rejected the books of account u/s. 145(3) and extrapolated the disclosed income for twelve months, resulting in an estimated net profit of Rs. 37,83,249 as against disclosed net profit of Rs. 31,83,249/- leading to the ....

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....torney, etc., but again failed to provide the requisite supporting details. Therefore, the action of the AO in rejecting the books of account is held to be justified. 5.6 It is observed that the appellant declared a total turnover of Rs. 18,75,600/- and a net profit of Rs. 1,83,249/-, reflecting a profit rate of 9.77% for the year under consideration. The survey was conducted on 30.01.2018, during which unaccounted income of Rs. 30,00,000/- was disclosed. Since the survey took place at the end of January, the AO considered the disclosed income as pertaining to a period of ten months. While completing the assessment, the AO extrapolated the unaccounted income to Rs. 36,00,000/- for twelve months and computed business income by apply....

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....Officer rejected the books of accounts, the assessment should have been framed u/s. 144, not section 143(3). The rejection of accounts is argued to be unlawful, as section 145(3) was not applicable to the facts. The Assessing Officer erred in rejecting the books, and the Commissioner (Appeals) failed to appreciate this defect. The addition of Rs. 6,00,000/- as undisclosed business income is claimed to be arbitrary, unsupported by facts, and wrongly upheld by the Commissioner (Appeals). Ld.AR furthermore, stated that the Assessing Officer allegedly made baseless estimations of unaccounted income and sales, including extrapolating figures for 12 months and for periods beyond the survey, without any rational basis. Admissions made during the s....