TaxTMI 
TaxTMI 
2026 (1) TMI 1566
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act') and without passing an order of assessment u/s.144 of the Act. 4. I shall take up the appeal filed by the assessee in ITA No. 584/RPR/2025 for A.Y. 2018-19 as lead case wherein the facts are that the assessee is a resident individual and engaged in the business of trading and commission of iron and steels and also earned interest income during the year under consideration. A search and seizure operation u/s. 132 of the Act was conducted on the residential/business premises of the assessee on 19.02.2020. In response to the notice u/s. 153A of the Act, the assessee filed return of income declaring income at Rs. 8,13,000/-. That in response to the statutory notices issued to the assessee, the Ld. AR attended the proceedings from time to time and had furnished written submission with supporting documents. 5. During assessment proceedings, the A.O observed that the assessee was involved in providing bogus purchase and sale bills, on which, the A.O added sum of Rs. 12,58,774/- as commission income for providing such bogus purchase and sale bills. 6. During the first appellate proceedings, the Ld. CIT(Appeals)/NFAC had affirmed the findings of the A.O and dismissed the app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....v. Swananda Properties Pvt. Ltd. [2019 SCC OnLine Bom 13359] had an occasion to consider the said question and the same was accordingly answered as under:- "11. We note that the books of account of the respondent were rejected by the Commissioner of Income-tax (Appeals) under section 145(3) of the Act. However, the Tribunal found in the impugned order that the invocation of section 145(3) of the Act is unjustified as no defect was noted in the books of account to disregard the same. We note that the Commissioner of Income-tax (Appeals) in his order while rejecting the books of account does not specify the defect in the record. The basis of the rejection appears to be best judgment of assessment done by him. The rejection of the books should precede the best judgment assessment. On facts, the Revenue has not been able to show any defect in the respondent's records which would warrant rejection of the books and making a best judgment assessment. Thus, on facts the view taken by the Tribunal is a possible view. Therefore, no substantial question of law arises. Thus not entertained." [Emphasis supplied] 21. The Division Bench of the Karnataka High Court in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... qua non before the AO proceeds to make his own assessment. Paragraph 4(c) of the said decision is reproduced as under:- "4(c). Therefore, it is sine qua non that the Assessing Officer to come to a conclusion that the books of account maintained by the assessee are incorrect, incomplete or unreliable and reject the books of account before the proceeding to make his own assessment. In the instant case, there is no reference in the assessment order of the Assessing Officer regarding rejection of books of account." [Emphasis supplied] 23. In the case of CIT v. Gian Chand Labour Contractors [2007 SCC OnLine P&H 1577], the Division Bench of the High Court of Punjab and Haryana while taking a similar view, has held as follows:- "8. Section 29 of the Act prescribes that the income referred to in section 28 which is assessable under the head "Profits and gains of business or profession" shall be computed in accordance with the provisions contained in sections 30 to 43A of the Act. Section 145 of the Act provides for computation of income under section 29 on the basis of books of account and the method of accounting regularly followed by the assessee. However, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9;ble Gujarat High Court in the case of Yunus Haji Fazawala Vs. CIT (supra) has held that action of the Assessing Officer in disallowing 25% of purchases by doubting its genuineness without rejecting the books of account cannot be sustained. The order of the Tribunal confirming the disallowance was accordingly reversed. Since in the instant case also the books of account are not rejected, therefore, action of the CIT(A) in deleting such addition is justified. Further we find merit in the findings of the CIT (A) that if the action of the Assessing Officer is accepted then profit of the assessee will be 32.9% for A.Y. 2013-14 and 56.09% for A.Y. 2014-15 which is illogical and absurd. Since the order of the CIT(A) on this issue is just and proper under the facts and circumstances of the case, therefore; we do not find any infirmity in the same. Accordingly the same is upheld and the ground raised by the revenue is dismissed." 27. Also, the decisions relied upon by the Revenue do not essentially support its case as the facts of the cited cases are strikingly different from the case at hand and therefore, the same are distinguishable. Though the decision of the Division Bench o....