2026 (4) TMI 1037

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....ssue raised in ground nos.3 to 5 is against the confirmation of addition of Rs.3,06,54,586/- by ld. CIT(A) as made by the ld. AO by applying 8% on the total turnover when the suppliers failed to response to notices issued u/s 133(6) of the Act. 4.1. The facts in brief are that the assessee filed the return of income on 11.10.2022, declaring total income at Rs.2,86,92,950/-. The case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS), for three reasons namely; i) creditors more than 50% of the purchases, ii) taxable receipts from other sources shown in TDS 2, is higher than the receipts shown in the ITR, and iii) high liability as compared to low income/ receipt in ITR. The statutory notices along ....

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....mained unverifiable. The ld. AO accordingly rejected the books of accounts of the assessee u/s 145(3) of the Act and estimated to the profit at the rate of 8% on the total turnover of Rs.38,31,82,335/-, which comes to Rs.3,06,54,586/-. The ld. AO after allowing the business income as declared in the ITR a net addition of Rs.2,49,74,293/- was made vide order dated 22.03.2024, passed u/s 143(3) of the Act read with section 144B of the Act. 4.3. In the appellate proceedings, the ld. CIT (A) also upheld the order of the ld. AO by holding that the assessee has not furnished the records to substantiate the physical delivery of goods for the purchases and accordingly, justified the addition. After hearing the rival contentions and perusing t....

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.... not replied and thereafter the books of accounts of the assessee were rejected on the ground that the assessee has not furnished the documents/ correct supporting evidences to substantiate the business, purchases, sales, expenses, unsecured loans and other business related transactions during the year and therefore the books were rejected and the profits were estimated by applying the rate of 8% on the total turnover thereby estimating the income on the turnover at Rs.3,06,54,586/-. After allowing the deduction of business income as declared in the return of income of Rs.56,80,293/- a net addition of Rs.2,49,74,293/- was made by the AO. The ld. CIT (A) simply confirmed the order of the ld. Assessing Officer. 4.4. We note that the additi....