TaxTMI 
TaxTMI 
2026 (8) TMI 1267
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....4, arising out the assessment order dated 24-03-2025 under section 144 r.w.s. 144B of the Income-tax Act, 1961, (in short 'the Act'). 2.The revenue has raised the following grounds in appeal as under:- (i) The Ld. CIT(A) erred in law and on facts by deleting the addition without considering assessee failed produce complete correct information/accounts/documents in response to notice issued u/s 142(1). Such non production of information /accounts/ documents prevented the Assessing Officer (AO) from verifying the correctness and completeness of the accounts, which is a specific perquisite for rejection under section 145(3). (ii) The Ld. CIT(A) erred in labeling the 8% estimation as arbitrary. The Revenue contends that the....
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....t/ taxable income. Therefore, the reason for the low net profit shown may be verified." Notice under section 143(2) of the Act was issued on 19-06-2024. The Assessing Officer completed the assessment after making the addition of Rs. 7,97,73,582/- the 8% Estimated income on the total turnover after rejecting the books of account under section 145(3) of the Act. According to Assessing Officer the notices under section 133(6) of the Act was issued to the few persons but no response was received to the department from them. 4. Aggrieved the order of the ld. AO the assessee preferred the appeal before the Ld. NFAC, who vide his order dated 08-12-2025 partly allowed the appeal of the assessee. The Ld. CIT(A) observed in his order as under: ....
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.... any attempt to distinguish between gross receipts and actual income, nor has any comparable industry data or analysis been provided to justify the 8% estimation. The application of a fixed percentage without proper justification is arbitrary and not supported by facts. Further, the Assessee claims that the AO has not discussed any of the documentation provided, nor has any explanation been given for disregarding the evidence. This is contrary to the requirements of a reasoned order and violates the principle of fair hearing. It is noted that the books were maintained in accordance with the Companies Act, duly audited u/s 44AB of the Act and no specific defect or irregularity has been pointed out by the AO. The AO neither raised an....
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.... and the assessee was explained before the Assessing Officer not to file the reply by those persons. He further submitted that to reject the books of account the Assessing Officer should bring out that there has been a clear infringement of any accounting principles, only assumptions basis the books of account cannot be rejected. He also submitted that in this case the Assessing Officer rejected the books of accounts on the assumptions, basis. Reliance is placed on the following judgement (i) Commissioner of Income tax -VIII v. Paradise Holidays [2010]195 Taxman 291 (Delhi) Hon'ble Delhi High Court (ii) Commissioner of Income-tax-XII v. Smt. Poonam Rani [2010] 192 Taxman 167 (Delhi) Hon'ble Delhi High Court (iii) ....