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2016 (10) TMI 705 - ITAT JAIPURRejection of books of accounts - Held that:- The assessee has furnished the Daily Stock Account of Copper Scrap and also the Job Work done by M/s. Kwality Tubes & Capillaries along with reference of challan, quantity, production loss etc. the assessee has also filed copy of RG 23A Register demonstrating that all the transactions were duly recorded. The assessee has also given ledger account of conversion charges of sister concerns and also copy of Form No. 16A. In respect of difference in conversion charges as per TDS Certificates and what was debited, it is stated that the difference of ₹ 19,30,603/- is due to the Credit of CENVAT included in the goods sent for job work and goods received from job work through the credit notes received from M/s. New India Extrusions Pvt. Ltd. on which though TDS is deducted but not debited to Conversion Charges A/c but to CENVAT Credit A/c. The difference of ₹ 2,77,796/- is due to the Credit Note of Discount received from M/s. SAM Enterprises on 31.03.2009 but on which TDS was already deducted earlier. Thus there is no error and difference of ₹ 22,08,399/- (1930603+277796) is reconciled. It is stated that these credit notes were produced before the AO but were not understood by the AO. It is stated that these objections of the AO that the difference could not be explained is contrary to the facts. It is further stated that books of accounts were duly submitted before the AO as the AO himself has noted in the assessment order that books of accounts, bills and vouchers etc. were examined on test check basis. We find that the AO has noted that in spite of repeated opportunity, the assessee has not submitted the books of account after the date 9.9.2011 on which the assessee was required to justify the defect as mentioned above to cross verify the contention of the assessee. We find force in the contention of the ld. Counsel for the assessee that assessee had submitted plausible explanation to the defects as pointed out by the AO. We also noticed that in the paper book the assessee has given certificate that except document at sl. No. 10, all other documents were part of the record of the lower authorities. Therefore, it can be inferred that these materials were available before the AO. The AO has not given any finding on this evidences, therefore, in our considered view, the AO was not justified in rejecting the books of account without properly examining the same and giving a specific finding on the material so placed before him. The books of account cannot be rejected in a casual manner and proceed to estimation of GP merely on the basis of past history of the assessee. If the assessee is able to demonstrate that the facts and circumstances were different from the earlier years resulting into fall in GP ratio, the GP rate adopted by the AO on the basis of past history would not be a better guide. After considering the totality of the facts and circumstances of the case, we are of the considered view that the AO was not justified in rejecting the books of account.
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