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2018 (8) TMI 265 - ITAT DELHIAddition on account of estimated excess consumption - rejection of books of accounts u/s 145(3) - Held that:- AO accepted book result of the assessee in preceding and subsequent Assessment Years 2007-08 and 2009-10 in scrutiny assessment u/s 143(3) of the Act and no additions of similar nature have been made. In Assessment Year 2010-11 also, AO accepted the book result of the assessee, as submitted, u/s 143(3) of the IT Act. Therefore instead of re-casting the trading account per month, AO should have brought some independent and concrete material on record to reject book results in Assessment Year in appeal. AO issued a show-cause notice for rejection of books of account on 29.12.2010. The assessee filed the reply as well as document and produced the books of account before the AO immediately on 31.12.2010, denying the allegation of the AO. The AO instead of appreciating the explanation of the assessee in a proper perspective with reference to the material available on record passed the assessment order on the same day on 31.12.2010. AO without verifying the fact from the books of accounts of the assessee and record nature of business of the assessee rejected the books of accounts without any just reasons. The reasons given by the AO were based only upon the data supplied by the assessee. AO on the basis of details supplied by the assessee prepared trading account monthly and also re-casted the stocks and other items for the purpose of rejecting the book result of the assessee. AO without bringing any material fact against the assessee on record made the addition against the assessee. It appears to be a case of hypothetical calculations made by the AO on the basis of entries in the books of accounts for making the additions against the assessee without any justification. Further, AO has not pointed out if assessee violated any accounting standards prescribed by rules for maintenance of books of accounts. It is a case of hurried assessment framed by the AO without verifying the facts from the record of the Revenue Department particularly when in preceding and subsequent assessment years, the similar claim of assessee have been accepted by the AO. CIT(A) on proper appreciation of facts and material on record correctly did not agree with the findings of the AO. During the proceeding before Tribunal, no material have been produced to rebut the findings on fact recorded by the Ld. CIT(A) in favour of the assessee - No justification for the AO to reject the books of accounts u/s 145(3) of the Act or to make the addition. - decided in favour of assessee
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