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2012 (8) TMI 229 - AT - Income TaxRejection of books of accounts - assessee has not been submitting the daily report to the Market Committee which were required to be submitted as per agreement with the Market Committee - AO accordingly, rejected the books of account by invoking the provisions of section1 145(3) of the Act As regards the employment of 34 persons - no material in the possession of the AO to support the factum of employment of 34 alleged employees by the assessee - no work done by them. There was no question of any payment of any salary to them for any alleged work in the contract business. No collection of market fee or RDF has been brought on record by the AO – AO not justified in rejecting books of accounts of the assessee As regards the commission income - assessee was not required to maintain books of account in respect of collection of Market fee and RDF and since the payments are collected in the name of Market Committee, they are deposited with the Market Committee only. All the details for the collections which were tallied weekly were available with the AO – Held that:- Collections made from commission agents till the amount of the contract entered is not the income of the assessee and, therefore, the assessee is not required to maintain books of account with regard to income of other persons. Therefore, the books of account to that extent cannot be rejected by the A.O - no estimation of income can be made Assessment under section 144 of the Act – Held that:- AO is not justified in making any addition to the income of the assessee, even if the books of account are rejected u/s 145(3) of the Act, on the basis of the material on record, which was available before the AO as well as before the ld. CIT(A). The Ld. CIT(A) is not justified in sustaining the addition on this account. Penalty under section 271(1)(c) of the Act - on concealing the income and furnishing inaccurate particulars of income – Held that:- When no addition remains in pursuance of order mentioned hereinabove, no penalty u/s 271(1)(c) can be sustained - no infirmity in the order of the ld. CIT(A), who has rightly deleted the addition
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