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2017 (11) TMI 625 - AT - Income TaxRejection of books of accounts - Addition on account of the recoveries to be made by NSEL - Held that:- No specific defects in the maintenance of books of accounts by the assessee have been pointed out. The assessee filed copy of the ledger account of the assessee in the books of accounts of NSEL showing assessee has to recover margin money of ₹ 44.56 crores from NSEL and some amount is mentioned in the trail balance as due to the assessee, so there is no question of making any recovery against the assessee. The authorities below have made and confirmed the addition against the assessee because the assessee could not file confirmation accounts from NSEL as on the date. When the assessee was not Member of NSEL during the period from 01.08.2013 to 31.08.2013, the period the recovery, where is a question of filing confirmation from NSEL in this regard. If the AO wanted to make the addition of impugned amount against the assessee, the AO should have examined NSEL and M/s Sharp and Tannan Associates. However, the AO did not make any investigation from them so as to make any addition of the impugned amount against the assessee. Since the AO failed to make proper investigation into the matter and no basis have been shown for making the addition on account of the recoveries to be made by NSEL, the AO failed to discharge the onus upon him to make the addition of the aforesaid nature. There cannot be negative onus on assessee to prove it has not made purchases from NSEL in dispute. No evidence of any sham purchases/transactions have been brought on record. No evidence of any purchase made by assessee from NSEL have been brought on record. The above discussion clearly prove that the AO without any basis rejected the books of accounts of the assessee and without bringing any evidence or material on record, made the addition of the impugned amount. Even during the course of hearing of the appeal, the AO was present in the Court but could not provide any evidence or material so as to sustain the orders of the authorities below. In such circumstances, we do not find it appropriate to remand the matter to the AO for fresh investigation as is argued by the Ld. DR. No justification for the authorities to have rejected the books of accounts of the assessee u/s 145(3) of the Act or to make an addition of ₹ 338.40 crores. We accordingly, set aside the orders of the authorities below and delete the addition of ₹ 338.40 crores. Appeal of the assessee is allowed.
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