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2019 (7) TMI 742 - AT - Income TaxAddition being increase in the net profit by rejecting books of account u/s 145(3) - HELD THAT:- It is the case of the assessee that as per the accepted accounting principles as applicable to the construction business, the cost is required to be estimated at the end of each year on the basis of technical estimation and after estimating the project cost, the assessee is required to determine the cost of sale to be charged profit and loss account against the sale value. The sale value has been recognized on a percentage completion basis regardless of pendency in completion of work of the project. We however find that while adjudicating the issue, the approach of the CIT(A) appears to be quite generic and devoid of objectivity. While pointing out some errors of lesser impact here and there, the CIT(A) has not compared the project-wise working as per the assessee and as per the AO to locate the area of difference. In the absence of any additional evidence, we do not see any ostensible reason for AO to redo the same exercise based on some submissions of the assessee. The onus was equally placed on the assessee to point out exact area of difference and explanation thereon. CIT(A) has apparently abdicated his responsibilities and shifted the onus again on the AO without any cogent reason. In the absence of objective comparison available for the resultant profits declared by the assessee and computed by the AO, we consider it befitting and expedient to restore the matter back to the file of the CIT(A). CIT(A) shall call for the comparative analysis and other factual details and look into all the aspects afresh objectively and in accordance with law. Needless to say, proper opportunity shall be provided to assessee in this regard. The issue is accordingly set aside to the file of the CIT(A) for de novo adjudication. While coming to aforestated conclusion, we also take note of the objection raised on behalf of the assessee for rejection of books by invoking Section 145(3). However, we are unable to notice any such objection has been raised before lower authorities. In the Revenue’s appeal, it will be difficult to appreciate such technical aspect without notice to other side. Thus, such ground requires to be shunned. Be it as it may, we find that the AO has given a very detailed working for determining true profits and consequent defect in the determination of profits. Thus, we do not find any substance in such objection. - Appeal of the Revenue is allowed for statistical purposes.
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