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2019 (8) TMI 114 - HC - Income TaxRejection of Book u/s 145(3) - cash sale of silver - allegation of providing accommodation entry - AO hold that “there was no silver at all and the story of purchase and sale of silver is entirely concocted” - HELD THAT:- In the present case the sales of over ₹ 30 crores in one case and ₹ 40 crores in another being put forth entirely as ‘cash sales’ had no valid basis in the books of accounts. It was obligatory on the Assessees to satisfactorily account for the creditworthiness, identity and genuineness of the transactions of the so-called providers of such cash to each of them in such huge sums. Plainly this was not forthcoming and the AO rightly therefore disregarded the accounts of both Assessees u/s 145 (3). The satisfaction recorded by the AO in the present cases that the books of account maintained by each Assessee deserved to be rejected cannot, in the circumstances, be said to be perverse. In Kachwala Gems Jaipur v. JCIT [2006 (12) TMI 83 - SUPREME COURT] it was held that the AO can reject the assessment u/s 145 (3) if he finds that there are defects in the books of accounts and where bogus purchases are shown by the Assessee in order to reduce gross profit. In the present cases, the discussion of the evidence on record both by the CIT (A) and the ITAT is found to be cryptic and without adverting properly to the facts referred to by the AO. - In the considered view of the Court, the AO rightly rejected the books of accounts of both Assessees and the additions made by him are required to be restored. - revenue appeals allowed
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