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2018 (7) TMI 1167 - AT - Income TaxRejecting the books of account u/s 145(2) - addition on estimation basis @7% on account of construction receipts - Held that:- The undisputed fact remain that the assessee has failed to submit the quantitative details of the trading operations as well as details of construction activities carried out by him during the impugned AY. AR is merely harping on the point that the assessee was a listed public company and therefore, the books could not be rejected by Ld. AO and the profits could not be estimated by lower authorities. We are not convinced with the same since the complete onus to substantiate the financial results was on assessee which he has failed to discharge. Rather this argument put more onus on assessee to support the transactions carried out by him with documentary evidences and plausible explanation. Further, in terms of Section 44AA, the assessee was required to keep and maintain books of accounts and other documents as may enable the Ld. AO to compute the total income in accordance with the provisions of the act. Therefore, Ld. CIT(A), in our opinion, erred in shifting the onus upon Ld. AO to provide relief to the assessee since even the primary onus of substantiating the transactions remained un-discharged by the assessee. No quantitative details could be filed by the assessee with respect to trading done by him and further no details with respect to construction activities as called for by Ld. AO were furnished by the assessee. In such a situation, Ld. AO was left with no option but to reject the books and estimate the income of the assessee on some reasonable basis. The same is evident from the fact that Ld. first appellate authority has also confirmed the stand of Ld. AO in estimating the income from construction activities. So far as the Tribunal’s order for AY 2007-08 is concerned, we find that the same could not help the assessee in any manner since the matter is factual one and secondly, in that year, Ld. AO, by mistake, estimated the additions by invoking the provisions of Section 44AD/44AF, which is not the case here. Further, the status of assessment / appellate proceedings for intervening AYs i.e. 2008-09 to 2010-11 has not been placed before us to appreciate the position therein. Keeping in view the fact that the assessee is corporate assessee and subjected to statutory audits and therefore, the books could not rejected in a light manner, the matter stand remitted back to the file of Ld. AO for readjudication with a direction to the assessee to substantiate the transactions carried out by him by way of trading as well as by way of construction activities failing which Ld. AO shall be at liberty to adjudicate the issue on the basis of material / explanation available on record. The order of Ld. first appellate authority, to that extent, stands reversed.
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