TMI Blog2012 (5) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... L) Revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 ( Act‟, for short) impugning the order dated 6.8.2010 passed by the Income Tax Appellate Tribunal ( Tribunal‟, for short) in the case of Winner Constructions Pvt. Ltd. The appeal pertains to assessment year 2006-07. 2. While issuing notice on this appeal vide order dated 31st May, 2011, the notice was limited to the following question of law: Whether the Tribunal erred in deleting the trading addition of Rs.42,88,000/- made by the AO after rejecting the books of accounts? 3. We have heard counsel for the parties and proceed to dictate our decision. 4. The Assessing Officer rejected the books of accounts inter alia recording the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be rejected on the ground that the gross profit disclosed in the books was low, in comparison with others in the same line of business. Low profit with other defect can justify rejection of books, Therefore, we have to examine the three reasons given by the Assessing Officer recorded above to determine whether or not the books of accounts were rightly rejected, but without ignoring the low profit rate. 6. With regard to the reason No.1, the assessee had given the following explanation to the Assessing Officer at the time of assessment : Project wise details. It is already on record that company is executing various Government projects at difference places and the same are managed by the common staff of the company. The company is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same reproduced hereunder:- Maintenance of project wise books of accounts is not mandatory as per Income Tax Act. We are maintaining books of account in Tally package which is a widely used accounting package. Since our present administration system is centrally controlled, hence accounting system is also not‟ maintained project wise. Our present system of account is such that the site supervisors maintain petty cash account for their respective sites which alone- is allocated project wise and all other direct expenditure for project is maintained centrally similarly, all indirect expenses are maintained centrally. As we are following mercantile system of account, there is no deficiency in our accounting system. Hence there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has recorded as under : 3.8 I have carefully considered the issue in dispute in the light of observation made in the assessment order and submission of the appellant. As regards the issue of non production of books- of accounts and in the light of various communications of the appellant and affidavit of the Chartered Accountant, I have called for the assessment record and it is noticed that the Assessing Officer has not mentioned in any of the hearing, claimed by the appellant, for production of books of accounts, that books of accounts were not produced and as such the contention of the appellant that books of accounts were produced is supported from the affidavit of the Chartered Accountant and letter dtd. 26112/07. However, the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for verification. In the light of above facts, there is no justification of the Assessing Officer to draw adverse inference and to reject the books of account to make estimate in respect of trading results. Further, as the accounts were maintained in conformity with the past history and in the absence of any specific mistake or irregularity, there is no ground to dispute correctness of trading results on the basis, of this issue. The findings recorded by the CIT(Appeals) have been affirmed by the Tribunal. 8. The aforesaid findings recorded by the appellate authority are factual and Revenue has not been able to show on what basis or reason the same can be challenged/questioned. 9. The second aspect pertains to failure to show closing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. In these circumstances we do not find any error in the order of the Tribunal accepting the plea of the assessee and rejecting the appeal filed by the Revenue. 11. The last aspect raised by the Revenue pertains to unclaimed/unaffirmed balances. In the assessment order the Assessing Officer has stated that balances of some parties had remained unconfirmed. The Assessing Officer has not given full details/ particulars of the said parties who had not confirmed the balances. He referred to the notice sent to Dhanishta Builders under Section 133(6) of the Act. Two alleged discrepancies in the balances of Vardhaman Traders and Dhanishta Builders were recorded. Against Vardhaman Traders there was balance of ₹ 3,17,012/- but no purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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