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2016 (4) TMI 698 - ITAT JAIPUR

2016 (4) TMI 698 - ITAT JAIPUR - TMI - Rejection of books of accounts - estimation of profit - Held that:- The assessee's plea that books of account should not have been rejected u/s 145(3) which is devoid of any merit as nowhere it has been claimed that expenses vouchers were produced by the assessee before any forum. Thus the deficiency remains un-controvered by the assessee, consequently the books of account of the assessee are rightly rejected.

Apropos assessee's plea that having .....

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g receipt above ₹ 40 lacs. The assessee's case is within the purview of Section 44AD of the Act by operation of law itself. The assessee's deliberate act of maintaining audited books of account and deliberately not producing expenditure vouchers cannot be taken lightly. No explanation has been offered by the assessee as to why expenditure vouchers could not be produced by him. Thus the act of defiance demonstrate reckless attitude of the assessee which cannot be accepted. The case laws cit .....

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This is an appeal filed by the assessee against the order of the ld. CIT(A), Ajmer dated 10-01-2013 for the assessment year 2008-09 wherein following grounds are raised. 1. On the facts and in the circumstances of the case, even otherwise if books of account are rejected, it implies that the books results are not reliable. Then the AO shall have to make assessment to the best of his judgment in the manner provided u/s 144 as per Section 145(3) of the I.T. Act, 1961 and although appellant firms c .....

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vil construction, being as per I.T. Act civil construction u/s 44AD includes:- (a) the construction or repair of any building, bridge, dam or other structure or any canal or road. (b) the execution of any work contracts The ld. CIT(A) has further erred in sustaining addition when he has not upheld rejection of books of account u/s 145(3) of the I.T. Act made by the AO observing that neither total receipts nor any other expenses have been shown to be incorrect by the AO. 3. On the facts and in th .....

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business of rigging bore wells for govt. agencies and private parties. The assessee filed return of income on 30-09-2008 on the basis of audited books of accounts, declaring total income at Nil which was processed u/s 143(1) of the I.T. Act. The case of the assessee was selected for scrutiny through CASS. During the course of assessment proceedings, the AO observed that the assessee has declared total receipts from Govt. and Private work of digging of tube well and boring at ₹ 56,13,382/- .....

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s of account of the assessee firm and made a disallowance of ₹ 10,91,860/-. 2.2 Aggrieved, the assessee preferred first appeal before the ld. CIT(A) wherein it was contended that when the books of accounts are rejected then only gross profit should have been estimated and disallowance of expenditure was unjustified besides merits of the disallowance was challenged. The ld. CIT (A) after considering the reply and material available on record upheld the rejection of books of accounts. The as .....

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spect of diesel machinery expenses by reducing it from ₹ 8,74,246/- to ₹ 2,91,415/-. Other disallowances were upheld by the ld. CIT(A). 2.3 Aggrieved, the assessee is in second appeal wherein the ld. AR of the assessee reiterated the facts and contentions as raised before the lower authorities and further contends that :- (i) The rejection of books of account is unjustified. Once the books of account of the assessee are rejected then the AO is supposed to make a fair estimation of gr .....

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ollowing case laws. (i) N. Ramchandra Reddy (ITA No. 1372 of 2007 - Hyd Bench (ii) Subodh Gupta ITA No. 80/2014 dt. 9-12-2014 Del. H.C. (iii)Mahesh Chand Contractor ITA No. 138/Agra/2012 Agra (iv) Choudhary & Brother 135 TTJ (JP) (UO) 55 (v) Ashok Jain Kota vs. DIT (decided on 13-02-15) (vi) M/s. Ved Prakash Pareekk vs. ITO (TW Vol. 39 Pager 176 (vii) M/s. Vijay Builders Jaipur (TW Vol.III Part 3 page 93) (viii) Jaswant Singh Contractor vs. ITO (ITA No. 1109/Chd/2011 - ITAT Chandigarh) (ix) .....

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es assessee has not given any reason as to why the expenditure vouchers only could not be produced. Thus there is a mysterious advantage to assessee in not producing the expenditure vouchers in question, for which assessee cannot derive advantage out of such infirmity. (ii) In the absence of vouchers, the AO was left with no choice except to reject the books of account to determine proper taxable income of the assessee. Therefore, rejection of books of account being only choice which has been ri .....

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computation of proper income was non furnishing the expenditure vouchers consequently ld. AO disallowed reasonable part of expenses to assess proper income on his best judgment. Therefore, the AO was within his legal rights to recourse the disallow expenditure. The ld. CIT(A) has upheld the line of action of the AO however he has been generous in awarding substantial relief in machinery and diesel head. (iv) The assessee's plea that Section 44AD should be taken as analogy to this case. The .....

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ased on material facts available on record. 2.5 I have heard the rival contentions and perused the materials available on record. I find merit in the contentions of the ld. DR. The assessee's plea that books of account should not have been rejected u/s 145(3) which is devoid of any merit as nowhere it has been claimed that expenses vouchers were produced by the assessee before any forum. Thus the deficiency remains un-controvered by the assessee, consequently the books of account of the asse .....

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