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TMI Blog2017 (8) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... led its return of income on 30.09.2008 showing Nil income. It is engaged in the business of export of fabrics, readymade garments and job work. The ld AO has gave many opportunities to the assessee for producing the books of account and relevant Page 2 of 8 details for the purpose of assessment, however the assessee for the reason best known to it did not produce the relevant details. Finally the assessee was asked to provide various details of 16.12.2010 in the form show cause notice in response that to the assessee did not file details properly. In view of this the ld AO made an addition of Rs. 10988389/- to the total income of the assessee and passed assessment order u/s 144 of the Income Tax Act, 1961, invoking the provisions of section 145(3) of the Act then determined the total taxable income of Rs. 11506820/- Against this the assessee preferred an appeal before the ld CIT(A) who considered the submission of the assessee deleted the addition as under:- "5. I have carefully considered the submissions made by the Ld. AR and have gone through the assessment order. I have also considered relevant primary evidence filed/ produced by the appellant before the A.O. I have also peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is bound to make the assessment to the best of his judgment. In other words, if a person fails to make the return required by a notice under section 22(2) and he has further not made a return or a revised return under section 22(3), the Income-tax Officer must make an assessment under section 23(4). Similarly, if the person fails to comply with all the terms of a notice issued under section 22(4) or if he fails to comply with all the terms of a notice issued under section 23(2)" In CIT Vs. Esufali (HM) [1973](90 ITR 271 at 276) the Hon'ble Supreme Court has explained the distinction between that 'best judgment1 and regular assessment as follows:- "The distinction between a "best judgment" assessment and assessment based on the accounts submitted by an assessee must be borne in mind. Sometimes there may be innocent or trivial mistakes in the accounts maintained by the assessee. There may be even certain unintended or unimportant omissions in those accounts; but yet the accounts may be accepted as genuine and substantially correct. In such cases, the assessments are made on the basis of the accounts maintained even though the assessing officer may add back to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of manufacture and sale of readymade garments. Keeping in view the past history of the case, there is no reason for treating these sales as unexplained. As a result, entire addition of Rs. 72,76,6847- is deleted 5.2 I have also consid ered the evidence filed by the appellant with the Assessing Officer in support of the the source of capital introduced by the partner of the appellant firm namely Sri Munish Kumar. It is noted that Sri Munish Kumar has withdrawn cash from his account No. 051621431 at HSBC Bank (as proprioter of m7s V.M.Enterprises) on the following dates which has been re-deposited in the account of the appellant firm as capital: Date Particulars Amount 04.10.2007 Cash 1,10,000 08.10.2007 Cash 1,00,000 18.10.2007 -do- 1,00,000 20.10.2007 -do- 1,00,000 22.10.2007 -do- 1,50,000 30.10.2007 -do- 2,00,000 08.11.2007 -do- 50,000 27.11.2007 -do- 1,00,000 14.12.2007 -do- 1,50,000 03.01.2008 -do- 1,00,000 15.01.2008 -do- 1,00,000 1 7.01.2008 -do- 3,00,000 Total 15,60,000 The AO has not controverted the fact that the aforesaid partner injected the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Balance Sheets for F.Y. 2006-07 & 2007-08. I find that the opening balance of advances to builders as on 1.4.2007 is Rs. 60.92 and the end of the Financial year 2007-08, it has increased by about Rs. 7.50 lakhs only as under:- 2007 31.3.2007 2008 31.3.2008 Investment's Parsavnath(Gomit Nagar) 14,81,792/- 18,88,062/- Parsanath (Jaipur) 4,09,500/- 4,09,500/- ParsavnathfMohan Estates) 6,94,838/- 10,44,413/- Parsavnath (Prestige) 35,06,011/- 35,06,011/- Total 60,92,141/- 68,47,986/- However, on the liabilities side of the Balance sheet for Financial Year 2007-08, I find that the partner's Capital has increased from 603 lakhs to 618 lakhs. The Bank loan of Rs. about 82 lakhs is by way of packing credit. During the year the overdraft balance with Canara Bank has increased by Rs. 1.96 lakh only (5.57-3.61) (Pg. 18 of P.B.). It is therefore noted that almost the entire overdraft is on account of packing credit for exports. This year, the increase in investment in real estate is about Rs. 8 lakhs + 2 lakhs of overdraft in Canara Bank. The Partner has injected Rs. 17 lakhs by way of additional capital, which according to the AO himself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly submitted that the ld CIT(A) has believed the version of the assessee without confirming the facts that how the assessee has not produce the relevant details before the ld AO. Even otherwise the ld CIT(A) according to him has not called for any remand report from the AO he therefore stated that the order passed by the ld CIT(A) is as such unsustainable in law. 5. Despite notice none appeared on behalf of the assessee. On earlier occasion on 20.02.2017 and 29.05.2017 the case were fixed for hearing but were adjourned on the request of ld DR on the appointed date of hearing none appeared on behalf of the assessee and therefore this appeal is disposed off on the basis of information available on record. 6. We have carefully considered the rival contentions and also perused the orders of lower authorities. The ld AO has given amply number of opportunities not less than 15 times and compliance from the side of the assessee was minimal or none. Therefore, the ld AO made an addition by invoking the provisions of section 145(3) of the Act u/s 144 making the above impugned addition. Before the ld CIT(A) assessee submitted that there was a reasonable cause for not appearing before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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