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2018 (3) TMI 381

assessing officer to produce the books of accounts on several occasions. The assessee has not come out with the clean hands by producing the books of accounts. Therefore, it is clear from the records that assessee did not wish to produce the books of accounts. According to us, if the books of accounts are not produced, there is no option left with Ao other than to estimate the net profit of the business of the assessee. Therefore no fault can be found with the Ld. assessing officer in applying the provisions of section 145 (3). Decisions relied up on by the assessee are perused and it is found that in all those years the assessee produced the books of accounts and AO verified it. However in the facts in this case are startling that assessee .....

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ssment Year 2011-12 wherein appeal filed by the assessee against the order of The Income Tax Officer, Ward - 38 (2), New Delhi [ the LD AO ] dated 29/03/2014 under section 143 (3) Of The Income Tax Act 1961 [the Act ] was dismissed. 2. The assessee has raised following grounds of appeal i. The Ld. AO has grossly erred in passing assessment order by making incorrect and unwarranted allegations against the assessee and without giving reasonable and fair opportunity to the assessee to present its case. ii. Under the facts and circumstances of the case, the Ld. 1st appellate authority has grossly erred in confirming the action of the Ld. AO rejecting the books of accounts of the assessee under section 145 of the act, which is grossly injudiciou .....

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profit and loss account amounting to ₹ 9.51 crores and shown net profit of ₹ 19.78 Lacs out of gross contract receipt of ₹ 9.71 crores for which no documentary evidences produced or furnished by the assessee. He further held that assessee has not produced any stock register as evidence of receipt of the quantity and quality of the raw material. It was further noted by him that the closing stock has also been accepted based on the self declaration of the proprietor, therefore opening and closing balance of stock is not verifiable. Therefore, the Ld. assessing officer rejected the books of accounts applying the provisions of section 145 of The Income Tax Act and rejected the book results of the assessee. He consequently est .....

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was appearing before the Ld. assessing officer. Therefore, the first contention of the Ld. authorized representative was that despite presentation of the books of accounts before the Ld. assessing officer he rejected them without verification. With respect to the rejection of the books book results, ld AR submitted that for the past assessment years the net profit ratio of the assessee is in the range of 2.04% to 2.66%. He submitted that assessment of the appellant for the past year has been concluded under section 143 (3) of the act. He submitted that books of accounts were duly accepted by the Ld. assessing officer and the net profit ratio of 2.23% were accepted. He further submitted that merely because the books of accounts were not prod .....

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2012 and various other notices were issued, including show cause notice however assessee has not produced the books of accounts. In view of this the Ld. assessing officer has correctly rejected the books of accounts applying the provisions of section 145 (3) of The Income Tax Act. With respect to the estimation of the net profit at the rate of 8%, she submitted that when the books of accounts were not produced by the assessee in this year before the assessing officer for verification of the book results, assessee could not take shelter under the pretext of the earlier year s or subsequent assessment year s assessment orders. In those assessment years, books of accounts have been produced. In view of this it was her submission that net profi .....

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bmitted that ld AO did not grant any opportunity to the assessee to explain and produce material. However, it is apparent that assessee has neither produced the books of accounts before the Ld. assessing officer and even that opportunity was not availed before the first appellate authority. Assessee has merely made certain submissions despite specific request by the Ld. assessing officer to produce the books of accounts on several occasions. Even before us, the assessee has not come out with the clean hands by producing the books of accounts. Therefore, it is clear from the records that assessee did not wish to produce the books of accounts. According to us, if the books of accounts are not produced, there is no option left with Ao other th .....

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lso too high in case of the business of the civil construction for this year compared to the assessment history of other years of the assessee. No reasons have been given by the assessing officer for estimating the net profit at the rate of 8%. No comparative instances have also been cited. Further even in section 44AD for the small business where the turnover is less tha 60 lakhs , rate of profit is 8 %. In the present case the assessee has turnover of more than 9 croes therefore such a high rates cannot be applied to the business of the assessee. Hence, looking to the facts and circumstances of the case and in fairness of the things, no injustice would be caused if the net profit of the assessee were estimated at the rate of 5% of the gro .....

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