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TMI Blog2015 (6) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... he following Grounds of appeal:- "1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) has erred in deleting the GP addition and directing the AO to accept the profit declared by the assessee without appreciating the fact that the AO has rejected the Books of Account as the assessee was unable to furnish the basic details before the AO and also disregarding the fact that consequent to rejection of books of accounts, the profit was estimated on the basis of comparables. 2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) has erred in restricting the disallowance of Rs. 16,03,731/- to Rs. 3,00,000/- without considering the fact that the assessee firm had itself disallowed the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived during the year and passed the Assessment Order on 14.12.2009. Aggrieved, assessee carried the matter in appeal before the first appellate authority. 4. During the proceedings before the CIT (A), it was contended that the Assessing Officer‟s action in rejecting the books of account of the assessee u/s 145(2) as well as the estimating the Net Profit rate of 2.50% are without any basis. It was further contended that in the absence of any finding or conclusion that the books of account maintained by the assessee are not correct or incomplete, the same could not be rejected by the Assessing Officer. For this proposition, assessee relied on various precedents and some of them are (i) Pandit Bros. Vs. CIT [1954] 26 ITR 159 (Punj.); ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant as examined by the Auditor and on the basis of which examination the Audit report and form No.3CD have been prepared by the Auditor. In fact, the Auditor has examined all the "branch books‟ as per column 9(b) and (c) of the report in form No.3CD and the Annexure-II to it - and in which the cash book ledger, party ledger and journal of the head office and branches from Sl.No. 2 to 35 of the Annexure are mentioned - thereby stating that the Auditor has examined all the books of these branches and not found anything adverse so as to require a comment or qualification in the report in From No.3CD. Further, even as regards the depreciation in column no. 14 of the report in Form No.3CD, the auditor has given details as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly, on this Ground assessee succeeds. 9. Ground no.2 relates to the restriction of a disallowance of Rs. 16,03,731/- to Rs. 3,00,000/-. Briefly stated, relevant facts in this regard are that during the course of assessment proceedings, assessee was asked to furnish the requisite details with regard to maintenance of accounts, depreciation charge on truck, profitability of trucks, compliance of TDS and vouchers for trucks hired from outside. Not being satisfied with the explanation of the assessee, Assessing Officer rejected the books of account of the assessee as well as the claim of the assessee and estimated the freight charges received during the year @ 2.50% hypothetically by considering the Net Profit of the two comparable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharging such onus, the action taken by the Assessing Officer in rejecting the books of account of the assessee u/s 145(2) and resorting to ad-hoc disallowance cannot be found fault with. 14. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On perusal of the CIT (A)‟s order in general and paras 4.4 and 5.2 of his order in particular are relevant in this regard. Considering the importance of the said order of the CIT (A), we find it relevant to extract the said paras for the sake of completeness of this order and the same are as follows: "4.4. I have considered the submissions of the Ld Counsel and it is seen that the appellant has complied, by and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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