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TMI Blog2018 (7) TMI 2085X X X X Extracts X X X X X X X X Extracts X X X X ..... by AO against accepting fresh evidence under Rule 46A of the Income Tax Rules and without bringing on record the sufficient cause under Rule 46(1)(ii) that prevented the appellant from producing any evidence before the AO? 2. Without prejudice to the above question of law the following questions of law are being filed: a. Whether on the facts and in circumstances of the case and in law the Tribunal can accept the books of accounts of the assessee even when the net profit rate and the sales shown are at variance with the net profit rate and sale declared as presumptive income in its income tax return which has never been revised by the assessee? b. Whether the assessee can declare its presumptive income u/s 44AD declaring N.P. rate @ 14.99% of gross receipts in its income tax return and claim lower N.P. rate and higher turnover, subsequently, without filing a revised return? 3. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was justified in upholding the rejection of books of accounts of the assessee particularly when the assessee filed return of income u/s 44AD and even after 9 opportunities in over 19 months they were not produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the copies of such audited accounts along with confirmations from parties from whom major purchases had been made. The assessee also pointed out various inter-transfer entries related to transfer of funds amongst various bank accounts held by the assessee. The assessee requested for considering the above evidences as fresh evidences as per Rule 46A. Vide letter dated 25.01.2016, a Remand Report was called for from the AO requesting him to examine the entire evidences and confirmations furnished by the assessee. The AO submitted the Remand Report dated 7.7.2016 from which it is seen that the AO has verified only the transfer entries and has submitted that claim of inter-transfer entries to the extent of Rs. 26,29,818 are found to be correct. The AO has however not given any comments regarding the nature of cash deposits, the subsequent RTGS payments for purchases of chicken feed and chicken by the assessee as well as the other additions made by the AO and the justification thereof. In the absence of complete verification by the AO, all elevant facts were freshly examined during the appellate proceedings. It is firstly observed that the fresh show-cause notice asking the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 11. Regarding the difference of Rs. 96,71,902, the ld CIT(A), after taking into consideration the remand report of the AO, has accepted the said difference except for an amount of Rs. 12,05,000 which as per assessee represent opening cash and debtor balances. As per ld CIT(A), these opening balances are not verifiable in absence of books of accounts for the previous years. Per contra, the ld AR submitted that assessee was engaged in the business from last so many years and was regularly filing ITRs, the financials of year 2010-11 was duly audited by a Chartered Accountant, third party confirmation from the debtors and cash book was duly submitted and books of accounts for the preceding years was maintained and the income was reported u/s 44AD of the I.T.Act. As per auditor's report, we find that the auditors have categorically stated that "this is the first year of audit, opening balance are taken as certified by the proprietor with due confirmation from the bank statement". Given that, we are of the view that matter will require examination of the said contentions so raised by the ld AR and accordingly the matter to this limited extent is remanded back to the file of the AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts and got them audited. At the same time, we find that there are adequate documentation to support the purchase and sales made during the year in terms of ledgers, invoices and purchase confirmations. Further, no specific defect has been highlighted by the ld CIT(A) in respect of other expenses claimed by the assessee. Given the peculiarity of the facts and circumstances of the case, we are of the view that the ld CIT(A) was not correct in rejection of books of accounts and estimating the net profits in hands of the assessee relating to the impunged assessment year. 13. In light of above discussions, the book results and net profit so declared by the assessee is hereby accepted except for verification of opening balances of cash and debtors for which the matter is being setaside to the file of the AO. In the result, sole ground of revenue's appeal is dismissed, ground no. 2 of assessee's appeal is allowed for statistical purposes and ground no. 3 of the assessee's appeal becomes infructuous in view of results declared as per books of accounts being accepted. 14. Regarding Ground no. 1 of the assessee appeal, the same was not pressed during the course of hearing. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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