TMI Blog2023 (1) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... see that the gross profit declared during the year compares higher than the gross profit in the earlier year whereas some marginal drop in the net profit has happened on account of higher depreciation and interest on loan for acquisition of fixed assets. Hon ble Delhi High Court in the case of Paradise Holidays [ 2010 (4) TMI 111 - DELHI HIGH COURT] has enunciated the circumstances where invocation of Section 145(3) would not be justified. AO in the present case has not shown as to how audited the books of account maintained by the assessee are incorrect or otherwise incomplete which is likely to vitiate the true profits of the assessee. It is also not the case of the AO that entries in respect of certain transaction are altogether omit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee seeking to assail additions of Rs.33,11,185/- confirmed by the CIT(A) on account of fall in net profits. 2. Briefly stated, the assessee is engaged in the business of manufacturing of rough iron forgings and machining parts of vehicles. A survey under Section133A of the Act was carried out on 20.12.2012 where certain disclosures were made by the assessee. The Assessee filed return of income declaring Rs.2,78,37,670/- for the Assessment Year 2013-14 in question which was subjected to scrutiny assessment. The Assessing Officer while framing the assessment inter alia made certain additions on account of lower net profits percentage by invoking Section 145(3) of the Act. The amount of addition was subsequently revised under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly preceding year is very marginal. The net profit for the year is 6.15% whereas the net profit in the earlier year was 6.52%. Thus, in such a scenario, it is difficult to explain such variation in net profit with any arithmetical precision. The turnover reported during the year is Rs. 90.30 crore on which the profit of Rs.5.49 crore has been declared. The CIT(A) himself in paragraph 18 of the appellate order admitted the fact of slight decline in net profit. The Assessing Officer has not pointed out any specific defect or discrepancy or any abnormal variation in various expenses. The sole basis for making such estimated addition is that original bills and vouchers were not produced before the Assessing Officer and thus the completeness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of original bill of particular transaction specifically. The ld. counsel thus contended that the endorsement of the action of the Assessing Officer by the CIT(A) is casual and contrary to the factual matrix as well as the legal position enunciated by the Hon ble Delhi High Court in the case of CIT vs. Paradise Holidays (supra) and other judgments. The ld. counsel thus urged for indulgence of the Tribunal in respect of such unjustified addition. 7. The ld. DR for the Revenue on the other hand relied upon the action of the Assessing Officer and CIT(A) and submitted that the onus was on the assessee to furnish the supporting documents in original to vouch the authenticity of the books of accounts. The Assessing Officer has rightly invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of the Assessing Officer that entries in respect of certain transaction are altogether omitted or found incorrect. No inherent lacuna in the system of accounting is shown either. 9. The Assessing Officer in our view is not justified in taking drastic action of rejection of books of account which are audited and are without any qualification solely on the basis of general remarks that photocopy of the bills have been produced instead of original bills. No specific instance has been provided in the order to appreciate as to how such delinquency on the part of the assessee has resulted in unreliability of books per se. Admittedly, the photocopies of bills and vouchers were duly produced, the Assessing Officer has not made any indepen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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