TMI Blog2024 (1) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Assessment Years in question, we find no ground to entertain the instant appeals on Question A. Estimation of income - bogus purchases - ITAT has essentially held that since the books of account had not been rejected it would not be open for the Assessing Officer to undertake an assessment of income - Appellant invited our attention to the following observations as appearing in the decision rendered in Unit Construction Co. Ltd. vs Joint Commissioner of Income-Tax [ 2003 (1) TMI 85 - CALCUTTA HIGH COURT ] to contend that it is not necessary for the Assessing Officer to reject the book of accounts in order to assess income on a best judgment basis - HELD THAT:- In order to enable learned counsels to examine whether this issue st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived cheques from Jagjit Industries and made payment M/s Bajrang Traders and M/s Gurunanak Traders and cash portion was refunded to M/s Jagjit Industries. The Assessing Officer accordingly computed profit at Rs. 83,85,628/- in case M/s. Jagjit Indutries and Rs.54,80,758/- on account of purchases from M/s Bajrang Traders and M/s Gurunanak Traders. Similarly he made addition of Rs. 42,53,909/- in assessment year 2014-15 on account of sales made to M/s Jagjit Industries. It is the submission of the Ld. Counsel for the assessee that the seized documents pertain to A.Y. 2014-15 and therefore, no addition could have been made on account those seized documents in A. Y. 2013-14 in absence of any incriminating material. So far as assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. We hold and direct accordingly. The grounds raised by the assessee for both the assessment years are accordingly allowed for statistical purposes. 2. It is thus manifest that since the exercise of assessment was not confined merely to the material gathered in the course of a search but was kept open to be examined with reference to all transactions in the Assessment Years in question, we find no ground to entertain the instant appeals on Question A. 3. We have by our earlier orders dated 21 July 2023 passed separately in both the appeals found that Questions E, F and G [in ITA No. 862/2019] and Questions D, E F [in ITA No. 863/2019] would also not merit consideration as the same are covered against the appellant. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly the same is upheld and the ground raised by the revenue is dismissed. 5. Mr. Menon, learned counsel has invited our attention to the following observations as appearing in the decision rendered by the Calcutta High Court in Unit Construction Co. Ltd. vs Joint Commissioner of Income-Tax [2003 SCC OnLine Cal 756] to contend that it is not necessary for the Assessing Officer to reject the book of accounts in order to assess income on a best judgment basis: 4. In our view, it is not necessary that the books of account are to be rejected. Inasmuch as, Section 68 of the Income-tax Act, essentially contains a deeming provision, which applies when the assessee's explanation is rejected. Section 68 does not imply that the boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not necessary that the books of account have to be rejected expressly or that it is to be, in express terms, recorded that the books of account are not reliable or the explanation is not satisfactory. It has to be gathered from the order itself whether in effect the Assessing Officer was satisfied with the explanation or had found that the books of account were not reliable. It is not the technical terms, which must appear in the order. It is the substance of the order that the Assessing Officer was not satisfied with the explanation which is relevant. This is apparent from Sections 69 and 69B. Where accounts are not reflected in the account books, it can be explained by the assessee, who under Section 69 is entitled to an opportunity to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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