9911796707
TMI Blog2025 (5) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter referred to as "the Act") dated 20.05.2021 by the Assessing Officer, NFAC, New Delhi (hereinafter referred to as "ld. AO"). 2. The revenue has raised the following grounds of appeal before us :- "1. Whether on the facts and circumstance of the case, the Ld. CIT(A) has erred in rejecting the observation of the AD to invoke the provisions of section 145(3) of the Income Tax Act, 1961 for rejecting the books of accounts? 3. We have heard the rival submissions and perused the materials available on record. The return of income for the Assessment Year 2018- 19 was filed by the assessee on 31-10-2018 declaring total income of Rs 16,81,260/-. The assessee company is engaged in the business of manufacturing of garments, which include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the genuineness of the purchases. The assessee furnished the complete purchase invoices of the aforesaid 4 parties, ledger accounts of 4 parties as appearing in its books and bank statements evidencing the payments made to them. The assessee also furnished the details in tabular form stating that except Munish Jain, the other three parties were duly settled fully in Assessment Year 2019-20. In respect of Munish Jain, it was submitted that only a sum of Rs 37,88,130/- was paid by the assessee in Jan and Feb 2019 and remaining was payable to the party. The assessee duly acknowledged the debt due to the said party by showing it as outstanding in its books. The learned AO thereafter proceeded to expand the scope of verification by increasing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o gave the net profit chart for the three years as under:- AY Sales Net Profit Profit% 2018-19 51,18,47,900 12,14,726 0.24% 2017-18 31,45,11,881 3,27,304 0.10% 2016-17 8,11,59,122 19,839 0.02% 6. The Learned NFAC duly appreciated the contentions of the assessee and deleted the additions made by the Learned AO by observing as under:- "Grounds No. 1, 3, 4, 5, 6, 7 & 8:- These grounds pertain to addition of Rs. 5,23,69,850/- made u/s 144 after rejecting the books of accounts u/s 145(3) of the Act by the Ld. AO. From the assessment records and the order of the Ld. AO, it is clear that the case for selected under CASS on specific grounds. During the course of assessment, the appellant was directed to submit and substantiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort was sent to appellant for his comments which were received on 17.10.2023 From the perusal of submissions of the appellant, it can be seen that most of the assessment proceedings took place during the course of Covid Pandemic. The appellant had submitted most of the submissions during the course of assessment proceedings. I am of the opinion that the appellant had a reasonable cause for not submitting the requisite documents. In the interest of justice, the additional documents submitted by the appellant are hereby admitted and the matter is being adjudicated accordingly as per the submissions and the additional evidence thereof after considering the reply of the Ld. AO. From the submissions made by the appellant during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents submitted thereof. It is seen that the document of the appellant are not self-serving but rather contain sufficient requisite details. Hence, the same cannot be set to be non-genuine. Now coming to the point of rejection of the audit report and the books of accounts by the Ld. AO, the same seems to be totally unjustified since the Ld. AO has rejected the books of account of the appellant on rather flimsy grounds. The books of accounts of the assessee were audited and the auditor had not given any adverse comments in the maintenance of the books of accounts. It is seen that no specific defect in the books of accounts or method of accounting consistently followed by the assessee and no inflated purchases or suppressed sales or exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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