TMI Blog2002 (5) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the assessee was in respect of rejection of the books of account and estimation of income by invoking the provisions of s. 44AE of IT Act. The facts in brief were that the appellant was asked to produce the books of account and for that number of opportunities were granted by the AO. However, the assessee has failed to do so. The AO was in possession of an account of M/s City Automobiles and found a difference in the figures shown by the assessee. According to the copy of account collected by the AO of M/s City Automobiles the purchases were of Rs. 4,23,262 whereas the assessee has shown the same at Rs. 2,65,467 only. Further, the AO has also observed that the payment made by the assessee were to the tune of Rs. 4,13,407 as per the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs the AO was changed due to which the assessee suffered. The assessee has actually produced the books of account before the predecessor AO but could not produce the same before the successor AO due to non-availability of the accountant. In respect of the difference in the account of M/s City Automobiles he has pleaded that the AO has not informed the assessee about any discrepancy during the course of assessment proceedings and the assessee has come to know only after receiving the assessment order. Thus, he has argued that inference was drawn against the assessee without providing an opportunity of hearing which was against the principle of natural justice. Coming to the provisions of s. 44AE he has strongly argued that as per sub-s. (6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2). Thus, he has concluded that the circumstances of the case has forced the AO to proceed under s. 44AE to assess the income as provided in sub-s. (2) of the said section. 6. We have carefully considered the rival submissions. We have also perused the orders of the authorities below as well as certain computation and list annexed along with compilation. There is no dispute in respect of the facts of the case as narrated above. The only difference is in respect of this fact that the assessee has claimed to have produced the books of account before the predecessor AO, however, the assessment order does not give any such indication. But the fact remains as it was that before the successor AO who has finally passed the impugned assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with the normal provisions of the IT Act. Accordingly, all deductions under Chapter VI-A and rebate under Chapter VIII will be available to the assessee, if the conditions therein are fulfilled. The scheme is optional. A system of rebuttal has been provided. A person can claim that his income in respect of the above-mentioned business is lower than the specified estimate of income. In such case he must produce necessary evidence to prove his case. Such a case will be scrutinised for regular assessment under s. 143(3). This amendment takes effect from 1st April, 1994, and will, accordingly, apply in relation to asst. yr. 1994-95 and subsequent years. The assessment year under appeal is asst. yr. 1996-97. From the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e based on the books of account maintained by the assessee. However, it cannot be ruled out that due to certain unfavourable circumstances the assessee was unable to produce such books of account. Under such circumstances in our opinion it would be fair and reasonable to provide an opportunity to the assessee so that he can substantiate the income declared. Moreover, as we have already discussed, regarding provisions of s. 44AE, we are of the opinion that once income declared by the assessee was found lower than that specified in sub-s. (2) thereupon the AO should proceed to make on assessment under s. 143(3) as provided in s. 44AE(6). The language of sub-s. (6) empowers the AO to make an assessment of the total income as well as determine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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