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Issues Involved: Assessment based on estimated income, rejection of books of account, additions made by Assessing Officer, appeal against additions.
Summary: The appeal was filed by the revenue against the order of the Ld. CIT (A)-XXXV, Mumbai dated 25th January, 2010. The assessee, engaged in the business of builder and developer, did not file the return of income for the relevant year by the due date. A survey u/s 133A was conducted at the business premises, during which the assessee declared income from a project. The Assessing Officer finalized the assessment u/s 144 r.w.s. 147, making various additions to the total income of the assessee, including on account of difference in profits from the project, unsecured loans, disallowance of expenses, and work-in-progress adjustments. The assessee appealed the additions made by the Assessing Officer, and the Ld. CIT (A) confirmed the addition related to the project profits but deleted the remaining additions. The Ld. CIT (A) held that when the AO had rejected the books of account and estimated the income, no further addition could be made relying on the rejected books. The revenue appealed this decision. Upon hearing both sides, the Tribunal observed the rejection of books of account by the Assessing Officer and the estimation of income based on the surrendered profit from the project. Citing relevant judicial pronouncements, the Tribunal upheld the Ld. CIT (A)'s decision to delete the additions made by the AO relying on the rejected books of account. The appeal of the revenue was dismissed, affirming the decision of the Ld. CIT (A). In conclusion, the Tribunal upheld the decision of the Ld. CIT (A) to delete the additions made by the Assessing Officer based on rejected books of account, as the income was computed on an estimated basis. The appeal of the revenue was dismissed, and the order was pronounced on July 15, 2011.
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