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TMI Blog2018 (12) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... ,36,71,457/- (Correct figure Rs. 3,56,71,457) against Rs. 4,22,60,755/- made by the Assessing Officer thereby allowing a relief of Rs. 65,89,300/- without taking into consideration the fact that the assessee failed to produce books of account and failed to substantiate its claim w.r.t. sharp fall in GP rate with supporting documents. 2. The Ld. CIT(A) has erred in law and on facts in deleting the addition made by the AO rejecting the books of accounts by failing to appreciate the fact that the case of the assesse squarely falls under the ambit of the findings of the Hon'ble Apex Court in the case of MIs Kachwala Jems Vs. JCIT, Jaipur (288 ITR 10) of 2007. 3. The appellant craves leave for reserving the right to amend, modify, alte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was given to the assessee. However, the assessee was unable to produce the requisite documents on the given date and show cause notice was also issued by the AO to explain as to why the books of accounts should not be rejected u/s 145(3) of the Income Tax Act and assessment should not be completed to the best of his knowledge i.e. u/s 144. The case was fixed for hearing on 20.12.2011. Assessee filed part details on 20.12.2011 and case was adjourned to 26.12.2011 giving final opportunity to the assessee to produce books of accounts and other pending details. On the given date on 26.11.2011 the AR of the assessee expressed his inability to produce books of accounts and other documents stating that the same had been misplaced during shifting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding wrong rejection of books of accounts made by the AO u/s 145(3) of the Income Tax Act, but sustained the addition on account of loss on revaluation of stock of Rs. 3,24,51,089/- and discount given against the previous year's sale of Rs. 32,13,004/-. Accordingly, the ld. CIT(A) gave relief to the appellant of Rs. 65,79,300/- . Feeling aggrieved from the order of the Ld. CIT(A), the revenue is in appeal before the Income Tax Appellate Tribunal. 5. Ld. DR relied upon the order of the lower authorities and he submitted that the Ld. CIT(A) is not justified to accept the plea of the assessee regarding the rejection of books of accounts by the AO. Ld. CIT(A) has wrongly stated that the AO has failed to point out any defect or discrepancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on 31.3.2005 and at Rs. 11.20 crores as 31.03.2006. It can be seen that the sundry creditors has been increased by Rs. 5.61 crores in the year under assessment. Assuming a theoretical situation where there was no payment to the sundry creditors outstanding as on 31.3.2005 and there was also no payments made for total purchases amounting Rs. 2.08 crores and also there wqas no payment of indirect expenses amounting to Rs. 2.46 crores claimed to have incurred during the relevant previous year (excluding provision for doubtful debts shown at Rs. 1.58 crore). These expenses summed up to Rs. 4.5 crore only and do not justify an addition of Rs. 5.61 crore in sundry creditors during the relevant previous years. You are requested to explain the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities below, to our mind does not hold good. It is notable that the AO has demanded the production of accounts right from beginning of proceedings. Thereafter, sufficient opportunities were given to the assessee and the assessee also appeared on some of the dates and filed part reply. However, no such fact of missing of accounts was unfolded by the assessee at any of the dates except the last date of hearing. Besides, the finding of Ld. CIT(A) as mentioned in his order "AO had also not pointed out any particular defect or discrepancy in the accounts books maintained by the assessee", in our considered opinion, would have no locus standi once the assessee did not produce any books of accounts before the AO. Ld. CIT(A) is, therefore, not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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