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TMI Blog2019 (4) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Assessing Officer suo motto did the extensive assessment even though the mandate was to make limited scrutiny. Rejection of books of accounts u/s 145 - estimation of income net profit @5% of the ‘cost of stock put for sale’ - HELD THAT:- For the sake of judicial precedent, we are intended to proceed with the estimation but the issue before us is not on rejection of books or estimation of income. Before us, whether limited scrutiny mandate can be extended. As per the CBDT directive, Assessing Officer cannot do so without following proper procedure. In the given case, Assessing Officer has made extensive assessment without mandate. Therefore, we need to restrict ourselves to address this issue. However, we direct the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely, it was found that majority of the expenditure claimed under the heads hamali, salaries, rents, misc., and shop expenditure were not supported by proper vouchers. Most of the expenditure under these heads were supported by self-made vouchers which are not amenable for verification with reference to the expenditure booked in the Profit Loss A/c. 2.2. When questioned about the authenticity and genuineness of the expenses debited in the Profit Loss A/c, it was explained by the Ld. Counsel for the assessee that in this line of business maintenance of bills/vouchers is very difficult as the business is done at peak hours. It is also stated by him that the assessee is unable to maintain each and single voucher for expenditure debited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the FY 2013-14 relevant for AY 2014-15. He further noticed that in the P L A/c for the year ending 31st March, 2014, assessee claimed expenditure on various head, namely, salaries, shop rent transport etc. When asked to furnish details for the same along with supporting evidences, the AR of the assessee furnished the evidences in support of the claim. On examination of the same, the AO held that some of the expenses were supported by vouchers which are not susceptible for verification. When, he proposed to make a round sum addition of ₹ 30,000/- towards disallowance of expenses claimed, the AR agreed for the same, hence, addition of ₹ 30,000/- was made. 2.6. Aggrieved, assessee preferred an appeal before the CIT(A), who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in sustaining the assessment order rejecting the books of accounts maintained by the Appellant and resorting to estimation of income without pin pointing the defects in the maintenance of such books of accounts. He ought to have considered the fact that, the weakness in maintenance of few expenditure vouchers will not make the books of accounts liable for rejection without explaining how such books of accounts could not be relied upon for the computation of correct taxable income. 5. On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in estimating the income at a rate which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits and turnover and found correct. The Assessing Officer completed the assessment beyond the scope of scrutiny without any approval from Pr.CIT. Widening the scope of assessment is against the CBDT directives. He prayed that assessment may be quashed. 5. On the other hand, Ld. DR submitted that Assessing Officer has completed the assessment by estimating the revenue as the assessee failed to submit proper bills and documents. The Assessing Officer has not violated any procedure and he brought to our notice the findings of Ld.CIT(A) vis- -vis the remand report submitted by the Assessing Officer before the CIT(A). 6. Considered the rival submissions and material on record. The assessment was selected to verify the bank deposits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f judicial precedent, we are intended to proceed with the estimation but the issue before us is not on rejection of books or estimation of income. Before us, whether limited scrutiny mandate can be extended. As per the CBDT directive, Assessing Officer cannot do so without following proper procedure. In the given case, Assessing Officer has made extensive assessment without mandate. Therefore, we need to restrict ourselves to address this issue. However, we direct the Assessing Officer to accept the books of account since he has not found any discrepancies in verification of deposits and turnover as per limited mandate. Even in case, Assessing Officer found discrepancy, he could have invoked Section 68. Therefore, the ground raised by as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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