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TMI Blog2021 (12) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the books of accounts. It is merely because on report of the inspector it was found that the creditors were not available at the address given by the assessee, the learned assessing officer has rejected the books of accounts and estimated the profit comparing the results of three different entities. Merely because the VAT return of the suppliers were not produced assessee cannot be burdened with additional tax liabilities when the quantitative details of material purchased and sold which included the material purchased from the suppliers are also accounted for. Undisputedly the accounts of the assessee are audited Under the provisions of Section 44AB of the act. For the subsequent years the learned assessing officer has assessed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n spite of sufficient time available with him and put it on the shoulders of the appellant for not discharging his liability. 4. That the maximum requirements to justify the questionnaire of the A.O. were placed on the record in original Asstt., the other requirements, if any, of the learned A.O. could have sorted out at his own end keeping in view the circumstances of the appellant. 5. (a)That the application of Average rate of Net Profit of three allied concerns is not valid in the eyes of law. (b) That where no expenses is disturbed, purchase and sales has also been proved by having VAT Asstt., the applied rate of Net Profit in a discretionary manner is not justified. 2. Brief facts of the case shows that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f has been assessed u/s 143(3) for Assessment Year 2013-14 i.e. subsequent to this assessment year accepting the book results. 5. The ld AO once again rejected the contentions of the assessee stating that the confirmation is merely a paper document whether there were no business activity was carried out by those creditors at the given address . Assessee once again failed to produce the right returns of the suppliers as well as it also failed to provide any bills and vouchers in relation with the purchase and sales. With respect to the adoption of the net profit he held that the ld AO would have taken average net profit rates of previous three years of the assessee itself and whose average net profit ratio @1.74% against that the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of the working out gross profit. He further stated that even if the chart submitted by the assessee at page 49 is considered, the net profit ratio for Assessment Year 2013-14, 2012-13, 2010-11 and 2009-10 also comes to 1.19%. In this year there is a specific discrepancy found in the sundry creditors of the assessee the additions has been made @1.34%. He therefore, submitted that the orders of the lower authorities deserves to be upheld. 8. We have carefully considered the rival contentions and perused the orders of the lower authorities. Categorically the ld AO has rejected the books of account of the assessee for the reason that assessee has failed to produce any credible evidence with respect to the three major creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re also in conformity with the VAT return filed by the assessee. With respect to the nonavailability of the creditors it may be possible as contended by the assessee that either the creditors have shifted the business activity or close down the their activities. We do not approve the finding of the learned assessing officer that though the creditors have filed the confirmation of the account, but the learned assessing officer has rejected the same stating that so-called creditors on the address given by the assessee are not available. It could also not have been the reason that the nonproduction of the VAT return of the creditors can result into rejection of the books of accounts. It is merely because on report of the inspector it was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent that did not try to locate this parties. The confirmations of these parties are placed at page number 22 25 of the paper book. Undisputedly the accounts of the assessee are audited Under the provisions of Section 44AB of the act. For the subsequent years the learned assessing officer has assessed the assessee Under the provisions of Section 143 (3) of the act and the books of accounts were accepted.In view of this we do not approve the order of the lower authorities rejecting the books of accounts of the assessee and estimating the profit by taking three different entities though in the similar line of business for estimating the income of the assessee. In view of this we allow ground number 5 of the appeal of the assessee. Ground nu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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