9911796707
TMI Blog2022 (2) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... in substantive grounds in the instant appeal: "2. The Ld. CIT(A) erred in rejecting the estimation of income @15% on gross sales after rejection of Books of accounts. 3. Ld. CIT(A) erred in deleting the addition made by AO since the income in question either directly flowed from the business of the assessee or was closely connected thereto, as much as, no separate addition on that account was warranted after estimating the income". 3. Both the learned representatives next invited our attention the CIT(A)'s detailed discussion reversing the assessment findings estimating 15% of the receipts as under: "IX) Ground Nos. 2 in appeal has not been pressed by the appellant. Hence, the same is dismissed. X] Ground No. 3 of original grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence with regard to the incorrect and incomplete nature of accounts should be based on specific deficiencies in the accounts. The AO is to carefully scrutinize the accounts and make necessary enquiries, based on suspicion or any other feature suggesting any falsity, and to bring cogent reasons and specific material on record to substantiate the alleged defects in the accounts. Mere surmises, presumptions, lack of sufficient time for verification of accounts, considerations cannot be the basis for rejection. Further, where the accounts have been audited with unqualified reports there is no scope for rejection of the same unless any specific mistake therein is pointed out with supporting evidence. Where the book results were accepted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the details and evidence filed, was pointed out to the Appellant. Nor was the Appellant called up on to furnish any further clarifications on the doubts, if any, entertained by the AO in that regard. As can be seen from the assessment order itself, the case was taken up for scrutiny towards the end of the time limit for completion of assessment. It is clear from para 4 of the order that the primary ground, on which the books were rejected, was that the time limit for completion of assessment was going to get booked by 31.12.2016. In other words, lack of sufficient time for necessary certificate was the ground for rejection. The appellant contended that though the AO tried to justify the rejection by listing out certain reasons in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant humbly prays the CIT(A) to delete the addition made on that account and accordingly direct the AO to accept the income returned. Having gone through such submissions and relevant material the appellant's contention that the right to make an arbitrary assessment holds merit. The AO is bound to give the clear finding for the rate adopted while estimating the income of an appellant. However, in the instant case, the income from business was at estimated @ 15% without giving any justification therefor. The AO did not note the fact that the gross revenue of the Appellant included trading turnover apart from civil contract receipts. Therefore, in all fairness. the AO should have excluded the trading turnover while estimating the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/-. Hence, Ground Nos. 4, 5 and 6 in appeal are allowed and the AO is directed to accept the book results. 4. We have heard rival contentions against and in support of the correctness of the CIT(A)'s impugned directions. Learned authorised representative vehemently contended during the course of hearing that the assessee had filed all the expenditure details before the Assessing Officer, who still proceeded to reject its books of account, followed by income estimation @15% of the gross receipts. Learned counsel has next invited our attention to the assessee's twin detailed paper books running into 440 pages containing all the relevant particulars. His last contention is that the assessee has filed all details of contractual as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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