9911796707
TMI Blog2024 (5) TMI 1480X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the correctness and completeness of the accounts of the assessee. AO had further observed that since the expenditure claimed is not verifiable, income was proposed to be assessed at 12 per cent. of the total disclosed revenue after rejecting the books of account. The submission, therefore, that the petitioner had not been apprised of the proposed rejection of the books and variation in income would clearly not sustain. Disallowance u/s 40(a)(ia) no specific disallowance has been made nor have any additions consequentially factored in. All that the AO has observed is that the dis allowance is not being made at this stage subject to the view that any appellate authority may take with respect to rejection of books of account. No me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 ( Act ) read with section 144B had been addressed on the ground that the petitioner had not been placed on notice of an intent of the Assessing Officer ( AO ) to reject the books of account and to make additions referable to section 40(a)(ia) of the Act. 3. The petitioner had also asserted that the allegation of a failure on its part to comply with section 194C(6) was also not one which was disclosed in any show-cause notice ( SCN ) issued prior to the passing of the final assessment order. 4. However, we find on the record a show-cause notice dated February 26, 2024 and where the Assessing Officer had observed as follows : During the assessment proceeding, return of income filed by the assessee, audit report, profit and loss acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 142(1) of the Income-tax Act, correctness or completeness of the accounts of the assessee is in question. As per section 145(3) of the Income-tax Act 'Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) has not been regularly followed by the assessee, or income has not been computed in accordance with standards notified under sub-section (2), the Assessing Officer may make an assessment in the manner provided in section 144.' Since, the expenditure claimed by the assessee is not verifiable in the absence of documents/documentary evidence, therefore, there is no other option but to complete the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how-cause notice In response to the show-cause notice, the assessee furnished its reply along with details of direct expenses, lorry hire charges (non TDS), breakup of payment to registered and unregistered entity under the goods and services tax, copy of bank statements. The assessee further submitted that the payment to non-GST entities is mainly to persons supplying truck to company and on which either provisions of the goods and services tax is not applicable. However, the assessee has not furnished the method of payment and copy of ledger of confirmation. The assessee has made huge payment to non-GST entities and the assessee has not submitted the method of payment, i.e., either cash or banking channel. The assessee has also not furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed format. However, as the books of account is not reliable and are rejected under section 145(3) of the Income-tax Act. Therefore, no specific disallowance has been considered under section 40(a)(ia) of the Income-tax Act. In the event, the books of account are held to be reliable in any appellate proceedings, if any, then the specific disallowance under section 40(a)(ia) for non- deduction of tax at source amounting to Rs. 26,40,95,684, i. e., (30 per cent. of Rs. 88,03,18,945) shall be required to be made. 7. It is thus manifest from the aforesaid that no specific disallowance under section 40(a)(ia) has been made nor have any additions consequentially factored in. All that the Assessing Officer has observed is that the dis allowance is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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