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TMI Blog2024 (12) TMI 1388X X X X Extracts X X X X X X X X Extracts X X X X ..... f affairs of the assessee s business expenses and thereby making it difficult to verify the genuineness of expenses. Accordingly, we find no infirmity in the order of Ld. CIT(Appeals) so as to call for any interference.- Decided against assessee. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : None For the Respondent : Shri Rignesh Das, Sr. DR ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short Ld. CIT(A) ), National Faceless Appeal Centre (in short NFAC ), Delhi vide order dated 21.03.2024 passed for A.Y. 2017-18. 2. The assessee has raised the following gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as of the view that absence of details made it difficult to verify the legitimacy of the expenses. The Assessing Officer was of the view that the assessee had intentionally structured their accounts in such a way that it became nearly impossible to verify the expenses properly, especially considering the huge amount of cash payments and lack of adequate documentation. Further, the assessee reported contract income of Rs. 82,48,175/- in cash, with each of amounts being just below Rs. 20,000/-. The assessee submitted details for government contracts, which amounted to Rs. 19,09,84,032/-. The Assessing Officer noted that when both of these figures were added together, the total came to Rs. 19,92,32,207/-. However, in the Profit and Loss (P L) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 20,000/-. Despite providing this information, the assessee did not clarify the nature of the work done by the contractors or explain why payments were not made by cheque, particularly in cases where TDS had been deducted and the payments ranged between Rs. 1,50,000 and Rs. 50,00,000/-. Similar issues were noted for labour and raw material expenses. Given the lack of adequate documentation and explanation for the expenses, and the failure to provide necessary details for verifying the expenses, the assessing officer held that the books of accounts could not be relied upon. Consequently, the books of accounts were rejected under Section 145A of the Income Tax Act. For the current year, the Assessing Officer applied the gross profit rate fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te these explanations, Ld. CIT(Appeals) observed that the genuineness of the expenses, especially the contract expenses, labour expenses, and raw material expenses, could not be substantiated. As a result, the Ld.CIT(A) upheld the decision of the Assessing Officer in rejecting the books of accounts. Ld. CIT(Appeals) noted that in the case of Ram Chandra Singh Ramnik Lal vs CIT by the Hon'ble Patna High Court, it was held that the absence of stock books and a register for work in progress could justify the rejection of the books of account. Similarly, in the case of Bhai Sunder Dass, Sardar Singh (P) Ltd. vs CIT by the Hon'ble Delhi High Court, it was held that the absence of full quantitative details of materials consumed in a contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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