| The Tax Publishers2019 TaxPub(DT) 8424 (Del-Trib) INCOME TAX ACT, 1961
Section 263
Assessee having failed to produce books of accounts, bills, vouchers, etc., during the second round of ssessment proceeidngs, AO had valid reasons to not be fully satisfied about the correctness and completeness of accounts of assessee; and therefore, AO was justified in invoking provisions of section 145(3) and also Tribunal further confirmed the estimation of profit @ 5% of the gross business receipt.
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Revision under section 263 - Erroneous and prejudicial order - lack of enquiry - Estimation of net GP rejecting books result
The issue was the estimation of profit @ 5% of gross business receipts, rejecting the book results by AO invoking provisions of section 145(3). Assessee contended that the books of account, bills, vouchers, etc., were produced by the assessee during first round of assessment proceeding (resulting in assessment Order, dt. 26-11-2010) which was examined by the AO on test check basis, and the trading results were accepted.However, the DR contended that the CIT, vide Order, dt. 18-3-2013, passed under section 263 had restored the matter back to the AO with direction to pass fresh order after examining the issue properly. Therefore, the assessee was required to poduce the books of account, bills, vouchers, etc., before the AO in second round of assessment proceedings also. DR further submitted that the Order, dt. 18-3-2013 of the CIT passed under section 263 had attained finality because the assessee's appeal against this order was dismissed by ITAT.Held: It was not in dispute that the assessee had failed to produce books of account, bills, vouchers, etc. before the AO during the second round of assessment proceedings (resulting in assessment Order, dt. 28-3-2014). Merely because the assessee had produced the books of accounts, bills, vouchers etc. during the first round of assessment proceedings which were accepted by the AO, it cannot be said that the assessee was not required to produce books of account, bills, vouchers, etc. again during second round of assessment proceedings, having regard to direction of the CIT of aforesaid Order, dt. 18-3-2013 under section 263. The assessee having failed to produce the books of accounts, bills, vouchers etc. during the second round of assessment proceedings; the AO had valid reasons to not be fully satisfied about the correctness and completeness of the accounts of the assessee; and therefore, the AO was justified in invoking the provisions of section 145(3). Moreover, the assessee had failed to bring any materials to establish that the estimation of profit @ 5% of the gross business receipt was excessive, unreasonable, high pitched or contrary to law having regard to the facts and circumstances of the case. In view of the foregoing, the order of the lower authorities invoking provision of Section 145(3) for the purpose of estimating business profits and Tribunal further confirm the estimation of business profits @ 5% of gross business receipts.
REFERRED : P.K. Cotton Mills (P.) Ltd. v. CIT, Assessment year 2008-09, ITA No. 2055/2013, Order, dt. 18-11-2016 : 2017 TaxPub(DT) 0493 (Del-Trib), CIT v. Bishambhar Dayal & Co. (1994) 210 ITR 118 (All-HC) : 1994 TaxPub(DT) 833 (All-HC), 2. Ram Jhanwar Lal v. ITO & Ors. (2010) 321 ITR 400 (Raj-HC) : 2010 TaxPub(DT) 0135 (Raj-HC), CIT v. Jain Construction Co. & Ors. (2000) 245 ITR 527 (Raj-HC) : 2000 TaxPub(DT) 0876 (Raj-HC) and CIT v. Chopra Bros. India (P.) Ltd. (2001) 252 ITR 412 (P&H-HC) : 2001 TaxPub(DT) 1623 (P&H-HC).
FAVOUR : Against the assessee.
A.Y. : 2008-09
INCOME TAX ACT, 1961
Section 263 Section 32(1)
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