AO tax income on estimation basis when assessee has produced all the books

AO tax income on estimation basis when assessee has produced all the books

9. In the light of the above judicial precedents, we confirm the order of the Ld. CIT(A) that the addition us 68 of the Act was erroneously made by AO against the sundry creditors of Rs.78,22,863/- to whom the assessee had to pay the truck owners which is a liability for delivering goods and the Ld. CIT(A) has rightly deleted the same. Therefore, we dismiss this ground of appeal of the revenue.

10. Second ground of appeal of the revenue is against the action of the Ld. CIT(A) in deleting the addition of Rs.11,86,100/- on account of showing low bilty charges.

11. Brief facts of the case are that the AO noted that after receiving direction from the JCIT, Range-1, Jodhpur he asked the Ld. AR in respect of certain details about bilty charges received by the assessee. According to the AO, it was asked specifically asked as to whether bilty charges is inclusive in the receipt from the company or whether it is collected separately from the truck owners. According to AO, the Ld. AR of the assessee failed to give reply on this issue and the written reply given by the assessee was found inadequate and improper and taking note that the assessee failed to give the list of bilty received amount of Rs.11,55,100/-, the AO estimated the bility charges received during year at 2% of Rs.11,70,63,030/- which comes to Rs.23,41,260/- and since the assessee has already declared bilty charges of Rs.11,55,100/- the difference of Rs.11,86,160/- on account of showing low biltly charges was added in the hands of the assessee. Aggrieved, the assessee preferred appeal before the Ld. CIT(A), who was pleased to delete the same. Aggrieved, the revenue is before us.

12. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the AO had asked the Ld. AR of the assessee whether the bilty charges was inclusive in the receipt from the company or whether it is collected separately from the truck owner and since the Ld. AR of the assessee failed to give satisfactory answer, he had proceeded to make the addition as aforesaid. We note that the Ld. CIT(A) has called for the assessment records and the Ld. CIT(A) has made a finding of fact that bility charges were inclusive in the receipt from the company, which finding of fact has not been challenged by the Revenue, so, this finding of fact by Ld. CIT(A) crystalises. Moreover, we note that the assessee had produced the books of account during the assessment proceedings. However, the AO for reasons best known to him has stated that the assessee failed to produce any books of account. It was submitted before us that during the assessment proceeding the books of account were also produced before the JCIT, Range-1, Jodhpur in the proceedings u/s. 144A of the Act and it was also brought to our notice that the JCIT, Range-1 after due verification from the documentary evidence, material information submitted by the assessee had given limited directions to the AO for verification. We note that the assessee had already declared bilty charges to the tune of Rs.11,55,100/- which is 0.98% of the total receipt. It was brought to our notice that in the previous assessment year 2013-14 when the freight receipt was Rs.8,.10,32,496/- bilty charges was Rs.8,65,025/- which was 1.06% whereas in this assessment year 2014-15 freight receipt was Rs.11,70,63,030/- bilty charges was reflected by the assessee at Rs.11,55,100/- which is 0.99%. We note that since the assessee has produced all the books of account etc. without finding any defect or irregularities therein, the AO ought not to have gone for estimation of income, without rejecting the books as per the procedure prescribed u/s. 145(3) read with sec. 144 of the Act, and, therefore, the action of the AO was arbitrary in nature and so vitiated, therefore, the action of the Ld. CIT(A) who after due verification made by him does not require any interference from our part and, therefore, we confirm the action of Ld. CIT(A) and dismiss this ground of appeal of revenue.

13. In the result, appeal of the revenue is dismissed.

Order pronounced in the open court on 10th May, 2019

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Tags : Judgement, Appellant Tribunal

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