RAJIV MEHTA,JAIPUR vs. ACIT, KOTA

PER SHRI KUL BHARAT, JM.

This appeal by the Assessee is directed against the order of Ld. CIT (A) Kota,

dated 16.09.2016 pertaining to A.Y. 2013-14.

The Assessee has raised the following grounds of appeal:-

“1. The impugned order u/s 143(3) dated 19.01.2016 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence, the same kindly be quashed.

2.1. Rs. 4,00,000/-: the Ld. CIT(A) erred in law as well as on the facts of the case in confirming the application of Sec. 145(3) of the Act. The provision so invoked by the AO and confirmation by the Ld.CIT(A), being contrary to the provisions of law and facts, the same kindly be quashed. Consequently, the trading addition of Rs. 4,00,000/- be deleted in full.

2 ITA No. 1022/JP/2016. Shri Rajiv Mehta, Kota.

Alternatively and without prejudice to above

2.2 The Ld. CIT(A) further erred in law as well as on the facts of the case in confirming trading addition up to Rs. 4,00.000/-. The addition sof made by the AO and partly sustained by the CIT(A) is totally contrary to the provisions of law and facts on the record and hence, the addition may kindly be deleted in full.

picked up for scrutiny assessment and the assessment was framed under section

143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act) vide order

dated 19.01.2016. While framing the assessment, the Assessing Officer rejected the

books of accounts and estimated the profit by applying gross profit at 25.596%

hence made addition of Rs. 21,34,520/-. The Assessing Officer also made

disallowance out of interest expenses and also adhoc disallowances. Against this,

the Assessee preferred an appeal before Ld. CIT(A), who after considering the

submissions, restricted the addition out of trading addition of Rs. 4 lakhs and deleted

the other disallowances.

addition of Rs. 4 lakhs.

3 ITA No. 1022/JP/2016. Shri Rajiv Mehta, Kota.

3.1 Ld. Counsel for the assessee reiterated the submissions as made in the

written submissions. Ld. Counsel for the assessee submitted that Assessing Officer

was not justified in rejecting the books of accounts. He submitted that Assessing

Officer has observed that the assessee has produced books of accounts which were

examined on tax cheque basis. He submitted that the authorities below failed to

appreciate the fact, day to day stock register was not possible to be maintained in

the line of business.

3.2 On the contrary, Ld. D/R supported the order of the authorities below on

rejection of books of accounts.

3.3 We have heard the rival contentions, perused the material available on record

and gone through the order of the authorities below. We find that the AO had

rejected books of accounts on specific defects and estimated the profit on the basis

of average GP rate of the last five years. However, the Ld. CIT(A) has sustained the

addition to the extent of Rs. 4 lakhs so far rejection of books of accounts is

concerned. Therefore, we do not find any fault into the finding of the AO; therefore,

rejection of books of accounts is upheld.

3.4 Another contention of the Ld. Counsel for the assessee is that the Ld. CIT(A)

was not justified in restricting the addition, since, we have upheld the rejection of

books of accounts on the basis of estimation of gross profit by the AO which is as

per the law laid down by the Jurisdictional High Court. The Revenue has not come

in appeal qua the addition deleted by the Ld. CIT(A). Therefore, the finding of the

Ld. CIT(A) is affirmed. Grounds raised in this appeal are rejected.

4 ITA No. 1022/JP/2016. Shri Rajiv Mehta, Kota.

2017.

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