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Facts
The assessee appealed an order related to Assessment Year 2015-16, arising from proceedings under Section 143(3) of the Income Tax Act. The primary issue involved the rejection of the assessee's books of accounts.
Held
The tribunal acknowledged that the assessee did not press the issue regarding the rejection of accounts, given the NP rate remained the same. Other issues like rent disallowance and bad debts were allowed based on the precedent that once books are rejected, further disallowance of revenue expenditure is not permissible.
Key Issues
Whether the rejection of assessee's books of accounts under Section 145(3) was valid and if further disallowances could be made for revenue expenditure after rejection.
Sections Cited
143(3), 145(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2015-16, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-24/1059508087(1) dated 09.01.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Coming to the first and foremost issue between the parties regarding rejection of the assessee’s books of accounts u/s 145(3) of the Act, learned counsel wishes is not to press for the same after vehement arguments for the reason that the NP rate remains the same before and after the above rejection. Rejected accordingly subject to a rider that the same shall not
Now coming all the remaining issue between the parties i.e. rent disallowance, bad debts disallowance and alleged personal expenditure etc. involving varying sums. The Revenue could hardly dispute that once the assessee’s books of accounts have been rejected, no such revenue expenditure claim could be further disallowed going by Indwell Construction Vs. CIT (1998) 232 ITR 776(AP). Allowed accordingly.
No other grounds or argument has been pressed.