Case Law Details
In the case of VV Constructions v ACIT, ITAT Pune held that the Books of account cannot be rejected for only the reason that there was some over writing in one of the transactions. Also, it can’t be rejected because the Assessee have furnished the PAN numbers and made TDS in all the transactions.
Facts of the Case
The assessee is a partnership firm engaged in the business of Civil Construction. During the course of assessment proceedings the AO noted that assessee firm has shown net profit of Rs.47,21,819/- on a total turnover of Rs.8,68,76,534/- which comes to 5.48%. In the immediately preceding AY the assessee has shown net profit of Rs.53,32,302/- on a total turnover of Rs.6,52,17,258/- which comes to 8.18%. According, to the Assessee the fall in profit was due to increase in labour, material and overhead cost. The assessee also submitted that there is substantial increase in Diesel, Petrol, Salary and Bonus, Wages and Transportation charges. From the various bills and vouchers produced before the Assessing Officer he noted that in the wages register only name of the workers are mentioned. Their complete address and nature of work carried out by them or details of work completed by them are not mentioned. Further, most of the signatures placed on register were in English which according to the AO seems to be doubtful. The Assessing Officer also doubted on the authenticity of some bills. The AO was not satisfied with the explanation given by the assessee and observed that possibility of inflation of expenses cannot be ruled out especially when most of the payments were made in cash. In view of the above, the Assessing Officer raised the provisions of section 145(3) and rejected the book results.
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