Case Law Details
ACIT Vs Sanjay Agrawal (ITAT Raipur)
Insignificant mistakes in the accounts cannot justify rejection of books of accounts of the assessee under Sec. 145(3) of the Act.
Facts- The case of the assessee was selected for scrutiny assessment u/s. 143(2). Accordingly, A.O directed the assessee to substantiate its claim for deduction of expenses under the various heads by producing its cash book a/w supporting bills and vouchers.
In fact, it was admitted by the assessee before the A.O that though the bills/vouchers supporting its claim for deduction of certain administrative expenses may not be as per the decorum and level of presentation which he would have expected, but for the said standalone reason the same could not be dubbed as unauthentic. However, the A.O was not persuaded to subscribe to the contentions advanced by the assessee.
Observing that the books of account of the assessee were not fully reliable for determining its correct profit from construction business the A.O triggered the provisions of Sec.145(3) of the Act and rejected its books of account. Although, it was observed by the A.O that the turnover of the assessee from construction business was more than the limit provided u/s. 44AD of the Act, however, considering the facts and circumstances of the case he estimated its income @ 8% of its gross receipts and vide his order passed u/s.143(3), dated 10.03.2016 assessed the same at Rs.10,71,67,261/-
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