Iqbal Ahmed Khalil Ahmed Subedar Vs ITO (ITAT Mumbai)
The books of accounts of the assessee were rejected u/s 145(3) of the Act for AY 2009-10, the assessee is not disputing the action of Revenue in rejection of the books of account u/s. 145(3) of the Act and the assessee is submitting before the Bench that books of accounts were rightly rejected by the AO and it was submitted that there is no dispute as far as rejection of books of accounts by Revenue for AY 2009-10 is concerned. The assessee is also not disputing that he issued cheques to the so called purchasing parties which were not account payee cheques and rather bearer cheques or crossed cheques were issued which infringed Section 40A(3) and 40A(3A) , which violation of Section 40A(3) and 40A(3A) stood accepted by the assessee. It is also accepted by the assessee that cheques were cleared in the name of third parties as against the purchasing parties from whom the material is shown to have been purchased as the cheques were never issued in the name of the so called purchasing parties. It is also not disputed by the assessee that the assessee does not have purchase bills. The assessee‟s main line of argument and defense is that once books of accounts are rejected by the AO u/s. 145(3), then no resort can be made to the said rejected books of accounts and additions cannot be made u/s. 40A(3)/40A(3A) of the Act, and the only recourse available with the A.O is to estimate profits of the assessee‟s business to compute income under the Act. This is the main line of argument /defense of the assessee before the tribunal.
