Bhagirathi Associates, Hooghly V. I.T.O Wd - 1(2),Hooghly., Hooghly

ITA 562/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4644 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADAN
• Keywords: Bogus purchase; Rejection of books of accounts; Business income; Opportunity of being heard; Question of law; Non passing of speaking order
• Section: 40A(3); 143(3); 142(1); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.562/KOL/2013 ASSESSMENT YEARS:2006-07 BHAGIRATHI ASSOCIATES 23 & 24, BAZAAR LANE, CHATRA, HOOGHLY-712004 [ PAN NO.AAGFB 7985 E ] / V/S . ITO WARD-1(2), HOOGHLY-712 101 WEST BENGAL /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SUBHASH AGARWAL, ADVOCATE /BY RESPONDENT SHRI SALLONG YADAN, ADDL. CIT-DR /DATE OF HEARING 27-06-2016 /DATE OF PRONOUNCEMENT 10-08-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA DATED 10.01.2013. ASSE SSMENT WAS FRAMED BY ITO WARD-1(2), HOOGHLY U/S 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 31.12.2008 FOR A SSESSMENT YEAR 2006-07. THE GROUNDS RAISED BY THE ASSESSEE PER ITS APPEAL ARE A S UNDER:- 1. FOR THAT ON THE A FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 3,72,832/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED SALES. 2. FOR THAT ON THE A FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.6,19,720/- M ADE BY THE AO ON ACCOUNT OF ALLEGED INFLATED CLAIM UNDER THE HEAD PROPORTIONAT E PAYMENT TO LAND OWNERS. ITA NO.562/KOL/2013 A.Y.2006-07 BHAGIRATHI ASSOCIATES VS. ITO W D-1(2), HG. PAGE 2 3. FOR THAT ON THE A FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITIONS MADE BY THE AO BY WRONGLY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) IN RES PECT OF THE FOLLOWING PAYMENTS MADE BY THE ASSESSEE TOTALING TO RS.7,14,3 78/- (A) SABITA MUKHERJEE RS.2,97,251/- (B) M/S POMPA FURNITURE RS. 70,166/- MD SAFI RS.1,66,961/- (D) SK. RAHMAN RS. 76,000/- (E) MADAN MOHAN ENTERPRISE RS.1,04,000/- RS.7,14,378/- 4. (I) FOR THAT ON THE A FACTS AND IN THE CIRCUMSTA NCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITIONS MADE BY TH E AO ON ACCOUNT OF ALLEGED BOGUS PURCHASES TOTALING TO RS.4,68,470/- M ADE FROM THE FOLLOWING PARTIES- (A) M/S BHARAT MARBLE & MINERAL WORKS RS.3,71,678/ - (B) JBB ENTERPRISES RS. 80,164/- MAHESH STORES RS. 16,628/- RS.4,48,470/- (II) FOR THAT ON THE A FACTS AND IN THE CIRCUMSTANC ES OF THE CASE, THE LD. CIT(A) GROSSLY ERRED IN TAKING A WRONG FIGURE OF RS.4,71,6 78/- WHILE CONFIRMING THE ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES MAD E FROM M/S BHARAT MARBLE & MINERAL WORKS. 5. FOR THAT ON THE A FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.52,515/- MAD E BY THE AO ON ACCOUNT OF EXPENDITURE ON INTERIOR DECORATION BY WRONGLY TREAT ING THE SAME AS BOGUS EXPENDITURE. 6. FOR THAT ON THE A FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITIONS MADE BY THE AO ON ACCOUNT OF ALLEGED DISCREPANCIES IN THE PURCHASES AND CLOSING BALANCES TOTALING TO RS.6,69,582/- IN RESPECT OF THE FOLLOWING PARTIES- (A) NRIPATI PAL RS.2,23,778/- (B) AVISHEK AGENCY RS. 31,880/- PALS SUPPLIER (CEMENT) RS. 56,140/- (D) PALS SUPPLIER (IRON ROD) RS. 69,792/- (E) MEGHA ENTERPRISE RS. 10,446/- (F) MA CHANDI HARDWARE RS. 76,369/- (G) DEY BUILDERS RS. 70,774/- (H) BISWANATH ELECTRIC SERVICES RS. 39,000/- (I) M/S B.N.GOSH & SONS RS. 91,403/- RSS.6,69,582/- 7. WITHOUT PREJUDICE TO GROUNDS NO. 1 TO 6, THE LD. CIT(A) OUGHT TO HAVE MADE A REASONABLE ESTIMATE OF PROFIT BY APPLYING GP RATI O AFTER REJECTING THE BOOKS OF ACCOUNT. ITA NO.562/KOL/2013 A.Y.2006-07 BHAGIRATHI ASSOCIATES VS. ITO W D-1(2), HG. PAGE 3 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. SHRI SUBHASH AGARWAL, AUTHORIZED REPRESENTATIVE APP EARED ON BEHALF OF ASSESSEE AND SHRI SALLONG YADEN, DEPARTMENTAL REPRESENTATIVE APP EARED ON BEHALF OF REVENUE. 2. FIRST WE TAKE UP GROUND NO.7 WHERE THE ISSUE RAI SED BY ASSESSEE IS THAT LD. CIT(A) OUGHT TO HAVE MADE A REASONABLE ESTIMATE OF PROFIT BY APPLYING GP RATIO AFTER REJECTING THE BOOKS OF ACCOUNT 3. FACTS IN BRIEF ARE THAT ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS OF CONSTRUCTION AS PROMOTER AND DEVELOPER OF REAL ESTATE. THE ASSESSEE IS SELLING THE RESIDENTIAL FLATS AND COMME RCIAL UNITS BY CONSTRUCTING A MULTISTORIED BUILDING KNOWN AS USHAANGAR. THE ASSES SEE FOR THE YEAR UNDER CONSIDERATION HAS FILED ITS RETURN OF INCOME BY DEC LARING BUSINESS INCOME OF 2,76,810/-. THEREAFTER THE CASE WAS SELECTED FOR SC RUTINY AND NOTICE WAS ISSUED U/S. 143(2) R.W.S 142(1) OF THE ACT. AT THE OUTSET, IT W AS OBSERVED THAT ASSESSEE FAILED TO PRODUCE THE NECESSARY BOOKS OF ACCOUNT BEFORE ASSES SING OFFICER IN CONNECTION WITH THE ASSESSMENT PROCEEDINGS EXCEPT CASH BOOK, BANK B OOK AND JOURNAL LEDGER. THE AO DURING ASSESSMENT PROCEEDINGS OBSERVED CERTAIN FACT S FROM THE MATERIAL AVAILABLE ON RECORDS WHICH ARE LISTED BELOW:- (1) NO PURCHASE REGISTER, STOCK REGISTER AND SALE REGISTER AND JOURNAL REGISTER WAS MAINTAINED BY ASSESSEE; (2) ASSESSEE HAS CLAIMED BUILDING AND CONSTRUCTION EXPENSE FOR CEMENT, IRON, DOORS, WINDOWS AND ELECTRICAL FITTINGS EXPENS ES BUT NO VOUCHERS IN SUPPORT WITH THESE EXPENSES WERE MADE AVAILABLE; (3) MONEY RECEIPT BOOK WAS MAINTAINED FOR ADVANCE RECEIVED FROM FLAT OWNERS; (4) ASSESSEE FAILED TO FURNISH THE COMPLETE SET OF THE BILLS AGAINST THE PURCHASE SHOWN IN THE PROFIT & LOSS A/C AND THE NAM ES OF THE CREDITORS WERE NOT MATCHING WITH THE LIST OF PURCHASES FURNIS HED BY ASSESSEE. ITA NO.562/KOL/2013 A.Y.2006-07 BHAGIRATHI ASSOCIATES VS. ITO W D-1(2), HG. PAGE 4 (5) THERE WAS NO OUTSTANDING BALANCE AGAINST THE SU NDRY CREDITORS FOR THE YEAR ENDING ON 31 ST MACH, 2006 BUT THERE WAS A LOAN CREDITORS OF 23 LAKHS OUT OF WHICH 7.80 LAKH IS SEEN TO HAVE BEEN PAID IN THE FINANCI AL YEAR 2005-06. (6) THE INVESTIGATION AND EXAMINATION OF BOOKS OF A CCOUNT SUBMITTED BY ASSESSEE WERE CONFLICTING AND SELF-CONTRADICTORY IN NATURE. IN VIEW OF ABOVE THE AO OBSERVED SEVERAL DISCREPANC IES IN THE FIGURES OF SALE, EXPENSES, PURCHASES, NON-COMPLIANCE OF THE PROVISIO NS OF SECTION 40A(3) OF THE ACT, NON-MAINTENANCE OF PARTY WISE LEDGERS AND DIFFERENC ES IN THE CREDITORS VIZ A VIZ PURCHASES. THE AO FOUND THE DIFFERENCE OF RS. 29,99 ,083.00 ON ACCOUNT OF SEVERAL DISALLOWANCES AND ADDITIONS. THE AO AFTER GIVING RE ASONABLE OPPORTUNITY HAS DISALLOWED THE SAME AND ADDED TO THE TOTAL INCOME O F ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO LD. CIT(A ) WHO HAS PARTLY ALLOWED THE RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE CAME IN SECOND APPEAL BEFORE US. 4. AT THE OUTSET THE LD. AR BEFORE US SUBMITTED THA T THE LOWER AUTHORITIES SHOULD HAVE REJECTED THE BOOKS OF ACCOUNTS FOR MAKING THE ASSESSMENT ON ESTIMATION BASIS. IT IS BECAUSE THERE WERE A LOT OF DEFECTS IN THE ACCOU NTS PRODUCED AND MANY ACCOUNTS WERE NOT PRODUCED BEFORE THE LOWER AUTHORITIES. ON THE OTHER HAND THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE LOWER AUTHORI TIES. 5. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. FROM THE PERUSAL OF THE ASSESSMENT ORDER WE FIND TH AT THE SEVERAL ADDITIONS WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT NUME ROUS DISCREPANCIES FOUND IN THE BOOKS OF ACCOUNTS. THE ADDITIONS WERE SUBSTANTIALLY CONFIRMED BY THE L OWER AUTHORITIES. WE FIND IN THE SIMILAR FACTS AND CIRCUMSTANCES THE VARIOUS HONBLE COURTS HAVE REJECTED THE BOOKS OF ACCOUNTS FOR BRINGING TH E ACTUAL AMOUNT OF PROFIT TO TAX. SOME OF THE CASE LAWS ARE LISTED BELOW. THE RELEVANT EXTRACT OF THE JUDGMENT OF HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF AWAD HESH PRATAP SINGH ABDUL ITA NO.562/KOL/2013 A.Y.2006-07 BHAGIRATHI ASSOCIATES VS. ITO W D-1(2), HG. PAGE 5 REHMAN & BROS. VS.CIT (1994) 119 CTR 0001 : (1994) 210 ITR 0406 : (1994) 76 TAXMAN 0106 THE ACCOUNT BOOKS WERE REJECTED BECAUSE ADMITTEDLY NO STOCK REGISTER WAS MAINTAINED NOR THE SALES WERE FOUND VERIFIABLE IN ABSENCE OF THE CASH MEMOS. THE VOUCHERS OF EXPENSES WERE ALSO NOT FORTHCOMING AND THE INCOME RETURNED WAS RIDICULOUSLY LOW AS COMPARED TO THE EXORBITANT TURN OVER AND THE EXTENT OF THE BUSINESS CARRIED ON BY THE ASSESSEE. IT IS DIFFICULT TO CATALOGUE THE VARIOUS TYPES OF DEFECTS IN THE ACCOUNT BOOKS OF AN ASSESSEE WHICH MAY RENDER REJEC TION OF ACCOUNT BOOKS ON THE GROUND THAT THE ACCOUNTS ARE NOT COMPLETE OR CORREC T FROM WHICH THE CORRECT PROFIT CANNOT BE DEDUCED. WHETHER PRESENCE OR ABSE NCE OF STOCK REGISTER IS MATERIAL OR NOT, WOULD DEPEND UPON THE TYPE OF THE BUSINESS. IT IS T RUE THAT ABSENCE OF STOCK REGISTER OR CASH MEMOS IN A GIVEN SITUATION MAY NOT PER SE LEAD TO AN INFERENCE THAT ACCOUNTS ARE FALSE OR INCOMPLETE. HOWEVER, WHERE ABS ENCE OF A STOCK REGISTER, CASH MEMOS, ETC., IF COUPLED WITH OTHER FACTORS LIKE VOUCHERS IN SUPPORT OF THE EXPENSES AND PURCHASES MADE ARE NOT FORTHCOMING AND THE PROFITS ARE LOW, M AY GIVE RISE TO A LEGITIMATE INFERENCE THAT ALL IS NOT WELL WITH THE BOOKS A ND THE SAME CANNOT BE RELIED UPON TO ASSESS THE INCOME PROFITS OR GAINS OF AN ASSESSEE. IN SUCH A SITUATION THE AUTHORITIES WOULD BE JUSTIFIED TO REJECT THE ACCOUNT BOOKS UNDE R S. 145(2) AND TO MAKE THE ASSESSMENT IN THE MANNER CONTEMPLATED IN THOSE PROV IS IONS. TAKING ALL THESE ASPECTS AND THE MATERIAL INTO CONSIDERATION, THE TRIBUNAL H AS FOUND AS A FACT THAT THE CLAIM OF THE ASSESSEE FOR ACCEPTANCE OF THE ACCOUNT BOOKS WA S NOT SUSTAINABLE. ON THE FINDINGS OF FACT RECORDED BY THE TRIBUNAL, ITS ORDER DOES NO T GIVE RISE TO ANY QUESTION OF LAW. FINDING OF TRIBUNAL THAT BOOK RESULT SHOWN BY ASSES SEE WAS RIGHTLY REJECTED BEING ARRIVED AT AFTER TAKING INTO CONSIDERATION FACTS OF CASE AND FACTORS LEADING TO REJECTION OF ACCOUNTS, IS A FINDING OF FACT. WHERE ABSENCE OF STOCK REGISTER, CASH MEMOS, ETC., IF COUPLED WITH OTHER FACTORS LIKE VOUCHERS OF EXPENSES ARE NOT FORTHCOMING AND PROFIT S ARE LOW, AUTHORITIES WOULD BE JUSTIFIED IN REJECTING ACCOUNT BOOKS UNDER S. 145(2 ) AND IN MAKING BEST JUDGMENT ASSESSMENT. THE RELEVANT EXTRACT OF THE JUDGMENT OF HIGH COURT OF RAJASTHAN COMMISSIONER OF INCOME TAX VS. RAM SINGH (2014) 266 CTR 0122 (RAJ) : (2014) 99 DTR 0217 (RA J) : (2014) 363 ITR 0417 (RAJ) APPEAL (TRIBUNAL)? NON SPEAKING ORDER? REJECTION O F BOOKS OF ACCOUNTS? V ALIDITY? ASSESSEES WERE LIQUOR CONTRACTORS AND WERE AWARDED LICENSE BY STATE OF RAJASTHAN FOR SALE OF INDIAN MADE COUNTRY LIQUOR (IMCL) UNDER RUL E 67(1) AND 67(KK) OF RAJASTHAN EXCISE RULES, 1956 SO ALSO RETAIL SALE OF BEER AND INDIAN MADE FOREIGN LIQUOR (IMFL) UNDER RULE 3- A OF RAJASTHAN FOREIGN LIQUOR (GRANT OF WHOLESALE A ND RETAIL) SALE LICENSE, RULES, 1982 UNDER EXCLUSIVE PRIVILEGE SYST EM FOR DIFFERENT PLACES? IN SOME OF CASES, ASSESSEES HAD FORMED ASSOCIATION OF PERSONS (AOP) AND OBTAINED ITA NO.562/KOL/2013 A.Y.2006-07 BHAGIRATHI ASSOCIATES VS. ITO W D-1(2), HG. PAGE 6 LICENSE/CONT RACT TO SELL LIQUOR AS AFORESAID EXCLUSIVELY? LICEN SES WERE OBTAINED BY SUCCESSFUL BIDDERS AND OTHER THAN THOSE LICENSEES, NO OTHER PERSON WAS PERMITTED TO SALE LIQUOR WHICH WAS PROHIBITED COMMODITY ? DURING COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WERE S PECIFICALLY ASKED TO FURNISH SHOP-WISE & BRAND- WISE DETAILS OF ALL RECEIPTS AND SALE OF IMCL, IMFL AND BEER WHICH WERE ADMITTEDLY NOT PRODUCED? VOUCHERS FOR EXPENSES WERE REQUIRED TO BE PRODUCED? IN SOME CASES SOME VOUCHERS WERE PRODUCED BUT, BY AND LARGE, IN MAJORITY OF CASES EVEN VOUCHERS WERE NOT PRODUCED? HOWEVER, AO REJECTED BOOKS OF ACCOUNT AND TRADING RESULTS U/S 145 BY HOLDING THAT NON- MAINTENANCE OF SALE VOUCHERS WAS MAJOR DEFECT SINCE SALE WAS NOT OPEN TO VERIFICATION? AO ALSO ESTIMATED GROSS PROF IT RATE AND IN SOME OF CASES NET PROFIT RATE AND IN SOME OF CASES AD HOC ESTIMATED ADDITION HAD BEEN MADE? CIT(A) UPHELD FINDING OF AO ABOUT REJECTION OF BOOKS OF AC COUNTS U/S. 145(3) BUT GAVE RELIEF BY REDUCING TRADING ADDITION? HELD, RECORDING OF RE ASONS IS PART OF FAIR PROCEDURE? AS OBSERVED IN ALEXANDER MACHINERY (DUDLEY) LTD. CR ABTREE, 1974 L.C.R. 120, FAILURE TO GIVE REASONS AMOUNTS TO DENIAL OF JUSTICE AS ALS O OBSERVED BY APEX COURT IN 2005 (2) SC 329 MANGALORE GANESH BEEDI WORKS VS. CIT & A NR? IMPUG NED JUDGMENTS OF ITAT WAS STEREO TYPED, NON - SPEAKING, UNREASONED, ARBITRARY AND WHIMSICAL? HENC E QUASHED AND SET ASIDE TO BE DECIDED AFRESH AND DE-N OVO IN ACCORDANCE WITH LAW. WE ALSO FIND THAT THE LOWER AUTHORITIES ARE EMPOWER ED UNDER THE INCOME TAX ACT TO REJECT THE BOOKS OF ACCOUNTS WHERE THE ASSESSING OF FICER IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE. IT IS RELEVANT TO REPRODUCE THE PROVISIONS OF SECTION 145 OF THE ACT WHICH READ S AS UNDER METHOD OF ACCOUNTING (1) INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OR 'INCOME FROM OTHER SOURCES' SHALL, SUBJECT TO TH E PROVISIONS OF SUB-SECTION (2), BE COMPUTED IN ACCORDANCE WITH EITHER CASH OR MERCANTI LE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. (2) THE CENTRAL GOVERNMENT MAY NOTIFY IN THE OFFICIAL GAZETTE FROM TIME TO TIME [INCOME COMPUTATION AND DISCLOSURE STANDARDS] TO BE FOLLOWED BY ANY CLASS OF ASSESSEE OR IN RESPECT OF ANY CLASS OF INCOME. (3) WHERE THE ASSESSING OFFICER IS NOT SATISFIED AB OUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE, [HAS NOT BEEN REGU LARLY FOLLOWED BY THE ASSESSEE, OR INCOME HAS NOT BEEN COMPUTED IN ACCORDANCE WITH THE STANDARDS NOTIFIED UNDER SUB- SECTION (2)], HAVE NOT BEEN REGULARLY FOLLOWED BY T HE ASSESSEE, THE ASSESSING OFFICER MAY MAKE AN ASSESSMENT IN THE MANNER PROVIDED IN SE CTION 144.] KEEPING IN VIEW THE ABOVE PROVISIONS OF THE ACTS AN D CASE LAWS CITED ABOVE, WE FIND VERY CLEAR CUT FINDINGS FROM THE AO ORDER WHICH STA TES THAT ASSESSEE HAS NOT ITA NO.562/KOL/2013 A.Y.2006-07 BHAGIRATHI ASSOCIATES VS. ITO W D-1(2), HG. PAGE 7 MAINTAINED ANY PARTY WISE LEDGER ACCOUNT, NO BILLS OR PAYMENT VOUCHERS WERE PRODUCED AGAINST THE PURCHASE EXPENSES, ALL THE NEC ESSARY BOOKS WERE NOT MADE AVAILABLE, THE CREDITORS DETAILS WERE SUBMITTED WIT HOUT THEIR OPENING BALANCE. WE ALSO FIND IN MAKING A BEST JUDGMENT ASSESSMENT THE ASSES SING OFFICER DOES NOT POSSESS ABSOLUTELY ARBITRARY AUTHORITY TO ASSESS AT ANY FIG URE HE LIKES AND THAT ALTHOUGH HE IS NOT BOUND BY STRICT JUDICIAL PRINCIPLES HE SHOULD B E GUIDED BY RULES OF JUSTICE, EQUITY AND GOOD CONSCIENCE [ ABDUL QAYUM & CO. V. CIT, (1993) 1 ITR 375, 378 (OUDH). A BEST JUDGMENT ASSESSMENT IS NOT BY WAY OF PENALTY F OR NON-COMPLIANCE [ JOT RAM SHER SINGH V. CIT, (1934) 2 ITR 129 (ALL)] AND IT CANNOT BE MADE CAPRI CIOUSLY IN UTTER DISREGARD TO THE MATERIAL ON RECORD [ GUNDA SUBBAYYA V. CIT (1939) 7 ITR 21, 26-27 (MAD-FB); CIT V. S.SEN (1949) 17 ITR 355 (ORI). IN VIEW OF ABOVE WE ARE OF THE CONSIDERED VIEW THAT THE LOWER AUTHORITIES SHOULD H AVE REJECTED THE BOOKS OF ACCOUNTS. ACCORDINGLY WE ARE INCLINED TO RESTORE THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION AS PER LAW AND TO FRAME THE ASSESSMENT DE-NOVO AFTER REJECTING THE BOOKS OF ACCOUNTS. SINCE WE HAVE DECIDED ISSUE RAISED BY ASSESSEE IN GROUND NO.7 BY REJECTING THE BOOKS OF ACCOUNT AND ESTIMATING THE R EASONABLE PROFIT ON THE BASIS AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. HENC E THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. REMAINING GROUNDS DO NOT CALL FOR ANY ADJUDICATI ON AT THIS STAGE BECAUSE THE FILE HAS BEEN RESTORED TO THE AO FOR DECIDING THIS ISSUE AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 6. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 10 /08/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP ! - 10/08/2016 / KOLKATA ITA NO.562/KOL/2013 A.Y.2006-07 BHAGIRATHI ASSOCIATES VS. ITO W D-1(2), HG. PAGE 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-BHAGIRATHI ASSOCIATES, 23 & 24, BAZAAR L ANE, CHATRA, HOOGHLY-71 2004 2. /RESPONDENT- ITO, WD-1(2), HOOGHLY-712101, W.B 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. BY ORDER/ , /TRUE COPY/ / '#,