Books of Accounts Cannot be Rejected Without Any Specific Defect: ITAT Kolkata:

Books of Accounts Cannot be Rejected Without Any Specific Defect: ITAT Kolkata The Income Tax Appellate Tribunal (ITAT), Kolkata, ruled that the Assessing Officer (AO) cannot reject a taxpayer's books of account just because the supplier did not respond to the notices sent by the tax authorities.

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ITAT Condones 796-Day Delay in Rs 4.93 Crore Tax Addition Case After Accountant’s Death

The assessee, Jaya Chandra, has filed her return reporting an income of Rs 2,86,92,950. The case was selected for scrutiny under the Computer-Assisted Scrutiny Selection (CASS). During the assessment, the assessee had submitted bills, vouchers, e-way bills, and other documents to prove purchases and sales. However, the books of account of the assessee were rejected just because some suppliers did not respond to the notices issued by the AO. Therefore, the AO estimated profits at 8% of total turnover and made an addition. The ITAT observed that the AO and CIT(A) had rejected the books of accounts without pointing out any specific defect. The tribunal held that rejecting accounts solely because some suppliers did not respond was bad in law.

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Reopening Under Section 147 Invalid If No Addition on Original Ground: ITAT Ahmedabad

Accordingly, the ITAT directed the AO to delete the addition, holding that the books of accounts were wrongly rejected by the AO.