ADARSH KUMAR GOEL, J. - (1.) THE assessee has preferred this appeal under s. 260A of the IT Act, 1961 (in short, 'the Act') against the order of the raise following substantial questions of law : "(i) Whether in the facts and circumstances of the case, the Tribunal is justified in upholding the rejection of books of account as done by the AO particularly when the AO had not recorded any satisfaction about the correctness and completeness of the books of account ? (ii) Whether the books of account can be rejected under s. 145(3) without recording any satisfaction with regard to its correctness and completeness ? (iii) Whether in the facts and circumstances of the case, the Tribunal is justified in estimating the sales of the appellant company at Rs. 6,00,00,000 against declared sales of Rs. 5,58,80,907 without giving any reason or finding in this regard ? (iv) Whether in view of the facts and circumstances of the case, the Tribunal is justified in estimating the GP rate @ 32 per cent as against declared GP rate of 24.95 per cent ? (v) Whether the books of account can be rejected merely because there was a surrender during the survey proceedings ? (vi) Whether the books of account can be rejected while framing the assessment under s. 143(3) without recording any satisfaction regarding the correctness and completeness of the books -
(2.) ON a survey being conducted under s. 133A of the Act, the survey team prepared inventories of stocks at the premises of the assessee and found that only a part of the stock was entered in the books of account. The assessee surrendered income of Rs. 60,00,000 by way of excess stock. During the assessment, the AO held that complete stock was not reflected from the books of account and made best judgment assessment. The CIT(A) upheld the plea of the assessee that the excess stock was accounted for during the survey and thereafter, addition on account of GP rate by estimating the turnover was not called for. The Tribunal upheld the view of the AO regarding the rejection of books of account and applied GP rate of 32 per cent as against 35 per cent applied by the AO.
(3.) THE substantial questions of law framed by the assessee, in effect, relate to the findings recorded after appreciation of evidence. A perusal of the order of the AO shows that explanation of the assessee about books of account having been regularly maintained was rejected by giving detailed reasons. The Tribunal also upheld the finding that the assessee was having sale and purchase outside the books of account and the estimate of sales based on best judgment was upheld. The Tribunal has considered all the points raised by the assessee and also referred to its earlier order upholding the rejection of books of account. The Tribunal also held that the CIT(A) overlooked the reasons given by the AO for rejecting the book results. It is not a case where books of account are properly maintained and the AO has substituted his own estimate ignoring the books of account, without giving any reasons. There is no patent error in the view taken by the Tribunal that books of account of the assessee could not be accepted as the same did not reflect true income.;