- (1.) OFFICE objection is overruled.
(2.) HEARD learned Counsel for the appeEant. This appeal is directed against the order of Tribunal, Jodhpur Bench, Jodhpur, dt. 14th Sept., 2004. The Revenue seeks to raise following substantial question of law arising for consideration in this appeal: Whether on the facts and in the circumstances of the case and in law, the learned Tribunal was justified in upholding the order of learned CIT(A) deleting the addition of Rs. 13,53,310 by holding that there was no specific finding recorded by the AO for rejection of the book results and in the absence of any defects in the books of account, the CIT(A) was justified in deleting the impugned addition ?
(3.) THE AO has rejected the books of account of assessee. The books of account were rejected not on the ground that any of the details of sale and purchase were found to be wrong but on the basis of amount paid for power and fuel consumption to the Electricity Department. The AO assumed that looking to the bills of RSEB, the actual production should be generated more than whatsoever have been disclosed and to that extent sales must have also been more. On this account, the books of account were rejected and the AO resorted to best judgment assessment by adopting the GP rate of 52 per cent and total income was computed as nil by rejecting the claim of assessee for carrying forward loss of Rs. 11,89,487. On appeal, the CIT(A) found that the rejection of the books of account was not warranted on the basis of the expenses shown on the power consumption. It was noticed that during the assessment period, the assessee was required to pay minimum charge rather than actual electricity consumption, which the assessee has contested before the Court successfully and ultimately the assessee was made to only actual consumption. Thus, the books of account have been rejected on non -existing grounds and merely on surmises in a very casual manner. Consequently, the result shown in the books was accepted and the additions made by AO were deleted. The Tribunal on second appeal recorded the finding as under: We have heard both the parties and given our thoughtful consideration to the rival submissions with reference to facts, evidence and material on record. From the facts discussed above, it is obvious that the assessee had started production in the middle of accounting year relevant to the assessment year under reference. The AO has not given any specific finding for rejection of book results. He has also not pointed out any defects in the books of account maintained or the method of accounting followed. There is no material placed on record to show any instance of suppression of sales or inflation of purchases or expenses. The AO was wrong in drawing adverse inference against the assessee by only referring to the electricity expenses. The Electricity Department had charged the assessee at the minimum rate rather than actual consumption. This is precisely for this reason that the assessee contested the account of the Electricity Department in the Court of law and the matter was decided by the Court in its favour. In any case, the Revenue has not placed any material on record to controvert the finding of the CIT(A) that the assessee was charged electricity not at the minimum rate but on actual consumption. Thus, there being no specific finding recorded by the AO for rejection of the book results and in the absence of any defects in the books of account, we are of the considered opinion that the CIT(A) was justified in deleting the impugned addition. We confirm his order and dismiss both the grounds of appeal of the Revenue.;