Contractor-non production of books of accounts
P.Parthasarathi
(Querist) 05 September 2012
This query is : Open
My client is a contractor having maintained books of accounts which were audited but by the time the assessment came up for scrutiny the books of accounts were lost in a theft and so he could not produce them before the Assessing Officer. Basing upon the figures in the P & L account and Balance sheet the AO made various additions disbelieving their genuineness resulting in a high pitched assessment. The tribunal of Cuttack Bench fixed the profit rate to be taken at 9% of the gross receipts from contract business whereas, the income assessed in this case, if calculated on percentage basis is more than 35% of the contract receipts. Is there any case law in which the Hon courts have held that profits from this business or for that matter, any other business, cannot be assessed at an unreasonable high rate where books of accounts were not produced or produced but rejected u/s 145 of the I.T.Act. Also that without bringing any other material to record to prove that the figures in the balance sheet and P and L account were not reliable, except that the books of accounts were not produced, can the AO make such additions? Any case law in this regard also may kindly be mentioned. The matter is now in appeal and I shall be grateful for an advise with case law in this regard as the appeal came up for hearing and an adjournment has been sought in order to find the suitable case law to be placed before the appellate authority.
