Section 145(3) of the income tax Act, 1961 — Accounting — Method of Accounting — Revenue has not been able to show any defect in the assessee's records which would warrant rejection of books and making a Best Judgment Assessment.[2019] 52 ITCD 63 (BOM)
Facts: Being aggrdived of the order of Tribunal, revenue went on appeal before High Court and raised the question of law that "Whether on the facts and circumstances of the case and in law was the Tribunal justified in holding that in the absence of any defect being pointed out in the records, the invocation of Section 145(3) of the Act was not proper ?"
Held, that it was noted that the books of accounts of the assessee were rejected by the CIT(A) under section 145(3). However, the Tribunal found in the impugned order that the invocation of section 145(3) is unjustified as no defect was noted in the books of accounts to disregard the same. We note that CIT(A) in his order while rejecting the Books of Account does not specify the defect in the record. The basis of the rejection appears to be best judgment of assessment done by him. The rejection of books should precede the best judgment assessment. On facts, the Revenue has not been able to show any defect in the assessee's records which would warrant rejection of books and making a Best Judgment Assessment. Thus, on facts the view taken by the Tribunal is possible view. Therefore, no substantial question of law arises. Thus not entertained.