Calcutta HC dismisses
assessee’s appeal with costs for AY 2005-06, confirms addition based on the
balance-sheet and P&L account prepared for availing bank loan and certified
by Chartered Accountant in Form 3CB; Observes that the figures in audit report
in Form 3CB (issued in July, 2005) were at variance with actual audited balance
sheet and P&L account for the said period, notes that the difference
between the two was due to the over-valuation of the fixed assets for availing
of the bank loan; Assessee had argued that it is usual practice to draw up
accounts on the basis of estimates for the presentation to a bank at a time
prior to when the assessee is statutorily required to complete the annual
accounts and that addition cannot be made based on such estimated figures in
Form 3CB; Rejecting assessee’s stand, HC quashes the practice of
window-dressing of accounts for making it attractive for bankers and
subsequently removing the gloss and sheen at the time of paying taxes; HC
observes that certificate issued by the CA firm in Form 3CB purported to give
an impression that it was in exercise of an audit as required u/s 44AB (for
which Form 3CD is prescribed), however it was presented in a statutory form
with the fine print of paragraph 2(A) thereunder indicating that it was only an
estimate; HC remarks that “It is scarcely expected of a banker to question the
veracity of any accounts certified by a firm of chartered accountants or to
look into the fine print and comprehend therefrom that utterly bogus figures
had been furnished only for the purpose of availing of the credit facilities
from the bank.”; HC rules that “the balance-sheet and profit and loss accounts
of an assessee accompanied by a certificate as to its fairness, notwithstanding
the caveat as noticed in paragraph 2(A) thereof, cannot be tailor-made to suit
a particular purpose…”; Applies the doctrine of pari delicto to preclude the
assessee from detracting from the figures contained in the balance-sheet and
profit and loss accounts certified on July 18, 2005 at any subsequent stage;
Directs Registrar to forward the copy of this order to ICAI for appropriate
steps to be taken against the CA firm.:HC
No comments:
Post a Comment