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2012 (9) TMI 189 - ITAT, HYDERABADUnaccounted deposits in bank account & sale proceeds - search and seizure operation - assessee adopted the rate of 5% of the total deposit as income from unaccounted sales for AY 2005-06 - Held that:- AO was not justified in treating the entire deposits in ICICI bank as unaccounted income of the assessee as that once the deposit in the bank has been accepted by the AO as unaccounted sales proceeds, then, the entire amount cannot be treated as undisclosed income - the estimation of the profit on account of unaccounted sales cannot be made on the line of profit on accounted sales since the assessee has already booked all indirect expenses in the books of account, therefore, the profit from the unaccounted sales is required to be worked out by reducing the direct expenditure relating to the unaccounted sales. Therefore, for computing the profit on unaccounted sale, the gross profit ratio on the accounted sale is a relevant factor - AO is accordingly, directed to compute the profit on deposits in the ICICI bank by taking the rate equivalent to the GP rate declared by the assessee - in favour of assessee. AY 2007 – 08 - addition of the peak credits - Held that:- As assessee admitted the deposits in the ICICI bank account as representing unaccounted sales proceeds and, accordingly, worked out the total unaccounted income at Rs. 25,45,500/- being the difference of total unaccounted sales including the deposits made in the bank account and the expenditure as recorded in the seized diary AO was bound to give credit for undisclosed income of Rs. 25,45,500/-already arrived at and added to the income of the assessee while making the addition on account of peak credit - same amount cannot be taxed twice once as offered by the assessee being profit on unaccounted sales and again being part of peak credit - in favour of assessee. AY 2008-09 - unexplained money by taking peak cash credit/balance as on 30/12/2007 - Held that:- When the entire transactions recorded in the seized diary were taken into account while computing the profit from unaccounted sales as well as peak credit, then, a further addition on account of peak credit, which is very much part of the entries of the diary already considered cannot be permitted - in favour of assessee.
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