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2016 (10) TMI 1322 - ITAT AHMEDABADSuppressed sales/unaccounted sales - clubbing turnover of Swastik Polymers with the assessee firm - on the basis of information received from Central Excise Department with regard to suppressed sales there were two proprietorship firms out of which one named M/s Subham Polymers owned by Shri Ashokkumar C. Dharewa HUF, (the assessee) and the other named M/s Swastik Polymer, owned by Shri Bimalkumar Chainroop Dharewa (brother of Shri Ashok Chainroop Dharewa) Karta of HUF - HELD THAT:- Excise Department has mainly clubbed the gross turnover of two concerns M/s Subham Polymers and M/s Swastik Polymers and have taken the clearance value of ₹ 1,52,38,813/- as against total turnover of ₹ 1,52,43,382/- (turnover of Subham Polymers ₹ 87,76,159/- + turnover of Swastik Polymers ₹ 64,67,823/-) as shown in their respective audited financial statements. No case against the assessee of suppressed sales or unaccounted sales, when the turnover as calculated by Excise Department has been shown in separate books of account and they are part of audited books of account and income-tax return furnished. AO has grossly erred in taking the excise limit of ₹ 1.5 crores whereas for the year under appeal excise limit was at ₹ 1 crore. During the course of hearing ld. AR has relied on the judgment of President Industries [1999 (4) TMI 8 - GUJARAT HIGH COURT] wherein it has been held that sale proceeds itself cannot be treated as undisclosed income rather the net profit embedded in the sale should be treated as undisclosed income. CIT(A) while adjudicating the appeal of assessee has rightly given effect to the judgment of President Industries (supra) and has taken the net profit of ₹ 2,27,573/- shown by M/s Swastik Polymers in the audited profit and loss account placed as an addition to the income of assessee at the place of addition towards suppressed sales of ₹ 1,13,24,749/- taken by ld. Assessing Officer. We, therefore, find no reason to interfere with the order of ld. CIT(A) - Decided against revenue.
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