Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 40 - ITAT SURATUnexplained cash credit in the bank account u/s 68 - Addition on excess sales - Profit of excess sales - correct method to compare monthly sales with the previous year’s monthly sales - HELD THAT:- Abnormal sales in the month of October 2016 created doubt in the mind of lower authorities. The explanation of assessee about exceptional jump in the sales particularly in cash sales was that market is governed by various factors like agriculture sales, festivals and marriage seasons, was also not accepted by lower authorities. As independently considered such facts and find that there cannot be such abnormal jump in the sale all of sudden. However, facts remained the same that the lower authorities have not investigated the fats from the details of purchaser provided by the assessee. Therefore, avoid the possibility of revenue leakage instead of entire difference in sales the profit element should be taxed. Hence, we direct the assessing officer to treat 25% of profit on the excess sales identified by AO. To make it more clear, 25% of addition is treated as profit of the assessee qua the alleged unidentifiable sales. In the result, ground of the appeal is partly allowed. Addition u/s 115BBE - As directed the assessing officer to taxed the profit element only. The addition which is sustained to that extent be treated on account of business income and be taxed under normal provisions of the Act. Hence, ground No. 4 of the appeal is allowed.
|