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2023 (4) TMI 367 - AT - Income TaxAdditions on account of alleged unaccounted stock of goods and cash - survey action u/s 133A - assessee had voluntarily disclosed an amount - HELD THAT:- We note that addition was not solely made based on the statement rather it has made based on the evidence and documents collected during the survey proceedings. AO has stated in assessment order that additions were made based on the documents and evidences obtained by the department during the survey proceedings and not based on the statement. CIT(A) has also discussed the documents and evidences obtained by the department during the survey. Hence, addition is not based solely on the statement. We note that at the time of survey the books of accounts were not completed. At the time of assessment proceedings, the assessee has submitted audited books of accounts - assessee has not submitted the reconciliation statement for stock and cash in hand between audited books of accounts and unaudited books of accounts at survey. The assessing officer has also not asked the assessee to submit reconciliation statement, showing differences and items of differences, between audited books of accounts and unaudited books of accounts at survey, about stock and cash in hand. One more opportunity should be given to the assessee to explain the differences in stock and cash in hand, hence this issue may be remitted back to the file of the assessing officer for limited purpose to examine the reconciliation statement. The assessee is directed to submit before the assessing officer, the reconciliation statement, showing differences and items of differences, between audited books of accounts and unaudited books of accounts at survey, about stock and cash in hand. For statistical purposes, the ground no.1 of the assessee is treated as allowed. Rejection of books of accounts u/s 145(3) - assessee submitted that books of accounts of the assessee were audited and the AO without pointing out any mistake in the audited books of accounts rejected the books of accounts u/s 145(3) - HELD THAT:- As during survey unaccounted stock and cash was detected by the survey team which remained to be explained and incorporated in the books coupled with unverifiable purchase renders the books of account incomplete and incapable to show true and correct picture of the relevant year, and hence, the AO was fully justified in rejecting the book of accounts by invoking the provision of section 145(3) of the Act. Hence, we uphold the above findings of ld CIT(A) and ground no.2 of appeal of the assessee is dismissed. Estimation of income - Unaccounted purchase of goods - HELD THAT:- As relying on Pankaj K. Chaudhary [2021 (10) TMI 653 - ITAT SURAT] we are of the view that addition should be sustained at the rate of 6% of bogus purchases instead of 12.5% of the bogus purchases. Therefore, we direct the AO to sustain addition @ 6% of bogus purchases. Unexplained cash credit u/s 68 - HELD THAT:- Assessee has not submitted the relevant documents, that is, bank statement to prove that loans have been repaid in the subsequent year, besides audited books, if any, were not submitted. Counsel undertakes this responsibility to produce the bank statement and other relevant documents before the Assessing Officer. Therefore, we accept the prayer of the assessee and we are of the view that an opportunity should be given to the assessee to produce the bank statements and other documents to prove, identity, creditworthiness and genuineness of the cash credit. Therefore, we set aside the order of CIT(A) and remit this issue back to the file of the AO to adjudicate the issue in accordance with law. Ground allowed for statistical purposes.
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