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2012 (11) TMI 709 - ITAT AHMEDABADAddition on account of cash found at the time of search – Held that:- Assessing Officer after giving credit of business cash of Rs.44,213/- as determined by him on page-9 of the assessment order made an addition of Rs.4,49,558/- as undisclosed income of the assessee-company being unexplained cash - explanation of the assessee that the cash found for which the additions have been made was cash-in-hand available with other family members is without any cogent explanation or any evidence – addition upheld – In favor of revenue Addition - unaccounted sales – Held that:- Assessee has already debited all the purchases and expenses in the regular books of account. Thus sales found outside the books of account are nothing but undisclosed income of the assessee and therefore cannot be given the credit for purchases and the expenses and therefore gross profit addition cannot be made – against assessee Addition - unaccounted sales – Held that:- Sales shown by the assessee in the regular books of account tallies with the sales determined by the Sales Tax Department in the sales tax assessment order. The sales declared in the books of account are higher than sales found noted in loose paper – addition deleted – in favor of assessee Addition - unaccounted sales to customers - addition has been made by the Assessing Officer on the basis of notings in various loose papers – Held that:- Assessee has not issued any bill for cash sales and no record except the total amount of sales made during the day is kept and that the bills are issued only for credit sales and the sales made to franchises - in the absence of any expenditure brought on record outside the books by the assessee, the assessee cannot be given the benefit for application of gross profit – In favor of revenue Unaccounted Investment in valuables – alleged that assets are in the name of Shri Meenu M Agarwal and have not attempted to verify the source of the income from which the investment have been made. It is also a fact that Shri Manoj D Agarwal has made a disclosure of Rs.90,000/- as household goods and valuables under VDIS filed by him – Held that:- Source of income in case of the Director is not in his individual capacity but the income shown by the assessee-company and accordingly keeping in view the totality of such circumstances - source of investment in the said assets would logically be the undisclosed income of the assessee-company - AO was directed to treat the investment in question of Rs.60,000/- as made out of undisclosed income of the assessee company and no separate addition was directed to be made – in favor of revenue Addition on account of expenditure incurred in cash – alleged that Shri Kumbharam Jhat could not properly explain how the papers on which details regarding cash payment are made in his handwriting were found and seized from the residential premises of the Director at Rasranjan Complex – Held that:- Shri Kumbharam Jhat in his statement given the name of the parties to whom he has supplied the labour to which the said notings are pertaining, addition cannot be made in the hands of the assessee-company as unaccounted expenditure. The Director of the assessee-company has also explained as to how by mistake the said loose paper has been carried to his residence from factory and as a result, it was found from his residence – addition deleted – In favor of assessee Addition - unaccounted salary to Shri Kiritkumar S Shah – Held that:- In the absence of any incriminating documents found during the course of search and also the Assessing Officer having not given any opportunity to the assessee for cross examination of the person concerned – addition deleted- in favor of assessee Interest u/s.158BFA(1) - assessee contended that Xerox copies of loose papers were made available to the assessee at a very later stage during the assessment proceedings and therefore there was a delay in filing of the return of income – Held that:- Provisos attached to Section 158BFA(2) of the Act have not been considered by the authorities - relief has been granted at the two stages of appeal, hence, that effect ought to have been given while redetermining the quantum of penalty u/s 158BFA(2) of the Act considering the applicable provisions of the said section involved - appeal of assessee is allowed for statistical purposes Refund of the penalty paid – penalty set aside – Held that:- In the case of penalties the burden to show that the penalty has been passed on to another person is on the department and not on the assessee as in the case of duty - penal liability can never be passed on to another person who has not committed the offence - department has to prove that unjust enrichment would mean that some extra effort is required in addition to merely looking at the balance sheet or profit & loss account on the part of the department – In favor of assessee
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