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2015 (7) TMI 289 - AT - Income TaxDifferences in accounting the purchases and sales in the books of account - Held that:- On an appreciation of the material on record, we find it difficult to accept the contention of the assessee that the audited books of account have to be disregarded and the re-cast accounts are to be accepted. It is the finding emanating from the survey on 9.3.2007, that there were unaccounted purchases and sales made in the period June, 2006 to August, 2006 which has not been controverted by the assessee. Whatever may be the reasons for the unaccounted purchase and sales; the fact that there were such purchases and sales which were not reflected in the audited books of account has been fairly accepted by the assessee. We, therefore, agree with the action of the Assessing Officer in treating the unaccounted purchases and unaccounted sales as being outside the audited books of account. - Decided against assessee. How to assess the income from out of the unaccounted purchases and sales - AO determined the addition at ₹ 25,64,032 as the difference between the unaccounted sales and purchases - CIT (Appeals) had taken the profit element on the unaccounted sales at ₹ 1,69,281 (i.e. at 1% of unaccounted sales of ₹ 1,69,28,140) and considered the balance amount of the difference as unexplained investment and adjusted the same in the closing stock - Held that:- In our view, this approach of the learned CIT (Appeals) cannot be faulted as the assessee itself has adjusted the closing stock in the re-cast accounts. In this view of the matter, we concur with the findings of the learned CIT (Appeals) that the difference between the unaccounted sales and purchases would include an amount of ₹ 1,69,289 towards suppressed profits from the unaccounted transactions and the balance amount represents the undisclosed investment in unaccounted purchases.- Decided against assessee.
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