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2016 (1) TMI 168 - AT - Income TaxUnder valuation of stock up to the date of survey by deducting 18.55% for gross profit - CIT(A) deleted the addition - Held that:- The assessee has prepared separate trading account for pre-survey period and post survey period. The assessee has also given gross profit rate and net profit rate in post survey period qua survey period as compared to pre-survey period. Ld. Counsel for the assessee drew our attention to the gross profit rate calculation made by the survey party and valued the stock after reducing approximately 10%. In view of the above explanation given by assessee’s counsel, which was never negated by Ld. Sr. DR, we find that the reduction made by CIT(A) at 18.5% of G.P. rate from the date of survey in consonance with the facts of the case. Actually, the value of stock on the date of survey as per books of account ₹ 4,30,93,290/- and in addition to the stock of ₹ 17,62,820/- was lying with the Karigars. This stock as per books of account of the assessee at ₹ 4,30,93,290/- comprises of gold jewellery of ₹ 3,63,05,575/- and separate diamond stock of ₹ 67,87,715/-. Even otherwise, if we go by rate of gold on the date of survey taken by valuation officer at ₹ 11,965/- as against the rate of ₹ 9395/- the increase is almost 28%. In term of the above facts, we find that the CIT(A) has rightly applied the gross profit rate of 18.55% for reduction of the value of stock and we confirm the same - Decided against revenue Addition being difference between the undisclosed income recorded in the impounded documents MJ-4 and undisclosed income declared by assessee - CIT(A) deleted the addition - Held that:- The assessee has brought out estimated income out of sales at ₹ 2,31,700/-. But in a nutshell, the assessee has offered an income of ₹ 13,50,000/- being undisclosed income out of the above undisclosed transaction of sales and purchases. When a query was put to Ld. Sr. DR from the bench, he could not answer whether there is only sales or purchase element is also there, if we take the transactions of sale as well as purchase then net profit is to be estimated and also some investments. If we apply net profit rate of 19.55% as declared by assessee to the sale of undisclosed transaction at ₹ 38,57,105/- the profit will come to ₹ 7,15,493/- and further we estimate some investments of ₹ 2 to 3 lacs the total will come at ₹ 10,15,943/-. In any case, the assessee has made disclosure of ₹ 13.50 lacs on this account, which is higher than the income is to be estimated out of the undisclosed transactions of sales and purchases. Accordingly, we have no hesitation in confirming the action of CIT(A) in deleting the addition - Decided against revenue Disallowance of expenses made by AO being interest payment without deduction of TDS by invoking the provisions of section 194 - CIT(A) deleted the addition - Held that:- We find that the assessee has received declaration in form No. 15G from the payee of the interest i.e. Smt. Narayani Devi Agarwal and once the assessee received form no. 15G he is not liable to deduct TDS and hence, no disallowance can be made u/s. 40(a)(ia) of the Act. - Decided against revenue
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