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2020 (10) TMI 1014 - AT - Income TaxShortage of stock as sales outside the books and applying GP Rate thereon - HELD THAT:- CIT (A)'s reasoning for treating it as sale to M/s PBR Agro, we find, is patently absurd. Merely because the payment has been received in lieu of stock, does not make it sale consideration. There is a huge difference between sale consideration and compensation and the two cannot be equated. And the assesseee having proved with evidence that the shortage in stock was on account of misappropriation by M/s PBR Agro Industries and the revenue not having brought before us any evidence to the contrary to controvert this explanation of the assessee, the payment cannot be said to be on account of sale. Hold the explanation of the assessee for the shortage of stock to be bonafide and direct the deletion of addition made to the income of the assessee by treating the shortage of stock as sales outside the books and applying GP Rate thereon. Addition on account of cash found short by invoking the provisions of Section 68 and also holding that the same to be taxed u/s 115BBE - addition made to the income of the assessee on account of cash found short with the assessee - HELD THAT:- Cash short, at the most represents expenses / outgoings out of cash available with the assessee not accounted for in the books of the assessee. Such unaccounted expenses are sourced from cash available with the assessee. How therefore can they be treated or deemed to be income of the assessee u/s 69/69B/69C of the Act when the said sections deem investments/money, the source of which the assessee offers no explanation about, as income of the assessee . We therefore hold that there is no case for making any addition on account of cash found short with the assessee and the addition is directed to be deleted. - Appeal of the Assessee is allowed.
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