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2022 (4) TMI 616 - AT - Income TaxEstimation of profit on the suppressed sale - Additional undisclosed income - bogus/ suppressed sales - cash found during the course of search proceedings by the excise department - AO worked out the undisclosed sales applying GP rate of 10.32% on the cash seized & thereafter worked out the GP rate of @25% on the said bogus/ suppressed sales - CIT-A deleted the addition - HELD THAT:- The assessee was engaged in making clandestine sale in order to avoid the excise liability. The assessee from such activity has generated the income which was the cash found during the course of search by the excise department. Thus, it is inferred that such cash was generated by the assessee from the unaccounted business sales carried out by it. It is also a fact on records that the assessee has duly complied with his commitment made before the revenue for disclosing the income of the unaccounted cash. The revenue has not brought anything on record pointing out the amount of suppressed sale exceeds what has been determined by the excise department. Thus in the absence of any contrary information, we hold that the amount of suppressed sale stands at ₹ 6,40,52,547/- which contains the amount of gross profit of the assessee not offered to tax. Be that as it may be, the income of the assessee cannot exceed the amount of cash found during the course of search by the excise department. It is for the reason that the maximum amount which was found unaccounted can only be brought to tax until and unless there is any other material found during the search suggesting that there was any other income other than the income embedded in the suppressed sales. Furthermore, the revenue has not brought any material on record suggesting that the assessee has made suppressed sales over and above the amount determined by the excise department. Thus in the absence of any information available on record, we hold that the AO has wrongly determined the gross profit by working out the suppressed sale more than the amount determined by the excise department. Thus the appeal filed by the revenue is hereby dismissed and the CO filed by the assessee is allowed.
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