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2013 (11) TMI 59 - ITAT AHMEDABADRate of gross profit to be adopted for unaccounted sales - During the search by the Central Excise Authorities shortage of stock was found and the same was confirmed by first appellate authority. The learned AO has considered the entire value of the unaccounted stock as sales of the assessee and the full value was considered as income – Held that:- Learned CIT(A) vide his order had directed to adopt the average GP rate of last three years on the said unaccounted sales as the income of the assessee. From the copy of the annual accounts placed on record it is seen that the assessee is having loss in the year under consideration and even in the immediately preceding assessment year i. e. no gross profits. It is settled law that the entire sales cannot be considered as income but only the profit embedded in it is to be considered as income. However, considering the peculiar circumstances of the case and the totality of the facts, lump sum addition made in the present case would meet the ends of justice - Addition be restricted to 10% of the unaccounted sales i.e. Rs.30,53,238/-- Decided partly in favor of Revenue.
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