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2015 (8) TMI 1084 - AT - Income TaxAddition on account of sale outside books at ₹ 20,91,360/- - Held that:- Find force in the contention of assessee that exhibit-138 and 139 have to be read together and the entries in exhibit 138 has to be considered while considering the entries in exhibit-139. That being so, set off of 687898.99 mtrs has to be given in 909289.17 mtrs., resulting into shortage of 221390.18, at the most this has to be considered as sold outside the books. Further, a perusal of the comparative chart show that the average profit of 5 years comes to 14.90% therefore the adoption of 20% appears to be on the higher side. Thus we hold that shortage of 221390.18 at the most can be considered as sold outside the books. The AO is directed to recompute the profit on sale of this stock @ 14.90%. - Decided partly in favour of assessee. Addition u/s. 69C - Held that:- While adjudicating ground No. 3 below as referred to the relevant portion of the statement recorded at the time of survey and we have mentioned the answer to question No. 34 wherein the Managing Director has specifically said that the cash sales have been utilized for making the labour payment and therefore the cash generated out of the sale of scrap can be accepted as utilized for making the payment of ₹ 9,77,200/- and therefore no separate addition is called for. We, accordingly direct the AO to delete the addition of ₹ 9,77,200/- which is treated as unexplained expenditure u/s. 69C - Decided in favour of assessee. Addition on account of sale of fents, bhangars and chindies - Held that:- If the statement made by the Managing Director at the time of survey is considered in the light of the business activities of the assessee, it can be safely concluded that the assessee has been making sales outside the books in respect of the scrap generated during the course of its business activities. Therefore, the income offered by the assessee in its revised return of income can be accepted as having included in the cash sales generated out of the scrap. Therefore, in our considered opinion and understanding of the facts of the case in hand, the addition of ₹ 29,09,456/- is unjustified as the same is already offered in the revised return of income by the assessee. We, therefore, set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition - Decided in favour of assessee. Disallowance of claim for deduction u/s. 80HHC - Held that:- Since we have deleted the addition made u/s. 69C at ₹ 9,77,200/- and have also deleted the addition of ₹ 29,09,456/-, there is no question of any computation of deduction u/s. 80HHC of the Act, only the addition on account of alleged sale of stock have been modified by us. The AO is directed to decide this issue after giving appeal effect to our order and after giving a reasonable opportunity of being heard to the assessee.- Decided partly in favour of assessee for statistical purpose.
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