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2021 (1) TMI 561 - AT - Income TaxUndisclosed income - Search proceedings - receipt in cash - Unaccounted sale - HELD THAT:- No enquiry whatsoever was made by Revenue even at first appellate stage. Further Hulash Sharma is seeking for receipt of ₹ 1 Lac paid by them in cash and name of ‘Mukesh’ is struck off in the said seized letterwhich also strengthen our view that this ₹ 1 Lac received by assessee is against the bill no. 126. There are other dealings of the assessee with the said party M/s Mukesh Kumar and Company during the year under consideration and even payments vide cheque was received hence we accept the contention of the assessee on the touchstone of preponderance of probabilities. The assessee has discharged its primary onus and it was for the Revenue to have brought evidence to demolish the story set up by assessee in order to unravel the truth, which Revenue failed to do so. We allow the appeal of the assessee because on touchstone of preponderances of probability, we are of the considered view that the assessee has accounted for sale of ₹ 1 Lacs and also cash of ₹ 1 lacs as is mentioned in the seized documents was received by assessee and was duly recorded in the books of accounts of the assessee and offered for taxation, thus, we accept the contention of the assessee to this effect. The assessee’s appeal is allowed on this ground. Addition of sales outside books - assessee posting stock covered by sales in the stock register - HELD THAT:- The assessee corrected this mistake in the stock register on 31st August 2009, after conclusion of search operations. In our considered view this is a plausible and genuine human error in posting of entry in the stock register and based upon material on record, we do not find any mala fide or malice on the part of the assessee to defraud Revenue by posting this entry wrongly in stock register, rather it is a genuine human error . Under these circumstances on touchstone of preponderance of probabilities, we hold that this is a genuine and bonafide human error in posting of stock in the stock register while posting sale invoice, and the assessee cannot be saddled with tax liability merely on the ground that there was some human error while making postings in the stock register. We hold that this is a genuine and bonafide error made by the assessee while posting stock covered by sales in the stock register and we order deletion of addition . Addition of receipts / payments as found mentioned in loose documents seized by Revenue - HELD THAT:- As assessee is not able to justify and/or connect these receipts / payments as are found mentioned in loose documents seized by Revenue, with the transactions sought to be explained by assessee as are recorded in its books of accounts, and the explanation which is made by the assessee are merely an after thoughts to wriggle out of tax ambit. Thus, we reject the contention of the assessee on this issue and uphold /sustain the additions as was made by AO and which was later sustained / upheld by learned CIT(A). We order accordingly. Deduction from income towards purchases of raw material and consumables - HELD THAT:- The assessee has to justify that these purchases/consumables are used for its business. The manufacturing process is to be brought on record by assessee with respect to manufacturing activities carried on by the assessee and details of raw material and consumables required in connection with the manufacturing process carried on by assessee or for other business needs of the assessee is required to be brought on record. Thus based on material on record, in the interest of justice and fairness to both the rival parties, we restore the matter back to the file of the AO for fresh consideration and denovo determination of the issues on merits in accordance with law. Disallowing expenses towards freight charges - HELD THAT:- CIT(A) has given finding that there was an inadvertent mistake mentioned of date of 25.02.2009, instead of correct date 25.03.2009. The learned CIT(A) has also mentioned that form no 16A was produced before him. The assessee has not filed proof of payment of TDS as well no Form No. 16A is filed before us. Thus, under these circumstances, we are restoring the matter back to file of AO for limited verifications of facts contended by assessee before learned CIT(A), such as correct date, payment of TDS, form no. 16A . We order accordingly.
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