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2023 (10) TMI 396 - ITAT DELHIExcess cash found as a result of survey - assessee has surrendered said excess cash and offered the same for taxation in the statements recorded during the course of survey - HELD THAT:- From the basis taken by the Assessing Officer for making addition and conclusion drawn by the ld. CIT(A), first of all, we note that the assessee before the authorities below consistently submitting that the sales in post survey period has been increased by the amount of excess cash found which was a result of cash sales not recorded in the cash book and thus the same has been declared by way of inclusion in the post survey sales. Also we clearly note that the assessee has shown the excess cash amount as sales on the date of survey i.e. 19.02.2014 which reveals the fact of inclusion of impugned amount in the sales shown by the assessee at the end of financial period and thus said amount, included as sales in the books on the date of survey, clearly show that the same was part of sales declared by the assessee for the relevant period. In view of above, no further addition is required to be made and any further amend will result into double taxation. Accordingly, ground no. 3 of assessee is allowed. Addition on account of excess stock found during the survey and surrendered as income under the head "Undisclosed Income” - As argued same being declared as income by way of profit/part of taxable income, there is no case of any further addition - HELD THAT:- We are in agreement with the contention of ld. AR that in absence of stock register it cannot be presumed that entire stock inventorised by the survey team was unaccounted stock and there must be some accounted stock also on the date of survey which was included by the survey team in the inventory prepared on the date of survey. Consequently, we are inclined to hold that even the GP rate declared by the assessee and accepted by the Department i.e. 3.45% turnover is an appropriate and undisputed bench mark for making reverse calculation to ascertain closing stock on the date of survey as on 19.02.2014 or on the date of end of financial period i.e. 31.03.2014. As per trading account discernable from the audited balance sheet of assessee which has not been disputed by the ld. Senior DR the closing stock comes to Rs. 26,90,788/- by taking gross profit rate @3.45%. As considering the undisputed fact that the survey team has taken entire inventory of stock as undisclosed stock without providing credit of any accounted stock which is not acceptable even for a person ordinary prudent that the person undertaking purchases of Rs. 57.32 crore and making sales of Rs. 61.95 crore would not have any disclosed or unaccounted/excess closing stock on the date of survey. It is also relevant and pertinent to mention that the survey team has added and considered all stock on the date of survey as unaccounted/excess stock of assessee placed in two places of Azadpur Mandi and two cold storages which is not justified and correct approach. Therefore in our considered opinion that assessee eligible for credit of Rs. 26,90,788/- as closing stock out of alleged uncounted stock of Rs. 72,23,450/-. Accordingly, ground no. 4 is partly allowed.
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