TMI Blog1999 (5) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ot shown in the books of accounts. On the basis of entries recorded in documents seized at Annexure E-6, E-7 and E-8 unaccounted purchases made by the assessee for various years were determined. All these workings are shown in the assessment order for asst. yr. 1988-89 which is part of the record before the Tribunal. It was admitted by the assessee that the determined figure of purchases are outside his regular books of accounts. It was also admitted that sales are also made outside books of accounts but it was prayed that sales may be estimated on the g.p. rate declared by him. In his regular books of account as no details of sales were available with the assessee. It was also requested that after making first purchase, the sales were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment. The total unrecorded stock which was excess by Rs. 1,74,893. Further, a credit-sale of Rs. 50,191 was also found which was not recorded in the books of account. Thus a stock of Rs. 2,25,084 was found to be in excess. Yearwise, excess stock was determined which was as under: Rs. 1983-84 10,000 1984-85 9,188 1985-86 30,267 1986-87 9,238 1987-88 31,270 1988-89 33,581 1989-90 21,692 -------- 1,45,236 -------- In this way the profit for the year i.e. 1989-90 was determined at Rs. 21,692. As the assessee was confronted and to cover up the unrecorded and unexplained investment in purchases, profit on such sales and difference in stock and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Del), R.B. Jessa Ram Fateh Chand vs. CIT (1971) 81 ITR 409 (All), J.K. Synthetics Ltd. vs. O.S. Bajpai, ITO Anr. 1975 CTR (All) 265 : (1976) 105 ITR 864 (All), Addl. CIT vs. P. Nammalvar Naidu Sons (1979) 8 CTR (Mad) 72 : (1979) 116 ITR 863 (Mad), Pioneer Spring Steel Concern (P) Ltd. vs. CIT (1979) 10 CTR (Cal) 322 : (1983) 135 ITR 522 (Cal) and Director of Inspection of IT (Inv. Anr. vs. Pooran Mall Sons Anr. 1974 CTR (SC) 243 : (1974) 96 ITR 390 (SC). 6. After considering all the materials, we find that details of unrecorded purchases were determined yearwise. By accepting the peak theory, the yearwise profit was also determined which we have shown in the foregoing paras. The assessments upto the asst. yr. 1988-89 were comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee. It is correct that the confession cannot be foundation of assessment and nor creates any estoppel. This was held by apex Court in Pooran Mal's case. It is a well settled law that the cognizance should not be taken on the statement made by a person at the time of search if that statement is rebuttable or assessee on a later stage explains his position. In the present case, of course, the confession was made and a surrender of Rs. 2,50,000 was made. However, on a later stage the profits of the assessee for various years were determined and that determination was based on material found during the course of assessment. The Department has accepted partly and AO himself made a protective addition of Rs. 1,04,000 and odd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per trading account for the period from 1st April, 1988, to 27th May, 1988, the excess stock is of Rs. 1,75,032. This is as per trading account filed by assessee, and a copy of the same is placed at p. 8 of the paper-book. There is one more discrepancy. After that period, a sale of Rs. 50,191 was found not recorded in the books of account. This is also not considered for the purpose of profit and as per assessment order of the AO at p. 3 this point is discussed by the AO. As per AO the excess stock was Rs. 1,74,893 and if this amount of Rs. 50,191 is added then the excess stock will come to Rs. 2,25,084. This, in our opinion is not considered. Therefore, we are of the view that matter should go back to the file of the AO for determination o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee surrendered a sum of Rs. 2,50,000 on estimation basis to be included in the total income. Now the assessee has prepared the datewise statement of unaccounted purchases and sales. According to this statement, stock remaining out of unaccounted stock and sales amounts to Rs. 1,73,560. This stock when totalled with stock roughly tallied with the physical stock found. On the basis of this statement, the AO has worked out the unaccounted income including speculation income, profit on unaccounted sales and unrecorded investment in various years. After that the figures determined by the AO as stated in foregoing paras were mentioned and after these figures the assessee gave further note that the income of the various assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X
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