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TMI Blog2012 (9) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had admitted that entire ICICI account is unaccounted and deposits in the account represent the un-accounted sale proceeds directly deposited by the customers. The assessee neither produced any evidence nor made any claim during search that unaccounted purchases were made from the withdrawals of said account. Otherwise also, the meager withdrawals made from the account cannot be commensurate with the unaccounted sales noticed. 3. The claim of the learned CIT(A) that 5% of the receipts are alone unaccounted is not backed by the any facts/evidences. The learned CIT(A) tried to generalize the specific facts of the case, and the case laws quoted by him are distinguishable from the facts of the case." 3. There was a search and seizure operation under section 132 of the income tax act at the business and residential premises of the assessee on 29/04/2008. During the course of search apart from other incriminating material, the bank account maintained by the assessee with ICICI bank not disclosed to the Department as well as a diary containing certain receipts and payments were found and seized as Annexure A/PS/RES/3. When the assessee was asked to explain the contents of the dia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly for the assessment year 2008-09 where the addition of Rs. 31,85,555/- towards unexplained investment in purchase of stock was upheld. 4. Before us, the Learned the DR has submitted that the assessee has not produced any evidence to show that the withdrawals from the un-accounted account was used for making unaccounted purchases and, therefore, the assessee has failed to prove that the purchases corresponding to the unaccounted sale receipts, which were not debited in the regular books of account. The learned D.R. has further submitted that when the assessee has booked all the expenditure in the regular books of account, then in the absence of any material it cannot be said that the unaccounted purchases are made from the receipts of unaccounted sales. It has been further submitted that the assessee had admitted the entire ICICI bank account as unaccounted deposits represent the unaccounted sale proceeds directly deposited by the customers but no record or evidence has been produced to prove that the unaccounted purchases were made from the withdrawals of said account. Therefore, the total deposits in the ICICI bank account are required to be treated as undisclosed income of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the addition has been made for the respective amounts being deposited in the bank account as well as recorded in the diary found and seized during the search action. Therefore we would discuss these additions year wise as under: I. Assessment year 2005 - 06: 7. During the period relevant to the assessment year 2005-06 an amount of Rs. 3,04,500/- was found deposited in the bank account. The assessee adopted the rate of 5% of the total deposit as income from unaccounted sales and offered the income on unaccounted sales at Rs. 84,700/-. The AO did not accept the explanation of the assessee and treated the entire amount of Rs. 3,04,500/- deposited in the ICICI bank as unaccounted sale for the year under consideration and assessed as undisclosed income. The CIT(Appeals) was of the view that the AO was not justified in treating the entire deposits in ICICI bank as unaccounted income of the assessee. He has held that the entire undisclosed sales cannot be treated as profit of the assessee and, accordingly, directed the AO to treat 5% of the total deposit in the ICICI bank as unaccounted income or undisclosed income for the relevant assessment years. It is to be noted that once the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an addition of Rs. 30,40,477/- being the peak credit and treated the same as unexplained money. The CIT(Appeals) directed the AO to give credit for undisclosed income of Rs. 25,45,500/-already arrived at and added to the income of the assessee while making the addition on account of peak credit. Accordingly, the CIT(Appeals) had given the relief to the extent of Rs. 25,45,500/-and confirmed the addition to the extent of Rs. 4,94,977/-. As we have discussed in the foregoing paragraphs while deciding the issue involved for the assessment year 2005-06 when the Assessing Officer has accepted the amount recorded in the seized diary representing the unaccounted sales, then, the unaccounted income already offered by the assessee to the extent of Rs. 25,45,500/- is required to be adjusted against the peak credits. Thus, the same amount cannot be taxed twice once as offered by the assessee being profit on unaccounted sales and again being part of peak credit. In view of the above facts and circumstances of the case, we do not find any error or illegality in the order of CIT(Appeals) on this issue. IV. Assessment year 2008-09: 10. The grievance of the revenue is regarding the deletion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07-08, on account of income from unaccounted transactions and such income was available for the respondent for investment in purchase of stock." 12. During the course of search at the business premises of M/s K.R. Pearls, the stock-in-trade at Rs. 1,05,46,738/-was found whereas the stock in trade recorded in the books of account was Rs. 89,49,451/-only. The assessee was asked to explain the difference of stock-in-trade found at the time of search and recorded in the books of account. In his statement Shri Abhay Shah admitted the difference of Rs. 15,97,287/-as his unaccounted investment in stock-in-trade. Apart from the discrepancy as found in the stock-in-trade some loose sheets were also seized from the business premises during the search. These sheets contains details like rate, quantity, discount, total value, etc., relating to stock-in-trade. The assessee admitted that the details in the seized loose sheets are regarding the purchases made by him during the year 2007-08 as indicated in the purchases. The total value of purchases made as recorded in these loose sheet is Rs. 31,85,555/-. During the assessment proceedings the AO asked the assessee as to why the value of unaccou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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