Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (7) TMI 289 - ITAT BANGALORE

2015 (7) TMI 289 - ITAT BANGALORE - TMI - Differences in accounting the purchases and sales in the books of account - Held that:- On an appreciation of the material on record, we find it difficult to accept the contention of the assessee that the audited books of account have to be disregarded and the re-cast accounts are to be accepted. It is the finding emanating from the survey on 9.3.2007, that there were unaccounted purchases and sales made in the period June, 2006 to August, 2006 which has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the unaccounted purchases and sales - AO determined the addition at ₹ 25,64,032 as the difference between the unaccounted sales and purchases - CIT (Appeals) had taken the profit element on the unaccounted sales at ₹ 1,69,281 (i.e. at 1% of unaccounted sales of ₹ 1,69,28,140) and considered the balance amount of the difference as unexplained investment and adjusted the same in the closing stock - Held that:- In our view, this approach of the learned CIT (Appeals) cannot be fa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Shri N.V. Vasudevan and Shri Jason P. Boaz, JJ. For the Petitioner : Shri K.Y. Ningoji Rao, C.A. For the Respondent : Dr.P.K. Srihari, Addl. CIT (D.R.) ORDER Per Shri Jason P. Boaz, A.M. : This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-III, Bangalore dt.30.12.2013 for Assessment Year 2009-10. 2. The facts of the case, briefly, are as under :- 2.1 The assessee is a HUF trading in coffee seeds. For Assessment Year 2007-08, it filed a return of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 26,96,000, in view of an addition of ₹ 25,64,032 towards suppressed profits. 2.2 In the course of assessment proceedings, the Assessing Officer verified the books of account vis-à-vis the books and documents impounded during survey and noticed discrepancies in both the purchases and sales reported in the books of account. As per the Assessing Officer, there were differences in purchases and sales for the months of July, August and September, 2006 between the regular books of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

contention was that the discrepancies were only due to wrong entries made by his semi-skilled employees, who mixed up the transactions and inter-changed the entries between the Karta s individual business and that of the assessee's HUF s business. The assessee also mentioned about certain sales made directly to the principal buyers, etc. and submitted re-cast books of account, thereby attempting to justify the discrepancies in the books of account relating to both purchases and sales. The As .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Assessing Officer made an addition of the difference between the unaccounted sales and unaccounted purchases amounting to ₹ 25,64,032 as the suppressed profit of the assessee and computed the total income of the assessee accordingly. 3. Aggrieved by the order of assessment for Assessment Year 2007-08 dt.31.12.2009, the assessee preferred an appeal before the CIT (Appeals), Mysore reiterating the submissions put forth before the Assessing Officer. The assessee also filed a re-cast state .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

joinder to the remand report of the Assessing Officer, the learned CIT (Appeals) came to the conclusion that the actual sales and purchase figures are culled out by the Assessing Officer from the registers/books/documents impounded in the course of survey, which reflect the true and correct transactions done by the assessee and therefore the addition was justified. The learned CIT (Appeals) thus by order dt.29.11.2011 confirmed the addition of ₹ 25,64,032 made by the Assessing Officer and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n on difference between the purchases and sales. Both the authorities below seem to have overlooked the fact that the sales also included the gross profit and that the same will have to be excluded from the sales for arriving at the net taxable income. Neither the AO nor the CIT(Appeals) have really applied their mind to the above legal position. In view of the same and in the interest of justice, we deem it fit and proper to remand the issue to the file of the CIT(Appeals) to verify the stateme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

's appeal vide the impugned order dt.27.6.2013. 6. Aggrieved by the order of the CIT (Appeals), Mysore dt.27.6.2013 for Assessment Year 2007-08, the assessee is in appeal before this Tribunal. Along with the appeal, the assessee has filed a petition for condonation of delay in filing of this appeal. 7. Order on petition for condonation of delay in filing this appeal for Assessment Year 2007-08. 7.1 In the case on hand, the assessee filed this appeal against the order of the CIT (Appeals), My .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d of the appeal so restored, by his order dt.27.6.2013 in ITA No.80/CIT(A)/Mys/12-13. 5. However the aforesaid appellate order dt.27.6.2013 was not received by the appellant and as such the appellant by his application dt.3.2.2014 requested the CIT (Appeals), Mysore to furnish him a copy of his said appellate order dt.27.6.2013. 6. The CIT (Appeals), Mysore by his letter dt.3.3.2014 has furnished the copies of the aforesaid appellate order dt.27.6.2013 in ITA No.80/CIT(A)/Mys/12-13 together with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r dt.3.3.2014 has said that the aforesaid appellate order is served on the appellant on 9.10.2013 and as such the time limit for filing appeal before the ITAT is barred. 10. In case the accompanying appeal is to be considered as belated, in view of the aforesaid facts and circumstances, the said appeal could not have been filed by the appellant within the time specified under Section 253(3) of the IT Act as the said order was not received on 27.6.2013 and as such the delay, if any, so caused is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

thorised Representative for the petitioner and the learned Departmental Representative for Revenue in the matter of condonation of delay and perused and carefully considered the material on record. According to the learned CIT (Appeals), the impugned appellate order was served on the assessee on 9.10.2013. In these circumstances, the petitioner s filing of the appeal on 11.3.2014 would render the same having been filed belatedly by approx. 93 days. Per contra, as per the petitioner s submissions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unds :- 1. The impugned order of assessment is liable to set aside in so far as it is incorrect, improper, irregular, opposed to facts and circumstances of the case and opposed to the law. 2. That the learned CIT (Appeals) erred in upholding the addition of ₹ 25,64,032 made by the Assessing Officer, even though the increase in the gross profit worked out by him in his impugned order is only ₹ 1,69,298 and as such the impugned addition is liable to set aside. 3. That the learned CIT ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ner opposed to law and as such the impugned addition is liable to set aside. 5. That the impugned addition having been made out of mere suspicion, surmise and conjecture with complete disregard to the facts of the case are liable to set aside. 6. That the impugned levy of interest of ₹ 2,85,022 under Section 234B is liable to set aside in so far as the appellant is not liable there for. 7. That the impugned levy of interest of ₹ 261 under Section 234C is liable to set aside in so far .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the case of Anjum H Ghaswala (252 ITR 1) and we, therefore, uphold the action of the Assessing Officer in charging the said interest. The Assessing Officer is, however, directed to recompute the interest chargeable u/s. 234B and 234C of the Act, if any, while giving effect to this order. 11.1 Grounds at S.Nos. 2 to 4 relate to the grievance of the assessee against the impugned order of the learned CIT (Appeals) in confirming the addition of ₹ 25,64,832 made on account of differences in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ended that since the learned CIT (Appeals) has determined the gross profit at ₹ 22,67,376, the addition that can be made is the difference between ₹ 22,67,376 and ₹ 20,98,078 i.e. ₹ 1,68,298 only. 11.3 In the appellate proceedings pursuant to the remand by the order of the Tribunal in its order in ITA No.230/Bang/2012 dt.26.12.2012 (supra), the learned CIT (Appeals) after considering the rival submissions made in respect of the re-cast accounts, dismissed the assessee' .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2,61,544 23,17,94,947 3.2 From the above, after verifying the details as per the directions of Hon'ble ITAT, I find that the net effect is the same since, the gross profit element goes into sales and omitted purchase are also taken into account and the gross profit accordingly goes to increase. Hence I find no infirmity in the order of the Assessing Officer and accordingly the appeal of the appellant stands dismissed. 11.4 The learned Departmental Representative strongly supported the findin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unaccounted purchases and sales for the three month period. June to August, 2006. The Assessing Officer found that these purchases and sales were not reflected in the audited books of accounts submitted by the assessee. The assessee gave explanations for these unaccounted sales and purchases which were rejected by the Assessing Officer as these claims were not supported by evidence. The reasons for rejection of the assessee's contentions are elaborated in the order of assessment, which need .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nts is substantially different from the closing stock in the audited accounts; which has not been properly explained by the assessee. 11.5.2 We find that the contentions of the assessee at various stages of assessment and appellate proceedings have been inconsistent. In the submissions made before the Assessing Officer vide letter dt.30.12.2009, the assessee contended that the differences in purchases and sales were due to wrong entries made by its employees who had interchanged the entries betw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unts should be disregarded and the results as per the re-cast books of account have to be accepted. 11.5.3 The Assessing Officer did not agree with the contentions of the assessee. He considered the unaccounted purchases and sales as transactions outside the books of account and considered the differences between the two as suppressed profits. The learned CIT (Appeals) in the impugned order dt.27.4.2013, passed pursuant to the remand by the Tribunal, has considered 1% of the unaccounted sales as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not been controverted by the assessee. Whatever may be the reasons for the unaccounted purchase and sales; the fact that there were such purchases and sales which were not reflected in the audited books of account has been fairly accepted by the assessee. We, therefore, agree with the action of the Assessing Officer in treating the unaccounted purchases and unaccounted sales as being outside the audited books of account. 11.5.5 The issue before us is how to assess the income from out of the unac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version