GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 1885 - ITAT DELHI

2015 (10) TMI 1885 - ITAT DELHI - TMI - Unaccounted sale - undisclosed income as calculated by applying GP rate - Held that:- FAA was right in holding that the amount of ₹ 25,08,740 deserves to be treated as unaccounted receipt on account of sale on which GP rate of 29.01% was applied to work out undisclosed income of ₹ 7,27,534. Ld. CIT(A) also noted that the amount of shortage in stock of physical verification of ₹ 21,958 was also included in the said amount of undisclosed 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

CIT(A) allowed telescoping of the other investment in the fixed assets/capital and concluded that no further and separate addition is required to be made on this count since the assessee purchased this machine on 2.8.2006 in the fifth month of financial period, therefore, it can easily be inferred that sufficient amount of profit was earned by the assessee from unaccounted turnover to make investment in the aforesaid fixed asset viz. Plant and machinery, therefore, the CIT(A) was right in granti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

21 (LDH)/CIT (A) (C)/GGN/2008-09 for AY 2007-08. The grounds raised by the revenue read as under:- (i) Ld. CIT (A) has erred in taking only gross profit on unaccounted turnover of ₹ 25, 08,740/- without considering the fact that the assessee in order to make such turnover would require investment in stocks. Ld. CIT(A) should have made an addition of fixed % age of turnover as unaccounted investment in stock. (ii) Ld. CIT (A) erred in permitting telescopic view to the extent of ₹ 4,86 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rect in making the addition of ₹ 29,94,740 on the ground that entries in seized documents were unaccounted. Ld. DR vehemently contended that the CIT(A) has grossly erred in allowing relief to the assessee without considering the fact that the assessee in order to make such turnover would require investment in stocks. Ld. DR further submitted that the CIT(A) should have made addition of fixed percentaage of turnover as unaccounted investment in stock. Ld. DR strenuously contended that the C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

date of purchase of fixed assets i.e. machinery, sufficient amount of profit was earned from unaccounted turnover to make investment in the said fixed asset. Ld. DR lastly submitted that the impugned order may be set aside by restoring that of the AO. 3. Ld. Counsel of the assessee strongly supporting the appellate order of the CIT(A) submitted that the AO made addition without considering the fact that the assessee would require substantial investment in stock for making such alleged turnover a .....

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. Counsel strenuously pointed out that on taking a telescopic view, no further and separate addition was required to be made on account of alleged purchase of machine by the assessee during the relevant financial period, therefore, the view taken by the first appellate authority deserves to be upheld. 4. On careful consideration of above submissions and vigilant perusal of the relevant material, inter alia, assessment order and impugned order of the CIT(A), we note that the CIT(A) granted relie .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- spent towards purchase of plant and machinery and ₹ 21,958/- as difference in reconciliation of stock. A chart was also furnished to show which of the alleged unaccounted transactions were clearly recorded in the books of accounts. It was also put forth that the amount in any case could not be treated as income and that at the most it could be considered as sales on which GP rate could be applied on the transactions not reflected in the books viz. ₹ 5,85,585/-. Reliance was placed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ounted entries have been discussed at length by the Ld. AO before adding back the said amounts and after having decoded the entries. 6. I have carefully considered the submission of the assessee and the impugned assessment order. Several documents were found in the course of search, and as stated by the Ld. AO the entries were decoded to arrive at the correct figure of undisclosed sales. These notings were in the shape of rough pads. It is also undisputed that the Ld. AO had rejected the books o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed as unaccounted receipts on account of sale on which the GP rate of 29.01 % is applied to work out the undisclosed income. The same works out to ₹ 7,27,534/-. This amount also includes ₹ 21,958/- which is the shortage in stock on physical verification which has been treated by the AO as unaccounted sale of the assessee during the year. 6.1 As regards ₹ 4,86,000/- it is seen that the same is on account of investment in fixed assets. It is the case of the assessee that the mach .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

esult, the addition made by the Ld. AO of ₹ 29,94,740/- is restricted to ₹ 727,534. 5. In view of above, we observe that the assessee explained that the impugned addition of ₹ 29,94,740 included a sum of ₹ 4,86,000 spent towards plant and machinery/fixed asset and ₹ 21,958 as difference in reconciliation of stock and trade. The assessee clarified these facts by way of furnishing a chart before the authorities below and it was also submitted that at the most, the imp .....

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 contention of the assessee with regard to alleged unaccounted investment in plant and machinery is that the same could only have been expended out of undisclosed income as determined by the AO, therefore no separate addition can be made on this count. 7. On careful consideration of above noted facts and circumstances in the light of observations and conclusion of the CIT(A), we are of the considered opinion that the first appellate authority was right in holding that the amount of ₹ 25,0 .....

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