TMI Blog2015 (12) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld.CIT(A) that the AO has not made any enquiry from the buyers to verify the actual sale price. In the absence of the same, in our considered view, the AO was not justified in rejecting the books of account and making the addition. Therefore, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld - Decided against revenue - ITA No. 1848/Ahd/2012 - - - Dated:- 30-11-2015 - G. D. Agarwal, Vice President (AZ) And Kul Bharat, JM For the Appellant : Shri Rakesh Jha, Sr. DR For the Respondent : Shri R N Vepari, AR ORDER Per Kul Bharat, Judicial Member This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-IV, Surat ['CIT(A)' in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 50,00,000/- as unaccounted income of the relevant financial year under consideration. The case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Act was framed vide order dated 30/12/2010. During the course of assessment proceedings, the AO observed certain defects in the books of account and proceeded to reject the book results. While framing the assessment, the AO made addition on account of suppression of sales of ₹ 23,54,825/- as per Annexure BF-15. The AO further made addition of ₹ 6,47,300/- on account of suppression of sales as per Annexure BF-4. The assessee being aggrieved by the assessment order, preferred an appeal before the ld.CIT(A), who after considering the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sofa, there is mention of ₹ 2,55,000/-. On page 37, sales made to Shri Bharat Mevada of T T at ₹ 29,500/-. Annexure B-4 containing telephone numbers and business cards and they cannot be interpreted as sales as the AO contends. He submitted that Annexure B- 15 is a catalogue showing various items sold but in very few items, the selling price is mentioned. The ld.counsel for the assessee submitted that the AO has worked out selling price of relax chair on page-10 at ₹ 60,000/- when the purchase price was ₹ 7,500/-. Similarly, on page- 12, he refers to arm chair and bed mentioned at ₹ 9,000/-, ₹ 24,000/- ₹ 18,500/- and there is no mention about ₹ 9,000/-. On the basis of the above, the AO wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the price recorded in the books and the fact that the sale bill copy remaining with the assessee was unsigned. It is seen that during the course of assessment proceedings the books were produced for verification. The sale bill copies were with the A.O. From the sample copy of the sale bill, it is seen that it bears the name of the buyer. The assessee on the other hand has argued that the prices mentioned in the catalogue are only for making a quote to the customer and the actual sale price depends on several factors including discounts, number of pieces and material. Under such circumstances, the material with the A.O. could at best raise doubts about the books but cannot be said to be conclusive evidence of defects in the books. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsportation and octroi while determining the profitability. These expenses, based on the figures hi the P L account, work out to 27% of the purchases and therefore with the same sample, catalogue prices and discount rate as adopted by the A.O., the profitability works out to 127%. If this is applied to the 'cost of goods consumed (as adopted by the A.O. at . 64,31,0897-), the gross profit would be approx. . 82 lakhs which is less than the aggregate of gross profit shown in the books and additional income offered during survey (.48,34,563/- plus .50,00,000/-.). Therefore, there was no reason for making any addition for lower profits/suppression of sales. Hence, for this reason also the addition of .23,24,825/- is required to be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the actual purchase and therefore the explanation of the appellant that the visiting cards recorded such price and the actual sales was recorded in the books appears plausible. In any case, before making the addition, the A.O. should have confirmed the sales from the persons whose visiting cards were found. No such inquiries were made by the A.O. Suspicion, however strong, cannot be the basis for addition. Even otherwise, the assessee had voluntarily offered addition income of .50 lakhs during the course of survey and has offered this amount separately in the return also. In my opinion, this amount is sufficient to cover the amount of sales suppression detected by the A.O. on account of recordings on the visiting cards in addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
