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TMI Blog2016 (2) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of Rs. 2,28,726/-. The return of income was processed u/s.143(1) of the Act on 28.9.2007. 3. There was a survey conducted by the revenue u/s.133A of the Income Tax Act, 1961 (Act) in the business premises of the Assessee on 25.1.2008. Based on the material found in the course of survey, proceedings u/s.147 of the Act were initiated by issue of a notice u/s.148 of the Act on 27.11.2009. 4. In the course of survey the material found by the Revenue was that the Assessee was not recording some of the transaction of sales made by him during the previous year relevant to AY-06-07and 07-08 in the regular books of accounts maintained by the Assessee. As far as AY 06-07 is concerned, the sale transactions not recorded in the regular books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not recorded in the books of accounts of the Assessee. The AO found that the Gross profit declared by the Assessee on sales recorded in the books of accounts was 7.53%. However in the statement recorded at the time of Survey the Assessee had in answer to question no.2 stated that the Gross Profit in his business would vary between 15.5% and 53%. The AO therefore applied 17% Gross profit on unrecorded sales of Rs. 2,26,293/- and made an addition of Rs. 38,470/- to the total income of the Assessee. The AO passed the order u/s.143(3) r.w.s.148 of the Act on 30-12-2010. 7. The CIT in exercise of his powers u/s.263 of the Act, was of the view that the aforesaid order of the AO was erroneous and prejudicial to the interest of the revenue. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CIT Vs. Gabriel India Ltd. 203 ITR 108 (Bom.) for the above proposition. The Assessee also pointed out that since unrecorded sales are made throughout the year, unrecorded purchases were also made throughout the year. The profit margin on sale and the realization from sale would be sufficient source of funds out of which the Assessee would have made purchases and hence no separate addition of income on account of unrecorded purchases should be made. The Assessee placed reliance on the decision of the Hon'ble Gujarat High Court in the case of President Industries Ltd. 258 ITR 654 (Guj.) and the ITAT Delhi in the case of India Seed House Vs. ACIT (2001) 69 TTJ (Delhi) 241 for the proposition that only gross profit on unrecorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers u/s.263 of the Act by an order dated 23.3.2012. In the said order the CIT gave similar directions as was done in AY 2006-07. The said order was challenged by the Assessee before the ITAT in ITA No. 1245/Kol/12 and this Tribunal by its order dated 16.5.2013 was please to quash the order of the CIT u/s.263 of the Act. The said order of the Tribunal has however been reversed by the Hon'ble Calcutta High Court in G.A.No.3284 of 2013 dated 4.4.2014. The Assessee preferred SLP before the Hon'ble Supreme Court against the order of the Hon'ble Calcutta High Court and the Hon'ble Supreme Court in Civil Appeal No.3113 of 2015 by its judgment dated 23.3.2015. The Hon'ble Supreme Court set aside the order of the Hon'ble Calcutta High Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of all debit items in the profit and loss account, the tax audit report, the impounded documents, statement recorded during Survey and during assessment proceedings, books and accounts and other documents, bills, vouchers etc. 15. The CIT has exercised jurisdiction u/s.263 of the Act on the ground that the AO failed to make proper enquiry which he ought to have made before completing the assessment. There is a distinction between "lack of enquiry" and "inadequate enquiry". If there is an enquiry, even inadequate, that would not by itself give occasion to the CIT to pass order under s. 263, merely because he has a different opinion in the matter. Such a course of action is open only in cases of "lack of enquiry". Although apparently the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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