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2016 (10) TMI 88 - ITAT MUMBAI

2016 (10) TMI 88 - ITAT MUMBAI - TM - Addition on account of stock difference declared during the course of survey - Held that:- In absence of any specific reason for fall in gross profit specifically in view of fact that finding of survey was that stock in business of assessee was found to be understated in books. Accordingly, CIT(A) considered that gross profit should be taken at the same rate as it was found on the date of survey i.e. @3.92%. When the same was put as was seen in the chart the .....

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- was rightly sustained out of addition made by Assessing Officer at ₹ 70lacs. This reasoned finding of CIT(A) needs no interference from our side. - Disallwoance of renovation expenses - Held that:- Since assessee has already offered an additional amount of ₹ 63,84,565/-, which after considering the gap of ₹ 15,58,139/- on account of difference in gross profit and ₹ 409/- on account of cash was enough (Rs.48,26,017/- to cover amount of ₹ 11 lakhs of renovation .....

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ct of purchases and sales as well. Assessee has submitted that the survey party found cash on hand ₹ 4,25,272/-, whereas cash on hand as per books of accounts was ₹ 4,24,862/- which has wrongly been worked out by survey part at ₹ 24,863/-. This resulted into a difference of ₹ 4 lacs which was added in the income of assessee. As books of accounts were audited and this balance was reflected, same could not have been ignored. Since, entries in the books of accounts had not b .....

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no interference from our side - Additional income of assessee - disclosure made during the course of survey - Held that:- The voluntary addition of ₹ 63lacs to the profit of ₹ 51lacs, which was made to cover the shortfall to declare income of ₹ 1.15 Crores, was more than enough to take care of disclosure of unexplained renovation expenditure. No separate addition needed to the income declared by assessee. Assessing officer failed to appreciate these facts and made addition .....

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regarding the fact what assessee has returned. In fact, it was the case that assessee had returned higher income than her actual income. In view of above, assessee’s income was enhanced due to addition sustained for ₹ 15,58,139/- on account of gross profit and ₹ 409/- on account of difference in cash the income from business only stood at ₹ 78,96,427/- which was more than assessee’s claim of ₹ 62lacs. Along with this, assessee was having capital gain. As discussed above, .....

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ng survey action. - Appeal of revenue dismissed. - ITA. No. 3337/Mum/2011 - Dated:- 23-8-2016 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For The Appellant : Shri Chandra Vijay, D.R. For The Respondent : Shri Paras S. Savla, A.R. ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-33, Mumbai, dated 31.01.2011 for A.Y. 2007-08 on following grounds: 1. On the fact .....

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ey. 3. On the facts and circumstance of the case and in law, the CIT(A) erred in deleting the addition of ₹ 4,00,000/- made by the Assessing Officer on account of excess cash found during the course of survey which was not declared in the return of income filed by the assessee pursuant to the survey action. 4. On the facts and circumstance of the case and in law, the CIT(A) erred in holding that the additional income of the assessee, should be taken at ₹ 63,84,565/- as declared by th .....

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Officer made addition of ₹ 70lacs on account of difference in physical stock which did not find place in return of income. Assessing Officer made addition in question. 3.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) granted relief to assessee. 3.2 Same has been opposed on behalf of Revenue inter alia submitted that CIT(A) erred in restricting the addition of ₹ 70,00,000/- .....

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tock in business of assessee was found to be understated in books. Accordingly, CIT(A) considered that gross profit should be taken at the same rate as it was found on the date of survey i.e. @3.92%. When the same was put as was seen in the chart the difference of ₹ 15,58,139/- was found evident. It means assessee has understated closing stock as on 31.03.2007 by this amount i.e. ₹ 15,58,139/-. However, assessee has already carried forward this value of stock as reflected on 31.03.20 .....

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s. Assessee has filed return wherein the computation of income was reflected as under: Since assessee has already offered an additional amount of ₹ 63,84,565/-, which after considering the gap of ₹ 15,58,139/- on account of difference in gross profit and ₹ 409/- on account of cash was enough (Rs.48,26,017/- to cover amount of ₹ 11 lakhs of renovation expenses as still balance ₹ 37,26,017/- was left with). Same was deleted. This reasoned finding of CIT(A) needs no in .....

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ank on 06.01.2007 of ₹ 2 lacs and ₹ 50,000/- and the balance as on 20.02.2007 was ₹ 4,24,862/-. CIT(A) observed that assessee s books of accounts were incomplete and not written from January 2007 onwards as found by the survey team in respect of purchases and sales as well. Assessee has submitted that the survey party found cash on hand ₹ 4,25,272/-, whereas cash on hand as per books of accounts was ₹ 4,24,862/- which has wrongly been worked out by survey part at &# .....

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s to ₹ 409/- which being an negligible sum was rightly avoided by CIT(A). However, same was taken as unaccounted cash and addition to this extent was sustained. Accordingly, CIT(A) gave partial relief to assessee. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same. 6. Next issue is with regard to additional income of assessee. The total disclosure of ₹ 85 Lakhs made during the course of survey was made including ₹ 11 lacs. Assessee has earne .....

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vey was almost equal to the cash on hand as per books of account. Assessee should have made a balance disclosure of ₹ 11 lacs only on account of unexplained renovation expenditure in the return of income by adding the same to the profit of ₹ 51 lacs. However to keep the promise, assessee has shown business income of Rs. l.l5 Crores as against the real income of ₹ 62 lacs. The voluntary addition of ₹ 63lacs to the profit of ₹ 51lacs, which was made to cover the short .....

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