TMI Blog2015 (5) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... equivalent to 12% of undisclosed turnover. - I.T.A. No. 2410/Del/2013 - - - Dated:- 22-5-2015 - SHRI G. C. GUPTA, HON BLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER Appellant by: Shri Vinod Goel, Adv Respondent by: Shri Gairav Dudeja, Sr. DR ORDER PER T.S. KAPOOR, AM: This is an appeal field by assessee against the order of Ld. CIT(A) dated 07.02.2013. The assessee has taken only one effective ground of appeal in which he has raised his grievance regarding confirmation of addition of ₹ 47,93,474/- by Ld. CIT(A), which A.O. had made on account of addition of unrecorded sales detected during assessment proceedings. 2. The brief facts of the case as noted in assessment order are that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form 26AS. Aggrieved, the assessee filed appeal before Ld. CIT(A) and reiterated his submissions made before A.O. However, Ld. CIT(A) did not agree with the contention of assessee and upheld the addition as made by A.O. Aggrieved, the assessee is in appeal before us. 3. At the outset, Ld. A.R. submitted that during proceedings before Ld. CIT(A), Ld. CIT(A) has called for a remand report from A.O. which was placed at paper book pages B-1 and B-2. Inviting our attention to para 4 of the report of A.O., Ld. A.R. submitted that the A.O. himself in the remand report had recommended that gross receipt of assessee should be taxed @ 8% whereas Ld. CIT(A) did not look into this aspect of A.O. s repot and confirmed the addition. Ld. A.R. submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as placed at paper book pages B1 and B-2 and submitted that in earlier part of remand report, the A.O. had recommended the addition of ₹ 37,07,217/- on the basis of hidden investment in the business. He argued that Ld. A.R. did not invite the attention to this aspect. 5. Ld. D.R. placed his reliance on the following case laws for the proposition that entire sale needs to be added:- CIT Vs Calcutta Agency Ltd. 19 ITR 191 (S.C.) . CIT Vs Chandravilas Hotel 164 ITR 102 (Guj.) CIT Vs Modi Store Ltd. 203 Taxman 123 (Del.) 5.1 Ld. D.R. further placed his reliance on the decision of Delhi Bench of the Tribunal in the case of Shaktibhog Foods Pvt .Ltd. Vs ACIT in I.T.A. No. 2777 to 2778/Del/2010 and also relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in expenses, made the addition of entire turnover whereas the fact remains that if there was concealed turnover, there must have been some concealed expenses also which must have been incurred and the A.O. should have considered the claim of expenses also. Though the assessee did not furnish vouchers and bills for the expense yet the A.O. should have taken guidance from the provisions of Section 44AD which provides determination of net profits on the basis of 8% of gross receipt in the case of small traders. From the figures of turnover of assessee, we find that assessee also falls in the category of small traders and his undisclosed income should have been calculated on the basis of certain percentage on undisclosed turnover. The Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to about the suppression of investment in acquiring the goods which have been found subject of undisclosed sales. 6.2 The above case law relied upon by Ld. A.R. squarely covers the facts and circumstances of the case, therefore, following the Hon'ble Gujarat High Court we hold that entire turnover cannot be added to the income of assessee and profits embedded in the turnover can only be taxed. The assessee did not produce vouchers / bills to support the increase in expenditure in his revised P L account. Therefore, instead of 8% of turnover to be included as profits on undisclosed turnover, we hold that an amount equivalent to 12% of turnover be included in the income of assessee. In view of the above, the A.O. is directed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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