TMI Blog2017 (1) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax liability from the record, we also found that if the purchases of ₹ 1.78 crores in the pre-survey period is recorded as such then the gross profit ratio for the pre-survey and post-survey becomes comparable which further gives credence to the fact that the purchases of ₹ 1.78 crores though recorded in post-survey period were unrecorded on the date of survey. With regard to addition of ₹ 86.82 lacs made by AO by estimating G.P. at 4%, we found that assessee by their letter dated 10th March 2014 filed before AO had furnished the details of sales post survey and also furnished columnar profit and loss account for the pre and post-survey period. The Assessing Officer observed that there is a difference between the sales and other income shown per columnar profit and loss account (Rs 5,72,78,650) and that per the details of sales post survey and required the appellants to reconcile the same. We found that the assessee have reconciled the difference by their letter dated 25th March, 2014. Thus there is no undisclosed sales and hence, the addition on account of gross profit on such undisclosed sales is not tenable and requires to be deleted. Coming to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-11-2016 - SHRI R.C. SHARMA, AM AND SHRI PAWAN SINGH, JM For The Assessee : Shri Rajiv Khandelwal, Shri Neeklanth Khandelwal For The Revenue : Shri K. Mohandas ORDER PER R.C.SHARMA (A.M) : This is an appeal filed by the assessee against the order of CIT(A)-Mumbai, dated 01-02-2016, for the assessment year 2011-2012, on the grounds mentioned herein below :- 1. The Commissioner of Income-tax (Appeals)-33, (hereinafter referred to as the CIT(A) erred in upholding the action of the Additional Commissioner of Income-tax-18(1), Mumbai (hereinafter referred to as the Assessing Officer) in making a disallowance of a sum of ₹ 1,78,00,000/- on account of bogus purchases. The appellants contend that on the facts and in the circumstances of the case and in law, the ClT{A} ought not to have upheld the impugned disallowance in as much as there are no bogus purchases made by the appellants and the Assessing Officer has not brought any material on record in respect of the same and hence, the impugned disallowance needs to be deleted. 2. The ClT(A) erred in upholding the addition of ₹ 86,82,488/- on account of suppressed profit on unexplained s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisional profit and loss account on the date of survey is ₹ 1.5 crores against which the assessee have paid ₹ 15 lacs only; and thereby a shortfall of ₹ 1.35 crores which the appellants have agreed to pay before 15th March, 2011, and against which they have given 3 post-dated cheques to the survey party. This is thus, simply a case of non-payment of full advance tax liability that is brought out by the survey party and not of unearthing of concealed income as depicted by the Assessing Officer. The Assessing Officer during the course of assessment proceedings has observed that the net profit as per the provisional profit and loss account is ₹ 4.99 crores and 37 days still remaining for the year to end and the profit should have been higher than the aforesaid profit but, per the return of income filed by the appellants the total income is ₹ 3.95 crores. Accordingly, addition was made on account of purchases. 3. We found that sales and other income as per provisional trading account is ₹ 4.17 crores but all corresponding purchases are not included which is estimated at ₹ 1.78 crores. Furthermore, closing stock valued at ₹ 4.26 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to AO s allegation regarding rates charged by Creative Chain Stores, which is covered u/s.40(2)(b), we found that assessee had exported the goods purchased from Creative Chain Stores at a gross profit ranging from 5 to 7 percent and hence, there can be no question of accommodation entry and reduction of tax liability from the record, we also found that if the purchases of ₹ 1.78 crores in the pre-survey period is recorded as such then the gross profit ratio for the pre-survey and post-survey becomes comparable which further gives credence to the fact that the purchases of ₹ 1.78 crores though recorded in post-survey period were unrecorded on the date of survey. 6. With regard to addition of ₹ 86.82 lacs made by AO by estimating G.P. at 4%, we found that assessee by their letter dated 10th March 2014 filed before AO had furnished the details of sales post survey and also furnished columnar profit and loss account for the pre and post-survey period. The Assessing Officer observed that there is a difference between the sales and other income shown per columnar profit and loss account (Rs 5,72,78,650) and that per the details of sales post survey and requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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