TMI Blog2018 (12) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... ein it is held that in such circumstances Assessing Officer cannot take resort to Section 69 of the Act and only net profit rate has to be applied which has been correctly done by the CIT(A). As regards to the rejection of books of accounts and estimation of GP rate is concerned, the Ld. AR submitted that complete books of accounts were already available with the Assessing Officer in the soft copy as the same were seized in the form of two CDs as per Annexure-N to the Panchnama. From the records it appears that complete books of accounts were produced before the Assessing Officer in 143(3) assessment wherein the GP rate as shown by the assessee was accepted. Thus, we are not inclined to interfere with the findings of the CIT(A). - Decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. 3. The Assessee company is engaged in the business of manufacturing of packing material and trading of plastic granules. Original return of income declaring income of ₹ 19,12,110/- was filed on 30.10.2007 and the same was assessed under section 143(3) vide order dated 18.07.2008. Subsequently, search and seizure action under section 132(1) was carried out in Kurele group on 19.01.2009 and assessee s case was centralized from Kanpur to Delhi with ACIT, Central Circle-23, New Delhi and notice under section 153A was issued. In response return declaring the already assessed income of ₹ 17,12,110/- (i.e. after reducing ₹ 2 lakhs on account of apparent mistake in the claim of depreciation) was filed on 26.10.2010. Final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 143(3) on 18.07.2008. During the financial year 2006-07, there has been a search by D.G.C.E.I, which led to detection of evidence of unaccounted sales of 41172.80 kgs. of laminated pouches. In addition unaccounted plastic granules (raw material) of 6375 kgs. were also found. Statement of Jang Bahadur Singh Chandel, an employee and Shri Pramod Kumar Mishra, Prop. M/s Alok Road Line was also recorded which confirmed unaccounted sales. The statement of Sh Sanjay Kumar Kurele, one of the main persons of assessee group, was also recorded, who admitted unaccounted sales. There was also a search u/s 132 of the Income Tax Act, 1961 on 19.01.2009, consequent to which assessment orders u/s 143(3)/153A was passed. The CIT(A) observed that seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. 6. The Ld. AR submitted that the addition of ₹ 49,40,736 was made by the Assessing Officer by holding it to be unaccounted stock. However, looking to the facts CIT(A) found it to be only unaccounted turnover. It is trite law that in case of unaccounted turnover, only addition of profit embedded therein can be made as held by the Hon ble MP High Court in the case of CIT vs. Balchand Ajit Kumar [2003] 263 ITR 610 (MP) and Hon ble Gujarat High Court in the case of CIT vs. President Industries [2002] 258 ITR 654 (Guj). Further, it has been held by the Hon ble Calcutta High Court in the case of CIT vs. S.M. Omer (1993) 201 ITR 608 (Cal) that in such circumstances AO cannot take resort to Section 69 of the IT Act, 1961, and only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken into account the unaccounted turnover. The decision in case of Balchand Ajit Kumar (supra) and President Industries (supra) are applicable in the present case and thus in case of unaccounted turnover, only addition of profit embedded therein can be made. The Ld. AR also relied upon the case of S. M. Omer (supra) wherein it is held that in such circumstances Assessing Officer cannot take resort to Section 69 of the Act and only net profit rate has to be applied which has been correctly done by the CIT(A). As regards to the rejection of books of accounts and estimation of GP rate is concerned, the Ld. AR submitted that complete books of accounts were already available with the Assessing Officer in the soft copy as the same were seized ..... X X X X Extracts X X X X X X X X Extracts X X X X
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