Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (6) TMI 291

cash of Gurgaon Branch was transferred to Karol Bagh Branch because of the closure of the showroom at Gurgaon on account of holiday - the explanation was not accepted by the A.O. because no entries to that effect have been made in the books of account - CIT-A deleted the addition - HELD THAT:- CIT(A) specifically noted that cash available as per the records seized by the Department shows availability of the cash in the books of account of assessee at ₹ 53,48,755/-. This fact has not been rebutted by the Revenue Department. Since assessee is keeping and maintaining several business entities at different places, therefore, entire cash available in the books of account of assessee of different entities should have been considered. The explanation of assessee could not be ignored that there was a transfer of cash from Gurgaon Branch to Karol Bagh Branch. Therefore, entirety of the facts and the fact that seized records itself shows availability of the cash with the assessee in the books of account clearly shows that Ld. CIT(A) on proper appreciation of facts and material on record, correctly deleted the addition - Decided against revenue Addition on account of under reporting of .....

X X X X X X X

Full Text of the Document

X X X X X X X

lar income earned during the financial year 2009-2010. His statement is reproduced in assessment order in which he has after confronting with the seized material, offered a sum of ₹ 3,18,62,953/- as additional income over and above the income under appeal and paid the taxes. The assessee, therefore, has not explained/ specified the manner in which the undisclosed income was derived and also has not produced any document supporting the manner in which the undisclosed income of ₹ 3,18,62,953/- was earned or has not substantiated the manner in which undisclosed income was derived. The A.O. made the additions in the assessment order which have been deleted by the Ld. CIT(A). In the background of these facts, the Revenue challenged the Order of the Ld. CIT(A) in deleting the addition. 4. Ground No.1 is general an need no adjudication. 5. On Ground No.2, Revenue challenged the Order of the Ld. CIT(A) in restricting the addition to ₹ 9,20,245/- made by the A.O. on account of undisclosed cash. The A.O. noted that during the course of survey u/s 133A of the Income Tax Act, 1961 by the Investigation Wing of the Income Tax Department at the business premises of Assessee-Comp .....

X X X X X X X

Full Text of the Document

X X X X X X X

of the search. Since on the date of search action, showroom at Gurgaon was closed on account of weekly holidays, therefore, for safety and security purposes, the excess cash was never left at the shop. Since the Bank of assessee is regulated from Karol Bagh place which is regular practice of the assessee that excess cash is always taken and transferred to Karol Bagh place. No inconsistency or defects have been pointed out in maintenance of the books of account. The assessee claimed that cash amounting to ₹ 53,48,755/- was reflected in the books of account of the assessee at the time of survey/search, while a further amount of Rs.l1,87,139/- was reflected in the accounts of a group company called M/s Diamond Hut India Pvt. Ltd. Relevant cash books belonging to the assessee were seized by the Department during the search itself Therefore, the addition is unjustified. 7. The Ld. CIT(A) noted that it is well-known that trade in bullion and jewellery generates large cash sales. It is also not disputed that the cash available as per the records seized, by the Department itself, was ₹ 53.48.755/-. Therefore, it is not appropriate to treat the entire cash as unaccounted simply .....

X X X X X X X

Full Text of the Document

X X X X X X X

of Revenue has no merit and the same is accordingly dismissed. 10. On Ground Nos.3 to 5, Revenue challenged the Order of the Ld. CIT(A) in deleting the addition of ₹ 2,40,49,700/- made by A.O. on account of under reporting of profit. 11. During the course of assessment proceedings it was noticed that the assessee had shown net profit of ₹ 3,42,80,787/- during the year under consideration consideration against the total sales turnover of ₹ 267.34 crores. If the amount which were disclosed by the assessee during the course of search operation i.e., ₹ 3,18,62,953/- is reduced from the profit reported by the assessee for the year under consideration, net profit left is only ₹ 24,17,834/- (₹ 3,42,80,787 - ₹ 3,18,62,953). Hence, the net profit ratio for assessment year under appeal excluding the surrender amount is just 0.09%. The A.O. noted that in preceding assessment year 2009-2010 the net profit ratio is 0.99%. In assessment year 2008-09 it was 2.5%, which indicates that after disclosing the unaccounted income the assessee has claimed expenses by inflating them so as to reduce the tax liability. The A.O, therefore, applied net profit ratio of .....

X X X X X X X

Full Text of the Document

X X X X X X X

%, but, the circumstances noted above clearly show that trading result may also be in loss. But, in the present case, the result of the assessee is in profit and not in loss. Therefore, estimated addition made by the A.O. cannot be sustained. The Ld. CIT(A), accordingly, set aside the Order of the A.O. and deleted the entire addition. 14. The Ld. D.R. relied upon the Order of the A.O. 15. After considering the submissions of the Ld. D.R. in the light of findings of fact recorded by the Ld. CIT(A), we do not find any merit in these grounds of appeals of the Revenue. The assessee has surrendered ₹ 3.18 crores over and above the normal income during the course of search and survey. The assessee also paid the taxes thereon. The Ld. CIT(A) directed it to be considered as income from other sources. The A.O. without pointing-out any specific defects in the maintenance of the books of account of assessee, noted that if the surrendered amount is reduced from the income declared by assessee, there will be a low net profit as compared to net profit declared in the preceding year. Since the Ld. CIT(A) considered the surrendered amount under different Head of Income i.e., Income from othe .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||