9911796707
Advanced Search 
TMI Blog2019 (10) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... e which includes additional income of Rs. 2,46,00,000/- on account of income earned from unaccounted sales represented by undisclosed assets. The assessment was completed u/s 144 read with 153A vide order dated 14.11.2013 assessing total income of Rs. 15,28,93,350/-. The matter was carried in appeal before the ld. CIT(A) and thereafter before the Tribunal where the addition of Rs. 61,19,120/- was finally sustained. 3. During the course of assessment proceedings, the AO also initiated the penalty u/s 271AAA in respect of undisclosed income of Rs. 2,46,00,000/- surrendered by assessee and disclosed in its return of income as well as on Rs. 5,30,97,994 towards addition made during the course of assessment proceedings. 4. During the penalty proceedings, a fresh show cause was issued to the assessee and after taking into consideration the submission of the assessee and order of the Tribunal in the quantum proceedings, the AO imposed penalty of Rs. 30,71,912/- u/s 271AAA on the amount surrendered by the assessee in the return of income amounting to Rs. 2,46,00,000 as well as the addition finally sustained by the Tribunal amounting to Rs. 61,19,120. 5. On appeal, the ld. CIT(A) deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account or other documents maintained in the normal course relating to such previous year; or (B) other while not been disclosed to the Chief Commissioner or Commissioner before the date of the search; or (ii) Any income of the specified previous year represented, either wholly or partly, by any entry in respect of any expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted;" 8. It was submitted by the ld AR that the additional income finally sustained by the Revenue does not come in the purview of undisclosed income as it is purely based on the estimation and it neither represented by undisclosed assets or entry in the books of account or documents. Further, it was submitted that levy of penalty u/s 271AAA is discretionary and not mandatory in nature. Further, reliance was placed on the Hon'ble Supreme Court decision in case of Hindustan Steels Ltd. vs. State of Orissa, 83 ITR 26 (SC) as well as the decision of Hon'ble Rajasthan High Court in case of Shiv Lal Tak vs. CIT [2001] 251 ITR 373 (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company failed to disclose such additional sales and additional profit in the return of income filed u/s 153A of the Act. Being thus satisfied that the assessee company has committed a default u/s 271AAA of the Act, penal proceedings u/s 271AAA of the Act are initiated separately for concealing particulars of income of Rs. 5,09,67,486/-" 11. Further, we refer to the findings of the ld. CIT(A) and the same reads as under:- "6.3 In these grounds, it is observed that the ld. CIT(A) has upheld the addition to the extent of Rs. 2,59,56,858/- by estimating the profit rate @ 24% on estimated sales of Rs. 26 crores by observing as under:- "After considering the past history of the assessee and gross profit of 15.30% in comparable cases cited by the A.R. of the assessee, I found that the gross profit rate of 26.21% seems to be on higher side in the business of the assessee. The consolidated sales worked out by the assessee after the correction comes to Rs. 25,06,61,673/- but the fact remains the accounts of Jadavji are incomplete and there may remain some more unaccounted sales. Therefore, I estimate the consolidates sales of the assessee at Rs. 26.00 crores. So far as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the materials available on record. It is noted from the records that the AO made the addition of Rs. 5,30,97,994/- (i.e.Rs. 5,09,67,486+Rs. 21,30,508 )estimating the gross profit @ 26.21% on sales of Rs. 26,96,46,926/- (sales as worked out by Special auditor. It is noted that in the given samples all the transactions were of trading goods of diamond jewellery while the assessee has sales of Kundan Meena Jewellery for substantial amount i.e. almost 50% of total sales. We would like to state that the samples which represented sales of diamond jewellery cannot be applied for sales of Kundan Meena jewellery. Margins in both these items varies and canot be applied to each other. To reach at a comparable and reasonable estimated, the average of past years could be the justified method. It is also notable to compare the trading results of the assessee for the previous years which are as under:- S. No. A.Y Turnover G.P G.P. Ratio 1 2006-07 3531618.00 512723.00 14.52% 2 2007-08 18562148.00 2509297.00 13.52% 3 2008-09 20591252.00 3047886.00 14.80% 4 2009-10 12824830.00 3356643.00 26.17% Weighted Average GP 55509848.00 9426549 16.98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as AO have not pointed out any defect in the calculation of gross turnover by the assessee on the basis of seized records. And on such turnover of Rs. 25,06,61,673 so computed by the assessee based on seized records, the Coordinate Bench has upheld the gross profit rate of Rs. 16.98%. We therefore find that it is not a case of mere estimation of gross profit rate on declared turnover of the assessee but the fact of the matter which is clearly emerging from the orders of the authorities below as well as decision of the Coordinate Bench is that such estimation of gross profit is on reported sales/turnover as well as the undisclosed sales/turn over which has not been disclosed by the assessee in its regular books of accounts which was surrendered on the basis of search carried out at the premises of the assessee. Therefore, to the extent of profit estimated on undisclosed sales/turn over which has been found in the course of search and which has not been disclosed/recorded in the books of accounts maintained in the normal course of business, it is clearly a case of undisclosed income as defined in explanation to section 271AAA. We therefore donot see any infirmity in the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
