TMI Blog2021 (4) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, we restore the matter back to the file of Ld. Assessing Officer for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee. Addition on account of alleged suppressed its pass income and treated as undisclosed income - HELD THAT:- The accounts were reconciled only after the event was over and the 'pass income' was collected from the agent and pass selling centers. The difference in the figures of pass income is due to the fact that both the Profit and Loss accounts were prepared on different time periods and the correct figures were included after the reconciliation. However, ld DR for the Revenue reiterated the stand taken by the assessing officer. We note that AO has taken two different figure pertaining to 'pass income' from the Profit Loss account as on 31.03.2007 and as on 31.03.2008. The figures of December 2007 were provisional figures where the net profit of ₹ 1,01,908/- has been shown while in the Profit Loss account for 31.03.2008 the net loss of ₹ 48,68,592/- has been shown. The period mentioned as 01.04.2007 to 31.03.2008 is by default settings of the accounting sof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. 2. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in making addition of Rs. 67,53,500/- on account of fresh capital introduced in firm treated as alleged unexplained cash credit u/s.68 of the Act. 3. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in making addition of Rs. 34,50,000/- on account of alleged unsecured loans treated as alleged unexplained cash credit u/s.68 of the I.T. Act, 1961. 4. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in making addition of ₹ 49,70,500/- on account of alleged suppressed its 'pass income' treated as undisclosed income. 5. It is therefore prayed that the above addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, as under: Sr. No. Name of the person Amount 1 M/s. Govind Silk Mills ₹ 10,00,000/- 2 Shri Hiren Kapadia Rs. 5,00,000/- 3 Smt. Usha P. Patel Rs. 19,50,000/- Total ₹ 34,50,000/- The assessee was requested to prove identity of the depositors, genuineness of the transaction and creditworthiness of the said depositors. But the assessee failed to furnish the evidence to prove the identity of the depositors, genuineness of the transaction and creditworthiness of the depositors. In view of the above, the amount of ₹ 34,50,000/- was added to the total income of the assessee, being the unexplained cash credit u/s.68 of the I.T. Act. 7. On appeal, ld CIT(A) confirmed the action of the assessing officer. Aggrieved, the assessee is in appeal before us. 8. We have heard both the parties and carefully gone t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /CIT(A), as the situation was beyond control. Considering the above facts, we note that because of these criminal events the assessee did not get opportunity to submit documents and evidences during the assessment stage. We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, in the interest of justice, we restore the matter back to the file of Ld. Assessing Officer for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. Assessing officer to adjudicate the issue afresh on merits. For statistical purposes, the ground nos. 2 and 3 of the assessee are treated as allowed. 11. Now, we shall take Ground No.4 raised by the assessee which relates to addition of ₹ 49,70,500/- on account of alleged suppressed its pass income and treated as undisclosed income. 12. Brief facts qua the issue are that during the assessment proceedings, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'pass income' was collected from the agent and pass selling centers. The difference in the figures of pass income is due to the fact that both the Profit and Loss accounts were prepared on different time periods and the correct figures were included after the reconciliation. However, ld DR for the Revenue reiterated the stand taken by the assessing officer. We note that AO has taken two different figure pertaining to 'pass income' from the Profit Loss account as on 31.03.2007 and as on 31.03.2008. The figures of December 2007 were provisional figures where the net profit of ₹ 1,01,908/- has been shown while in the Profit Loss account for 31.03.2008 the net loss of ₹ 48,68,592/- has been shown. The appellant submitted that the Profit Loss account for the period 01.04.2007 to 31.03.2008 was actually the provisional Profit Loss account which was produced before the ITO Investigation, Surat during course of the function as the survey was conducted when the event was in progress. The period mentioned as 01.04.2007 to 31.03.2008 is by default settings of the accounting software. The pass income' has been shown at ₹ 39,79,500/- in the Prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in rejecting the application under section 256(1). It cannot be a matter of an argument that the amount of sales by itself cannot represent the income of the assessee who has not disclosed the sales. The sales only represent the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the realisation of excess over the cost incurred that only forms part of the profit included in the consideration of sales. Therefore, unless there is a finding to the effect that investment by way of incurring cost in acquiring goods which have been sold has been made by the assessee and that has also not been disclosed, the question, whether entire sum of undisclosed sale proceeds can be treated as income of the relevant assessment year answers by itself in the negative. The record goes to show that there is no finding nor any material has been referred to about the suppression of investment in acquiring the goods which have been found subject of undisclosed sales. 4. We are, therefore, of the opinion that no question of law which requires to be referred to this Court arise out of the Tribunal s appellate order. The order of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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