9911796707
TMI Blog2025 (5) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are that the assessee is an individual carrying on the business of manufacture of Furniture under the sole proprietorship concern M/s. J.M. Sales. Survey action u/s. 133A of the Act was conducted on 06.02.2019 during which shortage of stock to the tune of Rs. 79,96,450/- was found and the same was accepted by the assessee as unrecorded sales. Subsequently, notice u/s. 143(2) of the Act was issued and served upon the assessee for carrying out the scrutiny proceedings followed by validly service of notice u/s. 142(1) of the Act. During the course of assessment proceedings, ld. AO observed that the assessee has himself admitted and offered the additional income declared under the head 'Income from other sources' in his computation sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, penalty u/s. 271AAC is initiated on this ground. 6. Subject to the above, the total income of the assessee is recomputed as below: Income from business after depreciation, remuneration and interest Rs. 1,00,56,640/- Less : Survey declaration Rs. 79,96,450/- Total Rs. 20,60,190/- Add : Deemed Income u/s. 69A w.r.t.115BBE Rs. 79,96,450/- Total income Rs. 1,00,56,640/- Total Assessed Income R/o. to the nearest ten Rs. 1,00,56,640/- 3. Subsequently, the assessee preferred appeal before the ld.CIT(A) challenging the impugned addition of Rs. 79,96,450/- and also challenging the action of the AO invoking section 69A r.w.s.115BBE of the Act. Ld.CIT(A) after considering the submissions recorded on survey was satisfied that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) be kindly reduced to the Gross Profit margin on said amount. Accordingly, Appellant be granted just and proper relief in this respect. 2. On the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('The Act') it be held that Ld. Assessing Officer and Ld. CIT(A) both erred in not guiding the Appellant to correctly compute its income, in as much as taxing the entire amount of Rs. 79,96,450/- instead of the profit component in said sales amount. Accordingly, Appellant be granted just and proper relief in this regard. 3. On the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('The Act') it be held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard the rival submissions and perused the record placed before us. Assessee is aggrieved with the addition of undisclosed business income of Rs. 79,96,450/- which was calculated on the basis of shortage of stock found during the course of survey carried out on the assessee's premises on 06.02.2019. We notice that the shortage of stock has been calculated on the basis of closing stock calculated in the estimated trading account and the same has been reduced from the physical stock found during the course of survey. We notice that the physical stock found in the course of survey amount to Rs. 1,80,02,300/- and the closing stock calculated by applying the gross profit rate as on the date of survey amounting to Rs. 2,59,98,750/-. Based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld been taxed is an afterthought because during the course of survey proceedings as well as in the return of income filed the assessee has admitted the unrecorded sales as its additional income. However, taking note of the fact that during the course of survey the assessee has stated that the cash received from unrecorded sales has been partly utilised for giving advance to the farmers for purchase of raw material and partly for expansion of the existing showroom, we find that details of advance given to the farmers for purchase of raw material and the actual amount spent for expansion of the existing showroom is neither discernible from the audited financial statements for F.Y. 2018-19 nor any such information is provided by the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
