2014 (8) TMI 67 - AT - Income Tax

Unaccounted job work charges Addition on impounded bill books Held that - The assessee could not place any evidence to co-relate that the entire job work charges shown were duly recorded in its books of account there was no infirmity in the order of the CIT(A) in this regard and the addition is confirmed the assessee could not place any evidence to explain that the cash sales shown in the bill book, which was duly recorded in the regular books of account - Decided against Assessee. Undisclosed capital employed Held that - CIT(A) reduced the amount to ₹ 5 lakhs - the assessee has made sales outside the books of account, in which additional capital is required and the CIT(A) has reduced the addition from ₹ 9 lakhs to ₹ 5 lakhs in this account - no further interference is needed for in the order of the CIT(A) Decided against Assessee.

Summary

Issues:
1. Dispute over calculation of enhanced/additional sale
2. Gross profit rate application on job work receipts and sales outside books
3. Addition on account of undisclosed capital employed
4. Allegation of inadequate opportunity of being heard

Analysis:
1. The appellant disputed the calculation of enhanced/additional sale, arguing that the ld. CIT(A) erred in confirming it without allowing the claim. The discrepancy arose from unaccounted job work charges, with the Assessing Officer treating the difference as concealed income. The ld. CIT(A) upheld the addition, stating the appellant failed to provide evidence to support the claim of clerical mistakes. The Tribunal confirmed the addition due to lack of substantiating material from the appellant.

2. The disagreement on applying gross profit rates to job work receipts and sales outside books led to another ground of appeal. The ld. CIT(A) upheld the additions based on impounded bill books showing unrecorded cash sales. Despite the appellant's challenge, no evidence was presented to link the impounded sales with regular books of account. The Tribunal affirmed the ld. CIT(A)'s decision due to the absence of supporting evidence.

3. An addition of undisclosed capital employed was contested, with the Assessing Officer computing extra capital required for sales outside books. The ld. CIT(A) reduced the addition, acknowledging the necessity of additional capital for off-the-books transactions. The Tribunal upheld the ld. CIT(A)'s decision, concluding that the reduction to &8377; 5 lakhs was justified.

4. Lastly, the appellant raised concerns about inadequate opportunity to present their case. The Tribunal addressed all grounds related to additions sustained by the ld. CIT(A) despite the absence of specific appeals on individual additions. The appellant's failure to provide substantial evidence to refute the additions led to the dismissal of the appeal. The order pronounced on 28.7.2014 confirmed the decisions made by the ld. CIT(A) on all issues, resulting in the dismissal of the appellant's appeal.