2015 (11) TMI 1120 - AT - Income Tax

Unaccounted cash sales - CIT(A) deleted the addition - Held that - There is force in the contention of learned counsel for the assessee that even if the cash sales issue is presumed to be against the assessee, then also only net profit rate could be applied on such sales and that shall be covered by the amount of ₹ 2,00,000 surrendered already by the assessee and has been assessed by the Department. We find that the Assessing Officer in the computation of assessable income has accepted the surrender of ₹ 2,00,000, which was surrendered by the assessee in its return of income. In these facts, we hold that there is no mistake in the order of the Commissioner of Income-tax (Appeals) in deleting the addition of ₹ 7,50,000 on account of undisclosed cash sales and therefore, the ground of appeal of the Revenue is dismissed. - Decided in favour of assessee.

Summary

Issues:
Appeal by Revenue against deletion of addition on account of unaccounted cash sales during a block period from April 1, 1996, to December 10, 2002.

Analysis:
I. T. (SS) A. No. 8/Agra/2012 (by the Revenue):
The Revenue appealed against the Commissioner of Income-tax (Appeals) order deleting an addition of Rs. 7,50,000 related to unaccounted cash sales. The Revenue requested condonation of a 20-day delay in filing the appeal, which was granted. The only ground of appeal by the Revenue was the deletion of the addition. The Departmental representative relied on the Assessing Officer's order, highlighting evidence supporting the addition. However, the assessee's counsel argued that no unaccounted cash sales were made and even if assumed, only the profit margin should be added. The Commissioner observed a surrender of Rs. 2,00,000 by the assessee, covering the potential profit on the disputed cash sales. The Tribunal found merit in the assessee's contentions, noting that the surrendered amount had been accepted by the Department, leading to the deletion of the Rs. 7,50,000 addition.

C. O. No. 57/Agra/2012 (by the assessee):
Following the dismissal of the Revenue's appeal, the cross-objection by the assessee was deemed to be without merit and was consequently dismissed. Both the appeal by the Revenue and the cross-objection by the assessee were ultimately dismissed by the Tribunal. The order was pronounced on July 24, 2015, in open court.