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2024 (4) TMI 128 - AT - Income TaxEstimation of gross profit - addition on account of alleged gross profit @ 28% on alleged unaccounted sales during the impugned assessment year - as submitted discrepancy in stock was duly reconciled by the assessee - appellant and thus, the allegation of DCIT that the stock has been sold by the assessee - appellant outside books of accounts, is completely based on suspicion and surmises - HELD THAT - There is no dispute that during the assessment proceedings, the Assessing Officer has examined the books of account which were produced before him. We find that the profit and loss account has been made for the period 01.04.2011 to 13.12.2011 which is the date of survey. Assessment has been made and income has been declared for the F.Y. 01.04.201 to 31.03.2012 wherein the gross profit is shown at Rs. 2,68,36,334/-. Addition on account of gross profit amounts to double addition as gross profit of the assessee as per books of account included gross profit of alleged sales outside the books. Thus addition on account of alleged unaccounted sales has been deleted by the ld. CIT(A) and as mentioned above, gross profit as on 31.03.2012 includes the profit on the alleged unaccounted sales. We do not find any merit in the addition - We accordingly, direct the Assessing Officer to delete the addition. Assessee appeal allowed.
Issues involved:
The appeal pertains to an order by the ld. CIT(A) -1, Gurgaon dated 16.09.2016 for A.Y. 2012-13. Summary: Issue 1: Addition on account of alleged unaccounted sales - The assessee challenged the addition of Rs. 98,29,479/- on account of alleged gross profit @ 28% on unaccounted sales. - The Assessing Officer added the stock difference and gross profit on unaccounted sales based on a survey operation. - The assessee contended that the alleged discrepancy in stock was reconciled and the addition was arbitrary and based on suspicion. - The ld. CIT(A) confirmed the addition of Rs. 98,29,479/- based on gross profit but deleted the addition for unaccounted sales. - The ITAT found that the gross profit as on 31.03.2012 already included profit from alleged unaccounted sales, hence, adding gross profit again would be double addition. - The ITAT directed the Assessing Officer to delete the addition of Rs. 98,29,479/-. In conclusion, the appeal of the assessee was allowed by the ITAT, and the addition on account of alleged unaccounted sales was deleted.
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