9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 900 - AT - Income TaxUnaccounted sales arises due to difference in receipts between the Assessee's books of account and as per Form No. 26AS - CIT(A) affirmed the amount on account of mismatch of amounts as per Form No. 26AS and gross receipts as per audited accounts on the ground that said amount was not accounted for by the Assessee in its gross receipts - HELD THAT - As decided in the cases of Shri Kayyum Ahmed 2015 (5) TMI 1073 - ITAT DELHI and Sohan Lal Aggarwal 2021 (8) TMI 1292 - ITAT DELHI and submitted that in the identical situation, the Hon ble Courts clearly held that in case of the difference between the Assessee s books of account and as per Form No. 26AS, then on the said difference,only embedded portion of the profits is to be taken into consideration and the addition is to be made thereon but entire turnover cannot be added to the income of the Assessee We are inclined to accept the said decisions and consequently while taking into consideration the net profit rate of the previous year, in our considered view, the justice would be met by confirming the addition only to the extent of 5% of the undisclosed turnover. Hence, the AO is directed to restrict the addition to such extent only.
Issues:
Appeal against addition of unaccounted sales due to difference in receipts between books of account and Form No. 26AS for Assessment Year 2014-15. Analysis: The Assessee appealed against the addition of ?41,40,753 made by the AO on account of unaccounted sales due to a mismatch between the Assessee's books of account and Form No. 26AS. The Ld. CIT(A) affirmed the addition, stating that the amount was not reflected in the Assessee's gross receipts. The Assessee relied on judgments by coordinate benches in similar cases to argue that only the embedded portion of profits should be considered for addition, not the entire turnover. The Tribunal agreed with this argument, citing the principle that the total sales cannot represent the profit of the Assessee. The Tribunal directed the AO to restrict the addition to 5% of the undisclosed turnover, in line with the net profit rate of the previous year. The appeal filed by the Assessee was partly allowed based on this reasoning. The Ld. DR supported the orders passed by the authorities below but did not challenge the decisions of the coordinate benches. The Tribunal, after considering the facts and circumstances of the case, found it aligned with the judgments of the coordinate benches. Consequently, the Tribunal accepted the decisions and directed the AO to limit the addition to 5% of the undisclosed turnover. By following the net profit rate of the previous year, the Tribunal believed that justice would be served. As a result, the appeal filed by the Assessee was allowed, and the addition was restricted to 5% of the undisclosed turnover. In conclusion, the Tribunal's judgment in this case centered on the treatment of unaccounted sales arising from a difference in receipts between the Assessee's books of account and Form No. 26AS. By applying the principle that only the embedded portion of profits should be considered for addition, the Tribunal restricted the addition to 5% of the undisclosed turnover. This decision was based on the net profit rate of the previous year and aligned with judgments from coordinate benches in similar cases.
|
