1999 (11) TMI 117

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..... ed that during the course of survey cash was found short by sum of Rs. 22,756. Stock was also found short by an amount Rs. 4,983. It was further found during the course of survey that cash sales effected by the assessee were not being fully recorded in the books of account. It was found that cash memos were not issued on the date of survey in respect of cash sales aggregating to Rs. 9,640. The assessee declared gross profit rate of 5.99 per cent as against g.p. rate of 6.56 per cent declared in the immediately preceding year. The assessee submitted explanation for decline in g.p. rate. The AO did not accept those explanation and applied g.p. rate of 7 per cent. The AO thus made an addition of Rs. 20,310 in the declared g.p. The Dy. CIT(A) a .....

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..... 8 : (1994) 208 ITR 22 (All) (AT) at p. 42. The learned counsel pointed out that the AO has brought no material on record to justify the addition so made in the declared trading results. Shri Ojha, learned counsel, further explained that the discrepancy found in the course of survey were also properly explained before the AO but he has failed to consider them in proper perspective. The learned counsel thus strongly urged that the additions should be deleted. 5. The learned Departmental Representative submitted that the Dy. CIT(A) has sustained only a part amount of the addition made in the declared trading results which hardly comes to about Rs. 10,000. The addition so sustained by the Dy. CIT(A) is based on the g.p. rate of 6.56 per cent .....

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..... sales during the year under consideration has increased to Rs. 18,81,741 as against sale of only Rs. 8,30,464 in asst. yr. 1988-89.1 am of the view that it would be just and proper to direct the AO to restrict the addition in the declared g.p. by an amount of Rs. 6,000 only. The AO is directed to grant necessary relief. 7. As regards the addition of Rs. 4,100 sustained by the Dy. CIT(A) on account of alleged interest income received by the assessee in respect of short cash found during the course of survey, I am inclined to agree with the assessee's submission that there was no evidence on record to show that the assessee had derived income from interest on the alleged short cash found at the time of survey at shop premises. The assessee .....

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