9911796707
TMI Blog2012 (11) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... sales determined by the Sales Tax Department in the sales tax assessment order. The sales declared in the books of account are higher than sales found noted in loose paper – addition deleted – in favor of assessee Addition - unaccounted sales to customers - addition has been made by the Assessing Officer on the basis of notings in various loose papers – Held that:- Assessee has not issued any bill for cash sales and no record except the total amount of sales made during the day is kept and that the bills are issued only for credit sales and the sales made to franchises - in the absence of any expenditure brought on record outside the books by the assessee, the assessee cannot be given the benefit for application of gross profit – In favor of revenue Unaccounted Investment in valuables – alleged that assets are in the name of Shri Meenu M Agarwal and have not attempted to verify the source of the income from which the investment have been made. It is also a fact that Shri Manoj D Agarwal has made a disclosure of Rs.90,000/- as household goods and valuables under VDIS filed by him – Held that:- Source of income in case of the Director is not in his individual capacity but the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e passed on to another person who has not committed the offence - department has to prove that unjust enrichment would mean that some extra effort is required in addition to merely looking at the balance sheet or profit & loss account on the part of the department – In favor of assessee - IT(SS)A No. 235, 269/A/2004 & IT(SS)A No.14/Ahd/2007 - - - Dated:- 20-1-2012 - Shri Mukul Kumar Shrawat and Shri B.P. Jain, JJ. Assessee By: Shri M.K. Patel, AR Revenue By: Shri Alok Johri CIT-DR ORDER PER B.P. Jain, Accountant Member:- These cross-appeals of the assessee and the Revenue arise from the order of Ld. Commissioner of Inc-tax (Appeals)-III, Ahmedabad dated 25-06- 2004 for the block period from 01-04-1995 to 08-01-2002. The assessee has also filed the appeal against the order of Ld. CIT(A)-III, Ahmedabad dated 06- 11-2006 for the said block period. The ground raised by the assessee in the cross-appeal as under:- IT(SS)A No.235/Ahd/2004 by the assessee. 1. The learned CIT(A) has erred in confirming addition of Rs.4,49,558/- on account of cash found at the time of search. In view of the facts and submissions only cash of Rs.2,89,105/- is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned CIT(A) has erred, on the facts of the case and in law in deleting the addition made by the Assessing Officer being unaccounted advance made to various parties amounting to Rs.3,79,467/- written in coded form by omitting two zeros as per page No.1 and is backside of Annexure A/2 sized. 3. The learned CIT(A) has erred, on the facts of the case and in law in deleting the addition made by the Assessing Officer being unaccounted advances to various parties amounting to Rs.4,1,259/- written in coded form by omitting two zeros as per page No.3 of Annexure A/2 seized. 4. The learned CIT(A) has erred, on the facts of the case and in law in deleting the addition made by the Assessing Officer being unaccounted advance mode to Shri Premchand amounting to Rs.9,90,000/- and interest income earned on the said advances of Rs.53,248/- written in coded form by omitting two zeros. 5. The learned CIT(A) has erred, on the facts of the case and in law in deleting the addition made by the Assessing Officer being unaccounted advance made to Shri Kantibhai amounting to Rs.11,88,000/- and interest income earned on the above advance of Rs.69,717/- written in coded form by omitting two zero ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th all the family members. The Ld. CITDepartmental Representative on the other hand, relied upon the order of both authorities below. 4. The explanation of the assessee that the cash found for which the additions have been made was cash-in-hand available with other family members is without any cogent explanation or any evidence. Therefore, in the circumstances and facts of the case, the pleadings made by the Ld. AR before the authorities below and before us cannot help the assessee. In the circumstances and facts of the case, we find no error in the order of Ld. CIT(A) who has rightly confirmed the action of the Assessing Officer. Thus, the ground No.1 of the assessee is dismissed. 5. As regards ground No.2 of the assessee and ground No.1 of the Revenue. The brief facts are that the addition has been made by the Assessing Officer on the basis of notings made in seized material and the explanation given by Shri D.D. Agarwal in his statement recorded during the course of search proceedings. The addition is based on notings made on page-23 of loose paper file of Annexure A-1 seized from Rasranjan Complex. On the basis of notings therein A.O has concluded that as admitted by Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed in the said statement that the coded form should be read after removing the bracket from the reading of the document at assessee s PB-87. It appears that Mr. M. D Agarwal has put the zero at some places where the figures are in the round amount and at other places he has written the figure within the bracket and after the bracket as well. In view of the sequence of notings and applying the uniformity, the Ld. CIT(A) has rightly confirmed the action of the AO for treating the figure of 2,) as Rs.2 lakh). Therefore in the circumstances and facts of the case, we find no infirmity in the order of Ld. CIT(A), who has rightly confirmed the action of the AO. 8. As regards the interest we also concur with the views of Ld. CIT(A) since there is no material with the Assessing Officer that the assessee has received the interest. Therefore the Ld. CIT(A) has rightly deleted the addition. Thus, ground No.2 of assessee and ground No.1 of Revenue are dismissed. 9. As regards ground No.2 of the Revenue. The brief facts are that addition made by the Assessing Officer is based on the notings on page-1 and back side of page-1 of seized Annexure-A/2. The AO on the basis of his detailed obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the A.O on the basis of notings made on page-2 of Annexure-A/2 as discussed by him in para-6 more particularly on page-25 and 26 of the assessment order. Briefly speaking the Assessing Officer while applying the same analogy of converting the figures after which the bracket are put as noted in the seized material by adding two zeros to the said figu9re while relying upon the statement of Shri Manoj D Agarwal recorded during the course of search proceedings and the notings made in various seized annexure. 14. Ld. CIT(A) restricted the addition of Rs.10 lakh and Rs.53,786/- to Rs.10,000 and Rs.537.86 keeping in view the statement of Shri Manoj D Agarwal and in the absence of any contrary finding of the AO. 15. We concur with the views of Ld. CIT(A) that the said amount of 10,) cannot be read as Rs.10 lakh and interest of 537)86 cannot be read as Rs.53,786 in the absence of any corroborating evidence on record. Therefore, Ld. CIT(A) has rightly allowed the relief to the assessee and we find no error in his order. Thus, ground No.4 of the Revenue is dismissed. 16. As regards to ground No.5 of Revenue which pertains to addition of Rs.12 lakh as advanced to Kantibhai and inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee-company and the staff salary is paid by M/s B.D. Vakil Co. During the course of search proceedings, various books of account were found and seized from the shop premises at Ahmedabad Domestic Airport. Further, books of account were also found and seized from the residence of Smt. Bharatiben Dax Vakil. On the basis of said books of account of M/s. B.D. Vakil Co. the AO worked out unaccounted sales reflected therein at Rs.14,59,128/- after giving credit of sales as per books of the assessee-company to the said concern. The AO then on page-34 of the assessment order proceeded to make addition of Rs.11,78,245/- as unaccounted sales made by the assessee-company. Ld. CIT(A) confirmed the action of Assessing Officer. 23. It was argued by Learned Counsel for the assessee that the sales do not belong to the assessee and alternatively only gross profit should be added. 24. On the other hand, Ld. CIT-DR argued that the assessee has already debited all the purchases and expenses in the regular books of account. Thus sales found outside the books of account are nothing but undisclosed income of the assessee and therefore cannot be given the credit for purchases and the expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of notings in various loose papers as set out on page-36 of the assessment order. The AO has observed that assessee has not issued any bill for cash sales and no record except the total amount of sales made during the day is kept and that the bills are issued only for credit sales and the sales made to franchises. The AO was of the view that the assessee s contention that certain sales are recorded is not supported by any documentary evidence and accordingly, the sales noted on various loose papers aggregating to Rs.3,29,791/- is treated as unaccounted turnover. The Ld. CIT(A) confirmed the action of Assessing Officer. 30. The facts in the present case are identical to the facts in ground No.5 of the assessee hereinabove and therefore in the circumstances and facts of the case, in the absence of any expenditure brought on record outside the books by the assessee, the assessee cannot be given the benefit for application of gross profit. Therefore, we find no error in the order of Ld. CIT(A) in this respect. Thus, ground No.6 of the assessee is dismissed. 31. As regards ground No.7 of the assessee for trading investment in valuable to the extent of Rs.60,000/- as made by Sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on page-75 to 79 of Annexure-A/1. The AO while rejecting assessee s contention has observed hat Shri Kumbharam Jhat could not properly explain how the papers on which details regarding cash payment are made in his handwriting were found and seized from the residential premises of the Director at Rasranjan Complex. Further, nowhere the names of persons or the concerns referred to by Shri Kumbharam Jhat have been found noted in the seized documents except the name of Shri Balu. He has also observed that all the concerns whose names have been given are owned by the relatives of Shri Manoj D Agarwal. A.O accordingly concluded that the expenditure to the extent of Rs.2,77,298/- noted on the said pages and incurred in cash having not been reflected in the books of account of the assessee-company is nothing but undisclosed income of the assessee-company. 34. Ld. CIT(A) deleted the addition vide para-16.2 of his order in the absence of any evidence against the assessee. 35. We have heard the rival contentions and perused the facts of the case. We concur with the views of Ld. CIT(A) that in the statement of Shri Kumbharam Jhat it has clearly been accepted by him that the notings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. In our opinion, that having relied upon such documents found from the possession of a third party, the AO ought to have given an opportunity to the assessee for cross-examination of the said person and rebuttal of the seized material so found from Kirtikumar S Shah. It is not the case of the AO that any incriminating documents have been found from the possession of the assessee to establish payment of salary in excess of Rs.2,500/- per month shown in the regular books of account. In the circumstances and facts of the case, we find no infirmity in the order of Ld. CIT(A) who has rightly deleted the addition made by the AO. Thus, ground No.8 of Revenue is dismissed. 39. As regards ground No.9 of Revenue the Ld. CIT(A) has allowed the set off and directed the Assessing Officer to consider the investment of Rs.14,26,148/- as out of the said unaccounted sales and no separate addition is required to be made for such unaccounted investment as the same are out of unaccounted income for which separate addition of Rs.15,08,036/- has been confirmed by the Ld. CIT(A), as the set off has been given as there is no live link between the income and the investment and no evidence were foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 158BFA(2) of the Act on 31/01/2004. The penalty proceedings were kept in abeyance as the assessee had preferred appeal with CIT(A) against the assessment order. While finalizing the appeal the ld. CIT(A) II, Ahmedabad vide his order No. CIT(A)III/CC.2(4)73/03-04 dated 25.04.04 has restricted the as with respect of unaccounted sales made by the AO of Rs.15,08,036. 2. As per amended provisions penalty proceedings was taken up for disposal. Accordingly, a fresh opportunity of being heard to the assessee was issued to the assessee on 17/02/2006 served upon the assessee on 25/02/06 requesting the assessee to attend the office of the undersigned within three days of receipt of this notice or furnish any explanation against penalty proceedings. In response, the assessee neither attended the office of the undersigned nor furnished any written submission in compliance to the show cause notice issued. 3. The issues involved in the case of the assessee is discussed as under: [1] During the assessment proceedings for the block, the AO worked out the year-wise undisclosed income to the tune of Rs.66,99,728/- as against declared undisclosed income of Rs.68,350/-. The ld. CIT(A) while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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