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TMI Blog2013 (4) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... ide letter dated 10.11.2008 stated that the assessee has not sold goods to M/s. Bajwa Rubber Industries. However, it was informed by the assessee that the assessee has purchased the goods from M/s. Bajwa Rubber Industries. A copy of statement of account of M/s. Bajwa Rubber Industries was also furnished along with reply. The A.O. did not accept the assessee's contention and came to the conclusion that the assessee was making sales outside books of account, she would have made more such sales to other parties out of the books of account. Under the circumstances, the A.O. estimated the sales of the assessee at Rs.75,00,000/- and after applying net profit rate of 7% the A.O. computed the income of the assessee at Rs.5,25,000/. The A.O. further added Rs.14,093/- shown by the assessee as discount. Thus, the total income was computed at Rs.5,39,093/- after allowing deduction under section 80C of the Act from income from other sources. The A.O. made the assessment at Rs.5,07,680/-. The A.O. further added an amount of Rs.31,68,900/- as unexplained investment made for purchase of shoes which was sold outside the books of account. Thus, the A.O. made additions of Rs.5,07,680/- and Rs.31,68,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded. In his statement Shri Kunal Bajwa admitted that these impound documents pertained to his concern and they show the out of books sales made to M/s Bunny Trading Co. It was found by the A.O. that all these sales were included in the unaccounted sale of M/s Shoe World (Bajwa) Exports which were declared by them during the their own assessment proceedings. The A.O. furnished the remand report dated 17.03.2011 which has been reproduced by the CIT(A) at page no.6 of his order. In the remand report the A.O. submitted that on examination it was found that during the survey proceedings the conclusion is inescapable that the amount treated as sales in the hand of the assessee is not sales to M/s. Bajwa Rubber Industries but purchase from M/s Shoe World (Bajwa) Exports and it should be treated as such. In the remand report, the A.O. confirmed that the assessee has not sold anything either to M/s. Bajwa Rubber Industries or to M/s. Shoe World (Bajwa) Exports. The assessee made submission in respect of remand report of the A.O. The assessee vide his letter dated 31.03.2011 filed a working of sales shown to have been made in the impounded document from M/s. Shoe World (Bajwa) Exports to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the A.O. of Rs.31,68,900/-. The relevant finding of the CIT(A) is reproduced as under :- (paragraph no.5.9) "5.9 The Ld. A.R. has also computed on the basis of impounded document that as against the purchase of Rws.8,94,405/- by the appellant, payment of only Rs.4,80,00/- was made by her. However, he could not produce any supporting document to show the source of payment of Rs.4,80,000/-. In view of these findings, the AO is directed to take unaccounted purchases made by the appellant at Rs.8,94,405/- instead of unaccounted sale of R.34,07,420/- taken in the assessment order. Since the purchase of R.8,94,405/- is out of the books of account, the AO is directed to add Rs.8,94,405/- as unaccounted investment u/s 69 instead of Rs.31,68,900/- added in the assessment order and thus the appellant gets a relief of Rs.22,74,495/- and accordingly ground no.2 is partly allowed." 7. As regards the unaccounted profit earned by the assessee in respect of the unaccounted purchases, the CIT(A) noted that the unaccounted purchases made by the assessee as computed was not shown anywhere in the books of account in the closing stock and therefore, the natural presumption would be that these un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d report from the A.O. and finally the A.O. found that on the basis of impounded material found during course of survey in the case of M/s. Shoe World (Bajwa) Exports that the assessee has made purchases from M/s. Shoe World (Bajwa) Exports. On the basis of impounded material, the assessee herself has calculated unaccounted purchases on the basis of loose paper of Rs.8,94,405/- and the same working has been given by the assessee to the CIT(A) vide letter dated 31.03.2011. In the said letter maximum profit was also calculated which was Rs.62,608/- being 7% of profit rate. The finding of CIT(A) is based on loose paper found at the time of survey in the premises sister concern of M/s Shoe World (Bajwa) Exports and on the basis of these documents and statement of the concerned parties in the impounded document, it was clearly mentioned the name of the assessee. The CIT(A) did not accept the affidavit filed by the assessee observing as under :- "In the statement, Shri Kunal Bajwa also accepted that the unaccounted sales were made to the appellant as recorded in these documents. Considering all these facts that Shri Kunal Bajwa of Shoe World (Bajwa) Export has clearly stated that he made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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