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TMI Blog2013 (11) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has reduced the rate of profit on this amount to 4% and the department has accepted the same. There is no reason to treat the other portion of the undisclosed sale of Rs. 2,94,44,341/- differently. Therefore the order of the ClT(A) holding that only profit @4% on the turnover of Rs. 2,94,44,341/- should be assessed is reasonable and liable to be upheld – Decided against the Revenue. - I.T.(SS) A.No.4/Hyd/2013 - - - Dated:- 4-9-2013 - Shri Chandra Poojari And Smt. Asha Vijayaraghavan,JJ. For the Appellant : Shri D. Sudhakar Rao, CIT For the Respondent : Shri K. C. Devdas, A.R. ORDER Per Smt. Asha Vijayaraghavan, J.M. This appeal filed by the Revenue is directed against the Order of the CIT(A)-VI, Hyderabad dated 31.12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the CIT(A) dismissed the appeal in limine. On appeal, the ITAT restored the matter to the files of the CIT(A) for disposal on merits. 3. The addition in respect of which the revenue is on appeal before us is the addition of Rs.2,94,44,341/- representing credits in the Bank accounts. During the search, the seized documents indicated two types of undisclosed sales by Assessee's concerns to M/s. SOL. According to the Assessee "Type 1" transactions represented actual unaccounted sales by Assessee and "Type 2" transactions represented accommodation bills. The amounts received on account of "type 2" transactions were immediately withdrawn and handed over to Mr.Mohan of SOL. 4. The Assessing Officer while computing the undisclosed income has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3.12 For the reasons discussed earlier, it is a concluded that the amount of Rs.34,32,615 is the undisclosed turnover of the assessee in the case of Kishan Trading Co. 2.3.13 Thus the total undisclosed turnover of the assessee in both the concerns is Rs.1,48,63,228 (Rs.1,14,30,613 + Rs.34,32,615) 2.3.14 Having computed the undisclosed turnover under various heads, the total of such turnover of the assessee in the block period is computed as under:- 1. Unaccounted sales (para 2.1.1) : Rs. 54,16,096 2. Unaccounted sales in 2000-01 (para 2.2.5) : Rs. 6,86,821 3. Unaccounted turnover (para 2.3.13) : Rs.1,48,63,228 Total : Rs.2,09,66,145 (4). Supposed Sales to SOL: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed by SOL in the case of Kishan Trading Company Rs.2,12,19,391 Total Rs.2,94,44,341 2.4.2. As discussed above, this amount of Rs.2,94,44,341/- is treated to be undisclosed income of the assessee, in the interest of the Revenue, on protective basis". 4.1. Thus Assessing Officer made the addition of Rs. 2,94,44,341/- on a protective basis. 5. On appeal, the CIT(A) partly allowed the Assessee's appeal and deleted the addition of Rs.2,94,44,341/- but upholding the addition of profit derived on the transactions at 4% of that amount holding as under: "8.3. The observations of the Assessing Officer in the assessment order and the submissions of the appellant were perused with reference to the information brought on the record. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank) and Rs.2,79,35,137/- related to M/s. Kishan Trading Co. (A/c.No.242 and 29). Thus, the amount of Rs.2,94,44,341/- is net of credits into bank accounts and the unaccounted sales quantified (Rs.1,54,63,228/-) separately. Hence, there is no substance in the argument of the appellant that these figures were already considered for arriving at the unaccounted turnovers of the appellant. 8.4 However, it is also a amounts were treated as unaccounted income/sales of the appellant only on protective basis since such sales represent the accommodation sales made by the appellant for helping M/s.SOL group. Considering the fact that such sales were made on fictitious basis as noticed during the course of search proceedings, the same cannot represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for any customer including M/s. SOL group. Accordingly, in this case, it may be reasonable to quantify the margin of profit on such sales at par with the margin calculated on the unaccounted sales as determined in the earlier paragraphs of this order. Accordingly, it is held to be reasonable to calculate the profits on the sales of Rs. 2,94,44,391/- made to M/s. SOL group on Type-2 bills, at 4%. Under the circumstances, the treatment of entire sales on type-2 bills to the extent of Rs. 2,94,44,391/-, as the income of the appellant do not survive. Instead the profit on such sales @4% is directed to be estimated. This ground of appeal is treated as partly allowed. 6. Aggrieved the revenue is on appeal before us. The Assessing Officer him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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