9911796707
TMI Blog2014 (10) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... principles. 4. Because on facts and in circumstances of the case, ld. CIT (A) has erred in going into irrelevant considerations in enhancing additions and his observations/conclusions are not based on sound reasoning and deserves to be struck down and entire claims of the assessee is to be allowed. 5. Because on facts and in circumstances of the case, the assessment order as well as observations of ld. A.O as well as of ld. CIT (A) are not correct both legally as well as factually. In fact, observation of ld. CIT (A) is against the principals of accounting as well as law. 6. That the additions as well as assessment order as well as enhancement in 1st appeal is bad in law as well as on facts and appropriate relief deserves to be allowed. GROUNDS IN I.T.A. No.451/LKW/2013: 1. Because on facts and in circumstances of the case, ld. CIT (A) has erred in holding that appeal as filed in time which was filed late. 2. That the Ld. CIT (A) has erred in not allowing the appeal to be withdrawn without any reason when specific request has been filed. 3. That ld. CIT (A) has erred in holding that the order passed by ed. CIT II, Kanpur u/s 264 dated 30.05.2011 as non jurisdictional. 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tiranga Agarbatti and other products like mehandi, dhup, etc. and has filed his return of income on 31.10.2007 for assessment year 2007-08 declaring income of Rs. 10,44,720/- and return of income for assessment year 2008-09 was filed on 30.9.2008 declaring income of Rs. 14,25,590/-. 5. A survey action under section 133A of the Income-tax Act, 1961 (hereinafter called in short "the Act") has been conducted in the premises of the assessee on 2.11.2007 and the relevant documents related to unaccounted sales were impounded. The survey action also included unaccounted income of the assessee for assessment year 2008-09 for which revised return of income has been filed by the assessee on 18.1.2010 showing the surrendered income of Rs. 1,16,20,000/-. During the course of survey action, assessee had surrendered net income of Rs. 1.50 crores but has filed return of income for assessment year 2008-09 showing his surrendered income only at Rs. 1,16,20,000/- and for assessment year 2007-08 surrendered income has not been offered. The cash of Rs. 1,03,43,877/- has been considered in assessment year 2008-09. 6. The impounded materials were examined and analysed by the Assessing Officer for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department and they have taken the figures from the computer, in which accounts were maintained by his Accountant. Due to certain glitches in the computer, difference in figure were shown in the closing cash balance as on 31.3.2007 and opening cash balance as on 1.4.2007. The closing cash balance was shown as on 31.3.2007 at Rs. 76,690/- and the opening cash balance as on 1.4.2007 was at Rs. 1,04,20,567-. The higher figure of opening balance was on account of glitches in the computer and the survey team did not make any effort to verify from books of account of succeeding years as to whether this opening balance was further carried forward on subsequent dates. The ld. counsel for the assessee has further contended that the Assessing Officer has made the addition on account of difference in cash balance without making any further verification of the record. Thus, it is not sustainable in the eyes of law. 11. So far as addition on account of suppressed sales is concerned, the ld. counsel for the assessee has contended that no addition on account of suppressed sales can be made. If the addition is to be made, that can only be made at net profit rate shown by the assessee in earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os.4 to 9, according to which the total sales as per the details was at Rs. 21,88,28,854/- in assessment year 2007-08. Undisputedly, the assessee has shown total sales of the year at Rs. 16,14,59,076/-. The difference of Rs. 5,73,69,778/- was considered to be the suppressed sales by the ld. CIT(A) in para 6 of his order. The ld. CIT(A) has further added the suppressed sales computed by the Assessing Officer at Rs. 1,19,44,809/- after rejecting the books of account under section 145(3) of the Act. When the ld. CIT(A) has worked out the total sales from the details found in the computer of the assessee and after giving a credit of the sales declared by the assessee during the year, the difference was considered to be suppressed sales by the ld. CIT(A), we do not find any justification in enhancing the suppressed sales by the ld. CIT(A) by making addition of the suppressed sales estimated by the Assessing Officer without any basis after rejecting the books of account of the assessee. Therefore, we are of the view that during the assessment year 2007-08, the total suppressed sales would only be of Rs. 5,73,69,778/-. 16. Similarly, in assessment year 2008-09, the suppressed sale was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales/receipts for making addition. 21. In the instant case also nothing has been brought on record by the Revenue with regard to the unexplained investment in the purchase. Therefore, addition of the entire suppressed sales is not called for; only gross profit worked on the sales is required to be added to the total income of the assessee. 22. Now the question arises whether the gross profit is to be estimated or net profit is to be worked out for making the addition, as contended by the ld. counsel for the assessee. In this regard, we are of the view that the initial gross profit is to be worked out; thereafter the other indirect expenses are to be reduced to work out the net profit. 23. In the instant case, the other indirect expenses have already been booked while computing the normal income of the assessee as per books of account. Therefore, the gross profit rate is to be applied. The ld. counsel for the assessee has filed a comparative chart of the gross profit rate, on which the total income was shown by the assessee and from this chart it is noticed that the assessee has declared gross profit rate at 14.10% in assessment year 2007-08 and 12.02% in assessment year 2008-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
