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TMI Blog2014 (12) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the books was accepted - the entries recorded in the diary etc. were treated as incriminating and reliable material - In case the assessee was transacting business outside the books of accounts, necessarily he would have earned profit from the transactions - Some profit would have been used for personal expenses and entertainment etc. - The entire undisclosed profits would not have been redeployed in trade or for purchase of undeclared stocks - The factor and factum has not been taken into account - the assessee was unable to explain and match the entries given in the diary and the loose papers with the entries found in the books of accounts - The transactions were for a substantial amount – the assessee had also accepted addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perations on 13.10.1995 at his residential and business premises under Section 132 of the Income Tax Act, 1961. Seizure of incriminating material including cash of ₹ 12,42,950/- was made. Subsequently notice under Section 158BC dated 15.03.1996 was issued requiring the assessee to file return of income for the aforementioned block period. The respondent assessee filed return on 27.08.1996 declaring undisclosed income of ₹ 14 lacs, the break up of which is as under:- (a) Undisclosed cash ₹ 5,13,650 (b) Excessive stock ₹ 6,07,900 (c) On a/c of incriminating loose papers, expenses, undisclosed assets, marriage expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal restored the issue to the Assessing Officer. It is stated at the Bar by the counsel for respondent assessee that in the consequential or in the appeal effect order, the Assessing Officer had sustained addition of ₹ 1,58,910/- on account of undisclosed stock and the said addition has been accepted by the assessee. 7. With regard to profit from undisclosed sales, the Assessing Officer has recorded that a diary and certain loose papers were found. The Assessing Officer computed the figures mentioned in the diary and loose papers as ₹ 1,37,62,147/-. The Assessing Officer held this turnover of ₹ 1,37,62,147/- was not recorded in the books of accounts. He applied gross profit rate of 6.5% to compute undisclosed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are arrived at, by your honour in respect of my diary are grossly wrong as the point given in the figures has been totally ignored. Over and above all, we have surrendered all the assets cash and unaccounted expenses in our block returns. Whatsoever unaccounted cash, unaccounted stock and unaccounted expenses incurred, are surrendered is the result of business transactions not recorded in the books of accounts, on the points of law, facts and justice it is wrong to tax the same income twice, once on assets and secondly on the basis of transactions resulting with the creation of the assets. Hence it is prayed that as your Honour is taxing the unaccounted cash, stocks and expenditure the transactions from which these assets are accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of search and also ₹ 6 lacs on account of excessive stock and therefore no addition should be made on account of profits outside the books of accounts. Thus the factum that the assessee had earned undeclared profits outside the books was accepted. In other words, the entries recorded in the diary etc. were treated as incriminating and reliable material. In case the assessee was transacting business outside the books of accounts, necessarily he would have earned profit from the said transactions. Some profit would have been used for personal expenses and entertainment etc. The entire undisclosed profits would not have been redeployed in trade or for purchase of undeclared stocks. The said factor and factum has not been taken into acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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