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TMI Blog2015 (6) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ng heard to assessee. - Decided in favour of revenue for statistical purposes. Unexplained cash found at the time of search - CIT(A) deleted the addition - Held that:- As seen from the facts on record, neither at the time of search operation nor during the assessment proceeding, assessee has offered any reasonable explanation with regard to the source of cash found at the time of search. However, before the ld. CIT(A), assessee pleaded that cash found represents sales effected till the date of search. When assessee does not maintain any cash book, onus is on assessee to establish link between the cash found and receipts from sales by producing corroborative evidence. Thus remit the matter back to the file of AO for deciding afresh - Decided in favour of revenue for statistical purposes. - ITA No. 1274/Hyd/2013 - - - Dated:- 8-5-2015 - Shri P. M. Jagtap And Shri Saktijit Dey,JJ. For the Petitioner : Smt. G. Aparna Rao For the Respondent : Shri S. Rama Rao ORDER Per Saktijit Dey, J. M. This appeal by the department is directed against the order dated 18/06/2013 passed by ld. CIT(A)-V, Hyderabad for AY 2010- 11. 2. Department has raised eight groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional income of ₹ 2 crores. However, there being no material found by the department to prove such additional income, there is no reason to declare such income in the return filed. 4.1 AO on going through the seized material found that at the time of search and seizure operation while taking inventory of physical stock value of such stock stood at ₹ 22,88,59,690 as per the MRP. AO observed that in the statement recorded from assessee on 15/10/09 at the time of search and seizure operation, when assessee was asked to explain about the stock found, he admitted that the inventory of stock was correct. Therefore, the explanation of assessee subsequently that there is no reason for declaring such additional income is not acceptable. However, AO referring to the statement recorded from assessee on 27/01/10 found that assessee admitted that the total stock purchased from 01/04/09 to 15/10/09 as per the purchase bills amounted to ₹ 43,05,800 whereas total sales made between 01/04/09 to 15/10/09 amounted to ₹ 54,54,894. AO observed, opening stock as on 01/04/2009 as per the return of income filed for the AY 2009-10 being ₹ 35,62,466, physical stock to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch. Assessee submitted that if such calculation is made there would hardly be any difference in the value as per the books of account. Assessee submitted, AO took into account the rate per unit as per bill and unit rate of MRP as per the inventory. AO arrived at the average rate of purchase at 15.97% of the MRP considering only eleven items of stock found at the time of search. To substantiate its claim that if value of the stock is worked as per the unit price mentioned in purchase invoices the total cost of stock available would be much less, assessee also furnished working as per which the total cost of stock available was worked out to ₹ 46,99,328. Ld. CIT(A) after verifying the same, was of the view that working given by assessee of the total cost of physical stock available is acceptable. He further observed that though while working out the cost of the stock sold, AO adopted the average GP rate of 17.56%, but, GP rate for the impugned assessment year as per the P L A/c was shown by assessee at 30%. Ld. CIT(A) on the basis of the aforesaid figures computed the stock available as per the books as under: Opening stock as on 31/03/2009 &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . AR submitted, right from the date of search, though, assessee has specifically stated that cost price of stock to assessee on an average is 7.5% of the MRP, but, AO has ignored such contention without any rhyme or reason and adopted the average cost price of 15.97% in a perfunctory manner. Ld. AR submitted, all purchase invoices are available indicating unitwise price which are also part of seized material, AO without referring to them has arrived at the excess undisclosed stock without any reasonable basis. Ld. AR submitted, before ld. CIT(A) assessee on the basis of purchase bills has worked out the unit-wise price of each item purchased by assessee and worked out the actual physical stock at ₹ 46,99,328 and ld. CIT(A) after verifying the same, having found them to be correct, accepted assessee s claim. In this context, ld. AR drew our attention to the working submitted before ld. CIT(A) as contained in the paper book. Thus, ld. AR submitted, since the conclusion drawn by ld. CIT(A) is on the basis of materials available on record, there is no need to disturb the same. As far as adoption of GP rate at 30% is concerned, ld. AR submitted since assessee has declared the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok, as it appears, assessee has arrived at the actual physical stock on the basis of the purchase invoices. However, since the said working was not furnished before AO and was for the first time furnished before ld. CIT(A), for affording fair opportunity to the department, we are inclined to remit the matter back to the file of AO to verify assessee s claim of actual cost price of physical stock available on the date of search on the basis of these workings vis- -vis the purchase invoices, which are part of the seized material and thereafter make addition, if any, on account of excess stock. As far as adoption of GP rate is concerned, we are of the view that if in the impugned AY assessee has shown a GP of 30%, then, the same has to be applied for working out the value of stock. With the aforesaid observations, the matter is remitted back to the file of the AO for necessary verification and deciding the issue after due opportunity of being heard to assessee. 9. The next issue as raised in ground Nos. 6 7 are in respect direction of ld. CIT(A) in deleting the addition of ₹ 37,70,150 being unexplained cash found at the time of search. 10. Briefly the facts relating to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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