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TMI Blog2015 (8) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, 1961 (hereinafter referred to as the "Act") for the assessment years 2005-06 and 2006-07 vide his separate orders both dated December 15, 2010. 2. The only common issue in these two appeals of the assessee is against the orders of the Commissioner of Income-tax (Appeals) confirming the action of the Assessing Officer making addition of unexplained investment under section 69 of the Act on account of undisclosed purchases and profit thereon at Rs. 16,66,292 as purchases and profit of Rs. 2,35,016 and undisclosed purchases of Rs. 6,42,767 and profit thereon at Rs. 40,361 for the assessment years 2005-06 and 2006-07 respectively. For this, the assessee has raised common ground and facts and circumstances are exactly identic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961. 6. That the learned Commissioner of Income-tax (Appeals) was wrong in coming to the conclusion that entire value of undisclosed purchase and assumed profit element included thereon were unexplained." 3. Briefly stated the facts are that the assessee is a trader in Indian made foreign liquor (IMFL). The assessee in its trading account debited purchases for an amount of Rs. 78,32,073. The Assessing Officer during the course of assessment proceedings noticed from tax collection at source (TCS) certificates that purchases made by the assessee are at Rs. 93,38,984. Accordingly, net purchases stood at Rs. 92,63,349. According to the Assessing Officer, there is a difference of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,31,186 i.e., Rs. 92,63,259 profit will be diminish of loss. There is no law by which undisclosed purchase is to be added to profit. It is against accounting principles. It cannot be said that all purchases are profit. Some percentage of purchase is profit. It is wise for the sake of Revenue and for the end of justice to determine 5 per cent. profit on purchases under section 44AF. Therefore estimated income of undisclosed purchases as you alleged Rs. 14,31,186 Ã- 5 per cent. = 71,559 is to be added to income." Accordingly, the difference as not reconciled or not explained by the assessee, the Assessing Officer added back Rs. 14,31,186 and also estimated profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a chartered accountant. In the Form No. 3CD it has been stated that the books of account maintained were cash book, ledger, stock register etc. In other words all the regular books of account were maintained. Therefore the fact that a part of purchase was not shown in the books of account especially in stock register also indicate that the related sales was also not accounted for. In fact a part of purchase and sales was completely out of the books of account. In absence of production of any evidence regarding the unaccounted purchase, in fact by giving a false statement during appellate proceedings that no books of account are maintained, the appellant has clearly failed to discharge the onus cast upon him as per section 69 of the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference exists as per TCS certificate issued by Government of West Bengal being purchases made of Indian made foreign liquor. He only admitted that this can be a posting error. 5. On the other hand, the learned senior Departmental representative Shri Aloke Nag relied on the order of the Assessing Officer as well as that of Commissioner of Income-tax (Appeals). He stated that even now the assessee could not explain or could not reconcile the difference between the purchases recorded in the trading account or disclosed in the return of income and purchases as per TCS certificate, rather the assessee's counsel admitted even now that there is a difference. 6. We have heard rival submissions and gone through facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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