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TMI Blog2016 (7) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessee and taking the remand report from Assessing Officer. As per Sec.292C of the Act the documents seized at the premises of assessee are presumed belonging to assessee only and assessee has to justify about those documents. In this case, we find that Ld. CIT(A) has duly considered the justification given by assessee and accordingly he passed a speaking order. Hence, we find no infirmity in the order of Ld. CIT(A). - Decided against revenue Unreasonable extra capital invested in the unrecorded purchase - rotation of the capital in the business - Held that:- After considering the business and rotation of capital we are of the considered view to take the rotation cycle 15 times and accordingly work out the capital embodied in the disclosed purchase for ₹ 3,60,220/- (Rs. 54,03,311 / 15 times). This ground of assessee’s CO is allowed - Decided against revenue - ITA No. 1735/Kol /2013 & C.O.110/Kol /2013 - - - Dated:- 5-7-2016 - Shri N. V. Vasudevan, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Assessee : Shri K. L. Bhawmick, Advocate For the Revenue : Shri Sallong Yaden, ACIT-SR-DR ORDER Per Waseem Ahmed, Accountant Member Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67/- c) total 1,80,258,42/- d) Balance of creditors as on 01.04.2005 ₹ 74,912/- e) Difference for the purchase of Less Rs.1,79,50,930/- f) Purchase declared in her return for Rs.1,34,84,113/- g) The short purchases reported by Rs. ₹ 44,66,817/- The AO treated the short above difference as suppression of purchase and accordingly added it to the total income of assessee. In addition to above the AO during the course of assessment proceeding observed on the basis of impounded books that assessee has sold the cement of ACC, Lafarge, Rashmi, Crescent and Konark Brand to the tune of ₹ 45,39,436/- but assessee has not shown corresponding purchase of cement of the said companies. Accordingly, AO has drawn the fresh trading account of assessee as under:- Opening stock (as per her books on 01.04.2005) Rs.68,681 Sales (as per return) Rs.1.42,60,625 Purchase (as discussed above) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference between purchase as per bank statement and books of account of assessee. Accordingly, Ld. CIT(A) has given partly relief to assessee by observing as under:- ii. So far as debits in bank account are concerned, debits of ₹ 33,97,201/- are stated to be for money given to Shri L.N.Bera and Shri Subhash Bera the assessing officer has stated that the appellant has not been able to explain purpose of such transfer of money to Shri L.N.Bera and Shri Subhash Bera. He has also observed that apart from transfer entries there were some cash withdrawals which could not be automatically linked with Shri L.N.Bera and Shri Subhash Bera. However, whether or not the appellant is able to explain purpose of money transfer to Shri L.N.Bera and Shri Subhash Bera, the fact remains that such transfers/withdrawals could not be considered as amounts utilized for purchases as these were not purpose of buying drafts or issuing cheques for purchase made from cement companies. Even otherwise, it does not appear to be logical for a businessman to utilize his regular bank account (from which his disclosed transactions are made) to make unaccounted purchases. Therefore I am of the view, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as per enquires conducted under section 133(6), as well impounded books, total purchases were amounting to ₹ 1,46,20,354/-. On the other hand, the purchases in regular books of account were of ₹ 1,34,84,113/-. Thus there were undisclosed purchases amounting to ₹ 11,36,241/- as per the impounded material. As there is no material to suggest that these also included purchase of cement of brands other than Grasim, amount of which is much higher, these are to be considered separately. In his computation, the assessing officer has taken gross profit rate of 6% on sale. Based on the same, the corresponding unaccounted sale would be about ₹ 12,08,767/-. After considering both the above amounts total unaccounted sale would be ₹ 57,48,203/-. What is required to be added to the appellant s income is the gross profit earned on the unaccounted sale and investment in unaccounted purchase. At the GP rate of 6% adopted by the assessing officer, gross profit on undisclosed sale would come to ₹ 3,44,892/-. Also, the purchase corresponding to unaccounted sale would be ₹ 54,03,311/-. In oral discussion, it was claimed that even if unaccounted transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntries from the bank as purchased after adjusting the opening and closing figures of the creditors for the year under consideration. The AO has taken the GP ratio @ 6% on the ground that the other party who is in the similar activity has declared its GP @ 6%, hence AO applied that rate. The AO has drawn the fresh trading account of the assessee after considering the unaccounted purchase, sales and applied the GP ratio @ 6% and treated the balancing figure as closing stock. Accordingly there arose difference between the figures of gross profit and closing stock with the figures declared by the assessee which was added to the total income of the assessee. However the ld. CIT(A) deleted the addition arising on account of suppressed purchases by observing that all the debit entries do not necessarily represent the purchase made by assessee. Accordingly the addition for gross profit and closing stock as determined by the AO stand deleted. However the ld. CIT(A) worked out undisclosed sale on the difference between the purchase shown by the assessee i.e. 1,34,84,113.00 and purchase figures derived as per the confirmation obtained under section 133(6) of the Act i.e. 1,46,20,354.00. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Revenue is dismissed. 10. In the result, Revenue s appeal is dismissed. Coming to assessee s CO No.110/Kol/2013. 11. Assessee has raised following grounds:- I. The Ld. CIT(A) was not justified to treat sale proceeds of cement other than Grasim(white) brand in the hands of the assessee-appellant Shyamali Bera inasmuch as dealings in cement of every other brand relate to Lakshmi Narayan Bera her husband from the same business centre; II. The presumption of acquisition of such cement by Smt. Shyamali Bera is not supported by corroborative evidence like confirmation of supplies from such suppliers or supporting vouchers; III. The nature of business carried on by both the wife and the husband is on record of both the authorities which have been disregarded by both the authorities; IV. The computation of extra capital required to effect unrecorded purchase (not admitted) is unreasonably high inasmuch as the usual number of rotations in a year is much more than four and as such the amount is liable to be modified accordingly; V. The Respondent raising the cross objections craves the leave of the Ld. Bench to add to or modify any of the objections befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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