9911796707
TMI Blog2007 (1) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The said assessments were set aside by the Commissioner of Income-tax under section 263 of the Act with a direction to consider the entire cash credits appearing in the books of account as undisclosed income of the assessee under section 68 of the Act. On appeal, the Tribunal directed the Assessing Officer to make a thorough investigation and arrive at the undisclosed income after considering the growth of wealth. Afterwards, considering the credits in the books of account, the Assessing Officer determined the total income for the assessment years 1981-82 and 1984-85 at Rs. 2,41,020 and Rs. 8,02,320 respectively. When the assessee was required to prove the genuinene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he additional income offered for assessments or determined finally and other relevant circumstances, the Commissioner of Income-tax (Appeals) deleted the entire addition of Rs. 5,08,081. On appeals, at the instance of the Revenue, the Tribunal held that the assessee had introduced the suppressed sales (Rs. 20,000 being the expenditure on the first purchase for the assessment year 1981-82 and gross profit of Rs. 1,60,000 for the assessment year 1984-85) in the regular books of account as cash credit which means that the funds introduced as credits in the books had gone into the assessee's business account and so the same could not have been utilised for making the unaccounted purchases and the assessee could not be given credit for any amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The assessee also, by letter dated September 24, 1990, admitted that the credits were nothing but the suppressed sales. The Assessing Officer estimated the gross profit on the suppressed sales and made additions. The Assessing Officer, while estimating the gross profit, considered the difference as cost of purchases and since the source for the unaccounted purchases remained unexplained, the Assessing Officer made additions under section 69C of the Act. Before proceeding further, it would be apposite to refer to section 69C of the Act which reads as follows: "69C. Unexplained expenditure, etc.-Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly suppressed sales and such sales had come from undisclosed purchases, found that the expenditure on the unaccounted purchases could be Rs. 20,000 for the assessment year 1981-82 on the basis that with the first purchase making use of Rs. 20,000 the assessee could have made some sales and then, the sale proceeds could be utilised for the subsequent purchases and thus, funds could be rolled over for the purchases totalling Rs. 1,66,825. For the assessment year 1984-85, the Commissioner of Income-tax (Appeals) found that there was a separate addition of Rs. 1,60,000 representing the gross profit which could be rolled over for the purchases. On that basis, the Commissioner of Income-tax (Appeals) made an addition of Rs. 20,000 for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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