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TMI Blog2021 (10) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue urged in all the 3 years relates to the relief granted by Ld. CIT(A) in respect of addition relating to suppressed sales. 4. In the appeal of the assessee, the assessee is challenging following issues:- a) Validity of re-opening of assessment in assessment years 2010-11 & 2011-12. b) Addition sustained by Ld. CIT(A) in respect of suppressed turnover in all the three years. c) Addition of sundry creditors in all the three years. d) Addition of prior period expenditure in Assessment year 2010-11. 5. The facts relating to the case are stated in brief. The assessee is engaged in the business of manufacture and sale of steel by running a mini steel plant. The assessee is converting metal scraps into steel billets. The assessee bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndry creditors Amount 2010-11 2,05,12,678 2011-12 3,62,602 2015-16 43,01,897 7. The A.O. also noticed that the assessee has debited a sum of Rs. 5 lakhs and Rs. 5,50,000/- respectively in the years relevant to the assessment years 2010-11 & 2015-16 as "prior period expenses". Since the assessee did not furnish the details there of, the A.O. held that the prior period expenditure is not allowable as deduction and accordingly disallowed the claim. 8. In the appellate proceedings, the Ld. CIT(A) noticed that Shri Alok Gupta has stated in his statement that there is unaccounted sales as well as unaccounted purchases. Accordingly, the Ld. CIT(A) directed the A.O. to restrict the disallowance to gross profit margin on the suppressed sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson who is found to in possession or control of any books of accounts, documents etc. There is no dispute that Shri Alok Gupta was in possession or control of the affairs of the assessee company during the course of search and hence statement was taken from him. The Ld. D.R. submitted that even though the assessee company came to be acquired by OPG group in 2012, yet Shri Alok Gupta did not mention in the statement that he was not aware of details of transactions prior to its acquisition in 2012. In fact, he has revealed the trend prevailing in their group, including that of the assessee company. Further, the statement so given has not been retracted by the assessee till date. He submitted that as per the provisions of sec. 132(4) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed earlier that Shri Alok Gupta has stated in the sworn statement that the suppressed sales will be in the range of 5% to 10% of the declared turnover. Accordingly, the AO added 10% of the declared turnover as income of the assessee in all the three years under consideration. The Ld. CIT(A) noticed that the suppression has taken place both from sales and the corresponding expenditure. Accordingly, the Ld. CIT(A) has taken the view that only gross profit margin should be applied on the suppressed sales. Both the parties are aggrieved. 14. We heard the parties and perused the record. The addition on account of suppression of sales has been made in all the three years on the basis of statement taken from Shri Alok Gupta, more particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted sale is used for unaccounted cash purchase. I request you a weeks time for me quantify the unaccounted income earned by way of unaccounted sales. Sir, I also submit that in M/s. APS Steels Ltd. due the burst of the transformer the business was shut down for the past six months. The net actual incomes received by me out of the normal books of Accounts are being used by me for personal expenses of the family". A perusal of answer given to question No. 25 would show that the assessee has admitted that there is suppression of expenditure due to business exigencies, which included unaccounted purchase of raw materials. Hence there is suppression of both purchases and sales. Accordingly, the Ld. CIT(A) has taken the view that, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... els. He further submitted that the AO, having accepted the purchases, could not have disbelieved the sundry creditors. Accordingly, the Ld. A.R. submitted that the addition of sundry creditors balance in all the three years is liable to be deleted. 18. On the contrary, the Ld. D.R. submitted that the assessee has failed to furnish the details relating to Sundry creditors called for by the AO and hence he has made the addition. He submitted that the assessee has not furnished the details till date. 19. We heard the parties on this issue and perused the record. The Ld. A.R. has submitted that the sundry creditors balance represents trade creditors and all the creditors have running account. He also contended that the AO could not have disbe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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