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TMI Blog2022 (4) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the facts discussed in the assessment order, wherein the A.O. rightly worked out the undisclosed sales applying GP rate of 10.32% on the cash seized & thereafter worked out the GP rate of @25% on the said bogus/ suppressed sales 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition by holding that the action of the Assessing Officer is without any basis, without appreciating that there was no double standard adopted by the A., since . extrapolation of turnover from declared other income had to be based on the assessee's adopted GP rate as it is just a reverse calculation any deleting the addition of Rs. 2,17,28,079/- Relief claimed in appeal The order of the CIT9A) on the issues raised in the aforesaid Grounds be set aside and that of the Assessing Officer be restored. 3. The only issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition made by the AO for Rs. 2,17,28,079/- on account of profit on the suppressed sale. 4. The facts in brief are that the assessee in the present case is a private limited company and engaged in the business of manufacturing and trading of chem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales and determined the gross profit at Rs. 3,70,02,859/- being 25% of the sales of Rs. 14,80,11,434/-. The AO subsequently has added the sum of Rs. 2,17,28,079/- (Rs. 3,70,02,859 - Rs. 1,52,74,780) being the difference in the amount of gross profit and the amount already disclosed by the assessee to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to the learned CIT-A who has party confirmed the order of the AO by observing as under: 4.1. In the present appellate proceedings, the appellant vide Ground No. 2 has requested to accept the income as disclosed in the Return of Income since the total undisclosed income of all the years cannot exceed the amount of cash found and seized by the Central Excise Department. I find that the Assessing Officer has accepted unaccounted sale of the assessment year under consideration as determined by the Central Excise Department at Rs. 2,20,51,824/-. The appellant has disclosed net j profit at Rs. 22,75,000/- on the suppressed sales @ 10.32%. However, the j Assessing Officer was of the view that on the suppressed sales, various direct and indirect expenses were not required to be incurred separately since the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. In view of these facts, the action of the Assessing Officer is without any basis and against all the principles of justice and hence the addition on this account is directed to_be deleted. Accordingly the appellant succeeds partly in respect of Ground No.2. 4.2. Now coming to the additional ground, wherein the appellant has claimed telescoping of the additions made in A.Yrs. 2007-08 to 2010-11 amounting to Rs. 52,25,181/- with the income offered/assessed in the year j under consideration. In this regard, I find that the appellant has already/ been allowed telescoping of the income offered by it additionally in the' Return of Income to the extent of Rs. 52,75,000/- since the same had already been deducted from the amount of total cash found while computing! the undisclosed income of the year under consideration. Vide additional ground raised in the present proceedings, the appellant has claimed telescoping credit for the additions made in A.Yrs. 2007-08 to 2010-11 amounting to Rs. 52,25,181/-_ by applying higher gross profit rate at 25% on the undisclosed sales. This claim of the appellant is not acceptable because these additions were made by notionally estimating the hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. The learned AR before us filed a paper book running from pages 1 to 221 and contended that the addition in either of the case cannot exceeds the amount of cash found during the course of search by the excise department. Furthermore, the excise department has calculated the amount of suppressed sale at Rs. 6,40,52,547/- which was pertaining to the different assessment years. On such suppressed sale, the assessee has already admitted to have offered the amount of gross profit on such sales. However there was the shortfall in the amount of income determined based on the suppressed sale and the income admitted by the assessee before the income tax Department leading to an amount of Rs. 1,52,74,780 which was rightly treated by the assessee as income from other sources. 9. Both the learned DR and the AR before us vehemently supported the order of the authorities below as favourable to them. 10. We have heard the rival contentions of both the parties and perused the materials available on record. The basis of making the addition on account of undisclosed income of the assessee was the cash found during the course of search proceedings by the excise department. There was the physic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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