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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 ..... ry information, we hold that the amount of suppressed sale stands at ₹ 6,40,52,547/- which contains the amount of gross profit of the assessee not offered to tax. Be that as it may be, the income of the assessee cannot exceed the amount of cash found during the course of search by the excise department. It is for the reason that the maximum amount which was found unaccounted can only be brought to tax until and unless there is any other material found during the search suggesting that there was any other income other than the income embedded in the suppressed sales. Furthermore, the revenue has not brought any material on record suggesting that the assessee has made suppressed sales over and above the amount determined by the excise department. Thus in the absence of any information available on record, we hold that the AO has wrongly determined the gross profit by working out the suppressed sale more than the amount determined by the excise department. Thus the appeal filed by the revenue is hereby dismissed and the CO filed by the assessee is allowed. - ITA No. 288/AHD/2016 With C.O.No.45/Ahd/2016 - - - Dated:- 8-4-2022 - Shri Waseem Ahmed, Accountant Member And M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department subsequently has worked out the suppressed sale of the assessee for different assessment years detailed as under: Assessment year Suppressed sale 2007-08 ₹ 23,89,773/- 2008-09 ₹ 29,54,506/- 2009-10 ₹ 1,81,82,422/- 2010-11 ₹ 1,84,74,022/- 2011-12 ₹ 2,20,51,824/- Total ₹ 6,40,52,547/- 4.1 The assessee as a result of Excise Department search has admitted to have generated and undisclosed income to the tune of ₹ 2,28,24,780/-, equal to the amount of cash found during the search of the Excise Department. The assessee has offered the impugned income in the manner as detailed below: Assessment Year Sales Income based on Relevant year GP ratio 2007-08 23,89,773/- 1,15,000/- 2008-09 29,54,506/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed 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 ₹ 2,20,51,824/-. The appellant has disclosed net j profit at ₹ 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 appellant had already claimed such expenses in the profit and loss account and there was no evidence for incurring any additional expenses. Accordingly, he has applied a gross profit rate to 25% on the sales relying upon the decision of Hon'ble ITAT in the case of Vijay Proteins Ltd. vs. ACIT 58 ITD 428 (Ahd.). I find that the appellant has failed to furnish any documentary evidences to prove that any additional expenses have been incurred for generating the unaccounted turnover. It could not also controverted the detailed findings of the Assessing Officer. It is also worthwhile to mention that the appellant must have also evad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome offered by it additionally in the' Return of Income to the extent of ₹ 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 ₹ 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 higher gross profit and hence there was no evidence of accumulation of such profit in the form of cash till the year under consideration. Moreover, this claim of the appellant if accepted, will result in furnishing of inaccurate particulars of income liable for penalty u/s. 271(l)(c) in view of Explanation-2, In view of these facts and also the legal position, the claim of the appellant in this regard is rejected and accordingly additional ground raised is also dismissed. 6. Being aggrieved by the order of the learned CIT(A) both the revenue and the assessee are in appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ₹ 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 physical cash found by the excise department during the course of search amounting to ₹ 2,28,24,780/- which was admitted by the assessee before the income tax Department as income from undisclosed sources. However, the excise department subsequently calculated the suppressed sales. Accordingly the assessee based on the suppressed sales has calculated the amount of profit representing the GP embedded in such unaccounted sales pertaining to different years. However, the AO has adopted the GP at the rate of 25% for making the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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