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TMI Blog2023 (2) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ical purpose. Sales made out of books - A.R. submitted that when the purchases were fully accepted during the survey the sale cannot be doubted. In fact, sales are higher than the loose papers and in that respect correct Gross Profit should have been taken into account - HELD THAT:- From the perusal of records and the reconciliation filed by the assessee the CIT(A) has not taken the cognizance of the same, hence this issue also needs verification. Therefore, we remand back this issue to the file of the Assessing Officer for proper adjudication after taking into account all the evidences as well as reconciliation statement filed by the assessee and decide accordingly. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Thus, Ground No. 2 is partly allowed for statistical purpose. Addition on account of debit of cash discount pertaining to prior period - A.R. submitted that the CIT(A) as well as the AO ignore this fact that said claim crystallized during the year only - HELD THAT:- It is pertinent to note that the debit of cash discount pertaining to prior period has been crystallized during the year only and not prior or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mehta Kantilal Nandlal - A.R. submitted that the assessee has already filed confirmation related to the same and also filed repayment details - HELD THAT:- As perused all the relevant material available on record. The assessee has also filed confirmation of the parties and also filed the repayment in respect of these credits of Rs. 80,000/- and the same was not taking into account by the Assessing Officer as well as CIT(A) while confirming the addition. Hence, Ground No. 1 is allowed. Understatement of Net Profit without finding any defect in the books - HELD THAT:- It is pertinent to note that in similar type of addition in another group case involved relating to survey of the same date the Tribunal has deleted the similar addition - Besides these books of accounts were never rejected by the Assessing Officer and the requisite trading account up to the date of survey was also before the Assessing Officer, therefore, the CIT(A) as well as Assessing Officer was right in making this addition. Hence, the Ground No. 2 is allowed. - I.T.A. No.1293/Ahd/2016 I.T.A. No. 1294/Ahd/2016 I.T.A. No. 1296/Ahd/2016 - - - Dated:- 20-1-2023 - MS. SUCHITRA KAMBLE , JUDICIAL MEMBER SHRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks of accounts and stock as per physical inventory taken by the surveyor. However, the assessee firm did not give effect of such stock difference in its books of accounts. The assessee was show-caused in respect of the same treating the same amount as unexplained investment. The assessee filed the submissions which was taken into account by the Assessing Officer and thereafter addition of Rs. 1,48,29,750/- was made under Section 69 of the Act. The Assessing Officer further made addition of Rs. 21,30,687/- towards difference in sales comprising Gross Profit of Rs. 19,815/- and unaccounted purchases of Rs. 21,10,872/- as undisclosed income. The Assessing Officer further made disallowance of Rs. 17,895/- in respect of employees contribution under Section 36(1)(va) of the Act. The Assessing Officer also made disallowance on account of prior period expenses to the extent of Rs. 24,658/-. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. A.R. submitted that Ground No. 3 is not pressed as the same is decided by the Jurisdictional High Court against the assessee. Hence, the Ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the survey the sale cannot be doubted. In fact, sales are higher than the loose papers and in that respect correct Gross Profit should have been taken into account. 10. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 11. We have heard both the parties and perused all the relevant material available on record. From the perusal of records and the reconciliation filed by the assessee the CIT(A) has not taken the cognizance of the same, hence this issue also needs verification. Therefore, we remand back this issue to the file of the Assessing Officer for proper adjudication after taking into account all the evidences as well as reconciliation statement filed by the assessee and decide accordingly. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Thus, Ground No. 2 is partly allowed for statistical purpose. 12. As regards Ground No. 4 relating to addition of Rs. 24,658/- on account of debit of cash discount pertaining to prior period, the Ld. A.R. submitted that the CIT(A) as well as the Assessing Officer ignore this fact that said claim crystallized during the year only. 13. The Ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % for the year under consideration. Therefore, the closing stock value shown in trading account was not taken into account by the Assessing Officer and addition of Rs. 1,08,61,770/- was made separately on issue of inflation of purchases and same telescoped with Gross Profit addition. The Assessing Officer further made addition of Rs. 1,40,72,777/- in respect of G.P. addition at 2.19%. The Assessing Officer also made addition of Rs. 2,19,21,960/- towards addition account of unexplained credit/sales and addition of Rs. 1,09,60,980/- towards unaccounted sales. The Assessing Officer also made addition of Rs. 77,86,000/- towards disclosed amount during survey. 18. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 19. As regards Ground Nos. 1 2, the Ld. A.R. submitted that the Assessing Officer has taken into account assessment of profit and rejected the books of account without giving any cogent reason. The Ld. A.R. submitted that at one particular juncture the Assessing Officer is accepting the sales and the other elements of trading from the books of accounts and at the very next threshold reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cash and there was no supporting evidence provided by the assessee and therefore, only 50% of the same was added by the Assessing Officer. 24. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has given the details of purchase and the subsequent sales in entirety and the evidences placed before the Assessing Officer was not taken into account by both the authorities. Therefore, this issue needs verification and we remand back this issue to the file of the Assessing Officer for proper adjudication. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Ground No. 3 is partly allowed for statistical purpose. 25. As regards Ground No. 4 relating to addition of Rs. 77,86,000/- on account of alleged discrepancy in stock found on the date of survey on the basis of statement of director. The Ld. A.R. submitted that this addition was contrary on the basis of statement and no proper adjudication was made by the assessee. The difference in stock has been explained and there was no discrepancy in the stock. 26. The Ld. D.R. relied upon the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 68 for unexplained credit in the name of Mehta Kantilal Nandlal. The Ld. A.R. submitted that the assessee has already filed confirmation related to the same and also filed repayment details. Both these evidences were not taking into account in the Assessing Officer as well as CIT(A). 34. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 35. We have heard both the parties and perused all the relevant material available on record. The assessee has also filed confirmation of the parties and also filed the repayment in respect of these credits of Rs. 80,000/- and the same was not taking into account by the Assessing Officer as well as CIT(A) while confirming the addition. Hence, Ground No. 1 is allowed. 36. As regards Ground No. 2 relating to addition of Rs. 15,00,000/- on account of understatement of Net Profit without finding any defect in the books, the Ld. A.R. submitted that the books were never rejected and the assessee has given all the details before the Assessing Officer as well as before the CIT(A). The Ld. A.R. submitted that the assessee incurred loss during the period prior to survey and working and reconciliation of Gross Profit as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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