Tribunal confirms undisclosed income, rejects unsupported expenditure appeal

The Tribunal upheld the ld. Commissioner of Income-tax (Appeals)-Durgapur's decision in cross appeals filed by the Department and the assessee. Regarding undisclosed sales, the Tribunal confirmed 25% of unaccounted sales as the assessee's undisclosed income, deleting the remaining amount. For unsupported expenditure on subscription and donation, the Tribunal relied on a High Court decision and rejected the Department's appeal. Both appeals were dismissed, affirming the orders of the ld. Commissioner of Income-tax (Appeals)-Durgapur.

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Issues involved: Cross appeals filed by Department and assessee against order of ld. Commissioner of Income-tax (Appeals)-Durgapur regarding addition of undisclosed sales and unsupported expenditure claimed on account of subscription and donation.

Issue 1 - Undisclosed Sales:
The assessee was engaged in trading machinery items and made sales outside books of accounts. Assessing Officer treated the sales as income, as all business-related expenditure was already debited. Ld. CIT(A) confirmed undisclosed sales but considered 25% of unaccounted sales as assessee's undisclosed income, deleting the balance amount. Assessee argued that 25% profit estimation was excessive, citing past results. Department supported CIT(A)'s decision. Tribunal upheld CIT(A)'s order, noting unaccounted sales and reasonable profit estimation without separate addition for initial investments.

Issue 2 - Unsupported Expenditure:
Department disputed &8377; 9,522 claimed by assessee for subscription and donation. Tribunal referred to the necessity of contributions for local festivals as per Hon'ble Kolkata High Court's decision in CIT vs. Bata India Limited. Following the High Court's ruling, Tribunal rejected Department's appeal on this ground.

The appeals of both the Department and the assessee were dismissed, with the Tribunal upholding the orders of the ld. Commissioner of Income-tax (Appeals)-Durgapur.

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