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Tribunal upholds re-assessment, adds unrecorded profits, restricts expenses disallowance, and partially allows appeals. The Tribunal dismissed the challenge to the initiation of re-assessment proceedings and upheld the addition of unrecorded profits from transactions in the ...
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The Tribunal dismissed the challenge to the initiation of re-assessment proceedings and upheld the addition of unrecorded profits from transactions in the Paddy Basmati account. However, the Tribunal directed the deletion of the addition made for profits from transactions not offered for taxation. The disallowance of expenses was restricted to 20% by the Tribunal. The judgment was delivered by the Appellate Tribunal ITAT Pune, partly allowing the appeals on 12th July, 2023.
Issues involved: The judgment involves issues related to re-assessment proceedings, addition of unrecorded profits from transactions, disallowance of expenses, and computation of profits from transactions not offered for taxation.
Re-assessment proceedings: The first ground challenging the initiation of re-assessment proceedings was not pressed by the assessee's representative and was dismissed by the Tribunal.
Addition of unrecorded profits from transactions: The Tribunal upheld the addition of Rs. 3,47,760/- made by the Assessing Officer (AO) in the Paddy Basmati account as the transactions were not properly recorded in the books of account for the relevant assessment year, and the assessee failed to substantiate the claim that the profit was recorded in the subsequent year.
Computation of profits from transactions not offered for taxation: The Tribunal directed the deletion of the addition of Rs. 1,35,840/- made by the AO as there was confusion in considering separate dates of transactions as distinct transactions, and the unrecorded profit was not adequately verified.
Disallowance of expenses: The Tribunal allowed relief to the assessee by restricting the disallowance of expenses to 20% towards personal elements and unverified expenses, as the assessee was engaged in business activities and required to incur necessary day-to-day expenses.
Separate Judgment: The judgment was delivered by Shri R.S. Syal, Vice President, and Shri S.S. Viswanethra Ravi, Judicial Member of the Appellate Tribunal ITAT Pune. The appeals were partly allowed, and the order was pronounced in the Open Court on 12th July, 2023.
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