TaxTMI 
TaxTMI 
2007 (11) TMI 347
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.... the learned CIT(A) has erred in: (i) Directing the AO to make addition only of profit element i.e., 10.5 per cent GP involved in the sales of Rs. 3,11,893 instead of addition of Rs. 3,11,893, made by the AO on account of shortage of stock treating it as unaccounted sales for the period 1st April, 1999 till the date of search where purchases and expenses were fully accounted for in the books and debited to the trading account. (ii) Directing the AO to adopt the undisclosed sales at Rs. 41,35,040 only, instead of Rs. 2,29,50,883 estimated by the AO, and to apply to 10.5 per cent GP rate and thereby granting a relief of Rs. 23,04,315, whereas the AO had rightly estimated the undisclosed sales in case of such a line of business for the e....
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....ted materials was prepared and was compared with the stock available in the books of accounts. The stock on physical verification was found at Rs. 23,25,118 whereas the stock as per books of accounts on the date of search was found at Rs. 29,13,511, which resulted into shortage of stock of Rs. 5,88,393. The assessee, however, reconciled and after adjusting calculation mistakes in the working of the stock, which were also accepted by the AO. Finally stock shortage was reduced to Rs. 3,11,893. This shortage of stock was taken as unaccounted sales for the period 1st April, 1999 till the date of search because according to the AO since the purchases and expenses were duly accounted for and debited to the trading account the entire amount of sho....
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.... error in the finding of the learned CIT(A) in this regard. Hence, we dismiss ground No. (i) of Revenue's appeal. 8. The facts of ground No. (ii) are that during the course of search, various documents in the form of diaries and loose papers relating to the details to the trade of Rasgullas were found and seized. When the assessee was asked to explain the nature of the transactions recorded in these incriminating documents it was accepted that all these documents were related to the trade of Rasgullas, which was not accounted for in the regular books of accounts. The assessee also filed a detailed working of the unaccounted sales, which included details of sales and purchases. According to this working, the total unaccounted sales of Ras....
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....----------------------- 93-94 52,75,377 14,77,105 1,55,096 ------------------------------------------------------- 94-95 64,45,683 18,04,791 1,89,503 ------------------------------------------------------- 95-96 93,65,540 26,22,351 2,75,347 ------------------------------------------------------- 96-97 1,02,72,021 28,76,166 &nb....
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....rtment is aggrieved. 9. We have heard rival submissions and have perused the available materials on record carefully. 10. After hearing both sides in the light of the available materials on record, we are convinced that except the working adopted by the learned AO there is no other evidence to justify an enhancement in sales of the entire block period. The learned senior Departmental Representative has tried to find out fault with the working as given to the learned AO and a copy of which is placed at APB 19. But this argument cannot be accepted in the light of the fact that the learned AO has himself accepted this working and has clearly mentioned in page No. 5 para 2 of his order that the unaccounted sales as per the seized document....
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....58BC has to be examined with reference to the material available in possession of the AO and the income cannot be estimated de hors any material found during the course of operation. The Hon'ble High Court has laid down the above law for while deciding the case of CIT vs. Rajendra Prasad Gupta (2001) 166 CTR (Raj) 88 : (2001) 248 ITR 850 (Raj). This is also the consistent view of the Jodhpur Bench. As a result, we do not find any infirmity in the order of the learned CIT(A) in this regard as well. Consequently, ground No. (ii) of Revenue's appeal is also dismissed. 11. In cross-objection, the first ground is with regard to charging of interest under s. 158BFA(1) of the Act. It was pleaded by learned Authorised Representative. Shri Amit K....