TaxTMI 
TaxTMI 
2013 (11) TMI 315
X X X X Extracts X X X X
X X X X Extracts X X X X
....income of the assessee as held by the Assessing Officer. 3. The CIT(A) ought to have considered the fact that the assessee himself has admitted that the credits appearing in bank accounts of Rs.2,94,44,341/- were not on account of sales but deposited/credited at the behest of M/s. Sigma Online Ltd. 4. The CIT(A) erred in directing the Assessing Officer to estimate profit at 4% on unaccounted sales while assessee himself has admitted the rate of 4.38% on the profit for the assessment year 2001-02. 5. Any other grounds that may be arise at the time of hearing." 2. The facts The facts leading to the appeal are as under: The Assessee is carrying on sale of computers and peripherals under two proprietary concerns viz., M/s Kishan Trading Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h Mr. Mohan's silence on this point, assuming but not conceding that Mr. Kishan's sales to SOL are only those represented by type 1 bills, the remaining turnover of the assessee's concerns is computed as under, after taking into account the turnover already accounted in the books. Total credits in 1658, Indian Bank : Rs. 1,96,55,563 Less sales of J. K. International as per type 2 bills attributed to SOL : Rs. 82,24,950 Total : Rs. 1,14,30,613 2.3.10. Keeping in view the assessee's statement on 1.3.2002 to the effect that the credits in these a/c are undisclosed it is concluded that this amount of Rs.1,14,30,613 represents undisclosed sales/turnover in the case of J. K. International. 2.3.11. In the case of Kishan Trading Company it is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ever, it is noted that Mr. Kishan has stated, on the day of search, that the sales made to SOL amounted to about only Rs.40 lacs and the rest were only accommodation entries and subsequently on 1- 3-2002, in his statement, he agreed that the credits in his bank accounts represent his turnover and accordingly, he filed his Return on 22-7-2002. But later, in his reply submitted in the assessment proceedings and during his sworn statement on 25-2-2004, he maintained that the credits were not on account of sales but at the behest of SOL/Mr. Mohan. Finally on 27- 2-2004, Mr. Mohan produced Mr. Kishan and Mr. Kishan submitted a letter stating that the sales in question were genuine. In view of the changing stance of Mr. Kishan. without prejudice ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....computing the unaccounted sales in the hands of the appellant. However, it is also a fact that the Assessing Officer has deducted both the sales i.e., sales on type-1 bills as well as type-2 bills in case of both the proprietary concerns from the credits into bank accounts, in arriving at the amount of Rs.1,54,63,228/- as unaccounted sales, (vide para 2.3.9 to 2.3.13 of assessment order) for the purpose of calculating the unaccounted profit on such turnovers at the rate of 4.38%. This means while quantifying the credits into the bank account, the Assessing Officer has consciously taken out the sales on type-2 & type-1 bills in the case of M/s. Kishan Trading Co. And type 2 bills in case of M/s. JK International and the total sales on type-2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e profit on such sales. 8.5 In this case itself (para 6.3), it was ascertained that there were unaccounted sales quantified by the assessing officer (Rs. 2,09,66,145) on which the profits were estimated at 4.38% by the assessing officer based on the fact that similar profits were available to the appellant on the sales effected through the regular books of account. It is also a fact that the profit on the unaccounted sales was ascertained at 4% on estimation basis, based on the margins available in such trade. Keeping the undecided nature of the sales made to M/s. SOL group i.e. whether they represent the actual sales or accommodation sales, in mind, it may be reasonable to estimate the profits on such sales to ascertain the real income to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ver to Mr. Mohan of M/s. SOL. Finally he had added this amount as a protective measure. On appeal the CIT(A) had in fact treated the "Type 2" accommodation sales on par with the actual undisclosed sales as reflected by "Type 1" sales, which has been accepted by the Assessee, and added the profit at 4% on the "Type 2" sales of Rs. 2,94,44,341/-. 7. The revenue is contesting the same. According to them, as the Assessee himself has not denied the transaction the addition of the entire amount of Rs. 2,94,44,341/- made by the Assessing Officer should be confirmed. In the course of appeal proceedings, the order of the ITAT in ITA No. 96,97,101 and 56/Hyd/05 dated 29.5.2009. in the case of Shri. J.V.Mohan, M/s. SOL and others were produced. In th....