TaxTMI 
TaxTMI 
2014 (10) TMI 180
X X X X Extracts X X X X
X X X X Extracts X X X X
....sales to M/s Kamlesh & Co. holding that "g.p. at the rate of 19% of Rs. 26,72,275/- on account of these sales is treated as having been invested in stock which was found and surrendered during the next year. 3. deleting the addition of Rs. 91,84,116/- made by the A.O. on account of the entries appearing on Approval Memo Annexure-23 (Pages 101 to 142 impounded during the course of survey u/s 133a, holding that the gross profit alone should be worked out for the purpose of taxation. 4. giving a direction to allow set off of the income worked out on the basis of gross profit out of the unrecorded sales to M/s Kamlesh & Co. and unrecorded sales of goods reflected on Approval Memos Sl. No. 101 to 142 (Annexure-23) against the income already taxed in the case of M/s Bihari lal Hola Ram in A.Y. 2006-07 despite the following facts which are apparent from the order of the CIT(A). a) The combined unrecorded sales aggregates to Rs. 2,32,48,720/-. Gross profit out of such unrecorded sales worked out by the learned CIT(A) comes to Rs. 44,17,257/-. Thus, excluding the gross profit so worked out, the net unexplained investment available with the assessee comes Rs. 1,88,31,463/- whereas t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ide letter dated 16/12/2010. After considering the assessee's reply, it has been held by the learned Assessing Officer that these transactions on these papers represent approval memos of goods sent to show room for exhibition or marketing to other places. These approval memos were prepared for carrying goods to other places. The goods so given on approval memos are returned back and if some goods were sold, sale invoices were issued separately, which are forming part of regular books of account of the firm, which was not found tenable to the Assessing Officer on the ground that these are bond approval memos representing goods removed from business premises. The assessee had not submitted any documentary evidence to prove that goods so given on approval memos were entered in regular books of account or when it was received back and when it was sold. The appellant did not mention anything regarding date of exhibition, place of exhibition, manner of exhibition and expense incurred in this regard to prove that the goods were removed from show room for displaying in the exhibition. So the learned Assessing Officer found this submission after thought. He treated this stock lying outside ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s Kamlesh & Co.. The g.p. at the rate of 19% of Rs. 26,72,275/- on account of these sales is treated as having been invested in stock which was found and surrendered during the next year. This finding is further reiterated by the fact that no evidence was found during the survey or subsequently during the assessment proceedings, that these sale proceeds had been diverted for personal consumption or any other capital investment by the partners of the assessee firm. Therefore, the impugned addition of Rs. 1,40,64,604/- made by the A.O. is deleted. 5.3 I have perused the order of the A.O., submissions of the A.R. and the assessment record. In the paper book from page 47 to 87 the AR has filed details of goods sent on approval or taken for approval and brought back by the partner or staff. The dates of sending these items for approval are from 07/5/2004 to 17/2/2005 while the date of survey is 18/8/2005. The assessee was not maintaining any stock register so it is not possible to verify the amount of goods brought back by the partner as claimed of Rs. 45,85,804/- or sold to other parties of Rs. 45,98,311/-. However, there does appear to be some rational in the submission of the AR ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s maintained by the staff in which transactions were recorded for various receipts and payments. Considering that this cash book pertained to M/s Khushboo Jewellers and the entries have been verified from its regular books of account for A.Y. 2005-06 during assessment proceedings there is no justification in making any addition to the income of the appellant on the basis of this Annexure. Therefore, the impugned addition of Rs. 1,48,039/- is deleted." 4. Now the Revenue is in appeal before us. 5. The learned D.R. supported the order of the Assessing Officer and argued that whatever evidence found during the course of survey U/s 133A of the Act, which was later on impounded, had not been considered by the learned Assessing Officer in original order dated 28/12/2007. Therefore, the same may be confirmed. 6. At the outset, the learned AR for the assessee submitted that the original assessment was completed U/s 143(3) of the Act on 28/12/2007 i.e. after the date of survey. The original assessment proceedings, the assessee vide letter dated 07/12/2007 explained each annexure impounded in survey from the premises of the assessee and M/s Khushboo Jewellers. Thereafter, the Assess....