TaxTMI 
TaxTMI 
2015 (4) TMI 371
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....lying G.P. rate of 19% on such estimated turnover as against G.P. rate of 11.87% declared by the assessee on the actual turnover of Rs. 11,89,909/- and 17% applied by the A.O. resulting into trading addition of Rs. 5,37,009/- (wrongly computed at Rs. 3,14,761/-)." Grounds of assessee's appeal being ITA No. 1005/JP/2013 (A.Y. 2004-05) "1. The learned CIT(A) has erred on facts and in law in upholding the validity of trading addition made by A.O. in assessment framed U/s 153A, dehors any incriminating material found in search or otherwise gathered by him for the year under consideration. 1.1 The learned CIT(A) has erred on facts and in law in estimating the unrecorded sales, twice the recorded sales and thus estimating the total sales at Rs. 54,88,839/- (wrongly taken at Rs. 36 lacs). She has further in applying G.P. rate of 18% on such estimated turnover as against G.P. rate of 13.23% declared by the assessee on the actual turnover of Rs. 18,29,613/- and 17.25% applied by the A.O. resulting into trading addition of Rs. 7,46,006/- (wrongly computed at Rs. 4,06,015/-)." Grounds of assessee's appeal being ITA No. 1006/JP/2013 (A.Y. 2005-06) "1. The learned CIT(A) ....
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....s as follows: Sl. No. A.Y. Gross Profit (Rs.) Total Turnover (Rs.) % age of G.P. 1. 2003-04 1,41,238/- 11,89,909/- 11.87% 2. 2004-05 2,41,985/- 18,29,613/- 13.23% 3. 2005-06 2,54,912/- 23,09,098/- 11.04% 4. 2006-07 3,22,211/- 26,27,528/- 12.26% It has been further observed that in absence of complete books of account, the closing stock of the firm is not verifiable resultantly the gross profit worked out also had no sanctity. Further during the course of assessment proceedings, the assessee furnished the details of unaccounted sales in A.Y. 2006-07 to 2009-10, which is reproduced as under:- A.Y. As per regular books of account Unaccounted sales Sales G.P. Ratio Sales G.P. Ratio 2003-04 11,89,909/- 11.87% 2004-05 18,29,613/- 13.23% 2005-06 23,09,098/- 11.04% 2006-07 26,27,528/- 12.26% 15,58,786/- 12.26% 2007-08 15,93,180/- 12.98% 49,40,182/- 12.98% 2008-09 20,56,885/- 13.00% 70,88,444/- 13.04% 2009-10 21,57,817....
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....partment. The learned Assessing Officer calculated the ratio between the sales entered in the regular books of account and unaccounted sales as per the chart given above i.e. 1:3. The assessee's claim was that during the A.Y. 2003-04 to 2005-04, there was no unaccounted sales/purchases but which was not found acceptable to the Assessing Officer on the basis of subsequent year unaccounted sale and purchase found by him and held that modus operandi of the assessee firm was not maintaining regular books of account and all the transactions regarding purchases and sales were made in cash, which was not completely entered in regular books of account. He also presumed that the assessee might have destroyed paper relating to unaccounted sales. Shir Madan Mohan Gupta and Shri Pankaj Agarwal in his statement had admitted that all the transactions of sales and purchases were not entered into the regular books of account. Further he also referred Section 114(d) of the Indian Evidence Act for interpolation of the evidence for A.Y. 2003-04 to 2005-06. On the basis of ratio of accounted sales and unaccounted sales found during the course of search in A.Y. 2006-07 to 2009-10. He calculated tot....
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....quivalent to AIR 1966 SC, 605, wherein it was observed that "Presumption can be made both backward and forward within a reasonably proximate time." The learned Assessing Officer calculated the ratio between accounted sales and at 1:3 and estimated the turnover and G.P. by relying on comparable case of M/s Rajan Fire Works. She also analysed the percentage of unrecorded sale in A.Y. 2006-07 to 2008-09 and average also. The search year has not been taken into consideration being an exceptional year. She herself calculated the ratio of recorded sales to unrecorded sales 1:2 and estimated total turnover of Rs. 24 lacs in A.Y. 2003-04 in place of Rs. 47,59,636/-. She further considered the appellant's own case decided by the learned CIT(A) in A.Y. 2009-10 vide order dated 20/1/2012 ITA 69/10-11 wherein G.P. rate was applied @ 16% on recorded and unrecorded sales. She further observed that it is a general accepted principle that the G.P. rate increases with decline in turnover. Since the turnover is held to be of Rs. 24 lacs, the G.P. is estimated @ 19% on total turnover. Thus, the learned CIT(A) confirmed G.P. rate @ 19% on total recorded and unrecorded sales of Rs. 24 lacs and gave....
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....ly preceding A.Y.'s. It is a fact on record that no unrecorded purchase or sales for the years under consideration were found in search. Therefore estimating the unrecorded sales at three times of recorded sales on the basis of finding pertaining to A.Y. 2007-08 to 2009-10 is without any basis. It may be noted that in A.Y. 2006-07 against recorded sales of Rs. 26.27 lacs unaccounted sales of Rs. 15.58 lacs was only found. Therefore the estimation of the unaccounted sales made by the AO is de hores any material and such estimation is not envisaged in assessment u/s 153A. The AO has applied higher g.p. rate by referring to the case of M/s Rajan Fire Works and Emporium. The application of the g.p. rate on this basis is not justified for the following reasons:- (i) The AO has not provided the financial data of M/s Rajan Fire Works and Emporium. In assessment proceedings, the result of this firm was not confronted to the assessee. (ii) The g.p. rate of this concern is not comparable with the assessee for the following reasons:- - Rajan Fire Works and Emporium is a manufacturer cum wholesaler in this business while assessee is wholesaler only. - Rajan Fire Works and....
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....re exist enough evidence admitted by the assessee himself; establishing that material was found to issue notices u/s 153A for all the six assessment years. This statutory process has been diligently followed by ld. AO and confirmed by ld. CIT(A). Learned CIT(A) was more than reasonable in estimating the turnover and G.P. rate and allowing part relief to assessee, therefore, he prayed to confirm the order of the learned CIT(A). 6. We have heard the rival contentions of both the parties and perused the material on record. The case law of Jai Steel India Vs. ACIT (supra) relied upon by the learned counsel for the assessee on 153A proceeding is not squarely applicable as the Hon'ble Rajasthan High Court has decided in this case the issue of any whether deduction can be claimed U/s 153A of the Act or not. As mentioned by the learned CIT(A) in her order that the assessment was completed U/s 143(1) of the Act, which has been held by the Hon'ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) that the proceeding completed U/s 143(1)(a) of the Act are not same as an assessment U/s 143(2) of the Act. Besides these cases will be applicable when n....
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....le case of M/s Rajan Fireworks and Emporium Prop. M/s Sunder Dass Hasani HUF, who is wholesalers/retailers of fireworks, who has shown G.P. rate ranging G.P. from 17% to 18%. The learned AR argued that the case of M/s Rajan Fireworks and Emporium Prop. M/s Sunder Dass Hasani HUF is not a comparable case hence distinguished on various facts and figures and nature of trading activity in quantum and experience. The assessee has shown G.P. in 2009-10 @ 14.99% on recorded sales of Rs. 21,57,817/-, therefore, we apply G.P. rate in A.Y. 2003-04 @ 13%, in A.Y. 2004-05 @ 14%, in A.Y. 2005-06 @ 13% and in A.Y. 2006-07 @ 13.5% in the interest of justice. The Assessing Officer is directed to recalculate the income of the assessee on the basis of G.P. rate decided by this Court in year wise on estimated total turnover by the learned CIT(A). 8. In the result, the assessee's appeals are partly allowed. (Order pronounced in the open court on 19.2.2015.) ============= Document 1 पà¥à¤°à¤¶à¥à¤¨ 21 उतà¥à¤¤à¤° आज दिनांक 22.10.08 को सरà¥à¤š की का....
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....¤¿à¤ हमारे business premises पर पाये गये stock का सतà¥à¤¯à¤¾à¤ªà¤¨ करवाना समà¥à¤à¤µ नही हैं इन सà¤à¥€ कमियों को मैं पहले à¤à¥€ सà¥à¤µà¥€à¤•à¤¾à¤° कर चà¥à¤•à¤¾ हूं पिछले पà¥à¤°à¤ªà¥à¤¨à¥‹à¤‚ के उतà¥à¤¤à¤° में मैंने बताया था कि मेरी अघोषित आय में से मैंने 41 लाख रूपये लोगों को उधार दे रखे हैं इसके अलावà¤....
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....¿à¤§à¤®à¤¾à¤¨ हैं । इन सà¤à¥€ करगजात stock इतà¥à¤¯à¤¾à¤¦à¤¿ के रूप में मैं अपने अनà¥à¤®à¤¾à¤¨ स 30 लाख रूपये à¤à¥€ अघोषित आय इस पेटे आयकर के लिठसमरà¥à¤ªà¤¿à¤¤ करता हूà¤à¥¤ जिसमें अघोषित stock, Document 2 sale, purchases के कचà¥à¤šà¥‡ कागजात à¤à¤µà¤‚ मेरे घर à¤à¤µà¤‚ business पà¥à¤°à¤¤à¤¿à¤·à¥à¤ ानों से पाये गये कागजात व दसà¥à¤¤à¤¾à¤µà¥‡à¤œ में à....