TaxTMI 
TaxTMI 
2015 (4) TMI 799
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....se the CIT(A) (Central), Jaipur has erred in law as well as on facts in deleting the addition of Rs. 19,50,059/- made by the A.O. on account of unexplained cash on the basis of admission of the partner of the assessee firm u/s 132(4) of the IT Act on the ground that the assessee has declared additional income of Rs. 42 lacs during the year under consideration which included the amount of unexplained cash. 3. Whether on the facts and circumstances of the case the CIT(A) (Central), Jaipur has erred in law as well as on facts in deleting the addition of Rs. 12,20,999/- out of the total addition of Rs. 15,01,237/- made by the A.O. on account of unexplained stock found at the time of search/survey despite the fact that the CIT(A) has partly accepted the facts mentioned by the A.O. in the remand report." Grounds of assessee's C.O. No. 35/JP/2012 (A.Y. 2009-10) "1. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming trading addition of Rs. 2,29,402/- by applying GP rate 16%. 2. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in computing the alleged unexplained investment in stock at Rs. 4,63,345/- and....
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....e statement of Shri Pankaj Agarwal in reply to Q. No. 8 recorded U/s 131 of the I.T. Act, 1961 on 05/01/2008 which is reproduced below:- Shri Madan Mohan Gupta and Shri Pankaj Agarwal both admitted that the books of accounts wee not completed and assessee firm indulged into transactions which are not entered in the regular books of account. It has been concluded by the Assessing Officer that opening stock and closing stock is not verifiable. During the course of assessment proceedings to verify the genuineness of the purchases some of the parties from whom the assessee has made purchases notices U/s 133(6) of IT Act,. 1961 were issued to the purchasers parties. Out of these notices issues, following notices were returned back by the postal authority unserved giving remark "Not known" or "No such address" etc. 1. M/s Arjun Fireworks, Sivakashi. 2. M/s Shri Divan Foreworks, Thiruthangal, Sivkashi 3. M/s Rajavel Fireworks factor, Sivkashi. 4. M/s Jaya Latchana Fireworks, Sivkashi. 5. M/s Durgaiamman Fireworks, Vishwanathan, Sivkashi. 6. M/s Anitha Sparklers Fireworks, Sivkashi 7. M/s Gokila Fireworks, Sivkashi. As the notices issued to the purchase partie....
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....tal turnover shown in the regular books of account at Rs. 21,57,817/- and unrecorded turnover of Rs. 70,24,060/-. Therefore, he concluded gross profit at Rs. 16,98,648/- as against Rs. 2,23,516/- declared by the assessee in the regular books of account and Rs. 9,16,182/- out of books. The trading addition of Rs. 4,58,950/- was made by the Assessing Officer. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the learned CIT(A), who had allowed the appeal partly by observing as under:- "2.3 I have considered the submission of learned A.R. and have perused the material on record. Undisputedly, on going through the facts, provisions of section 145(3) are clearly applicable. This has also not been disputed by the A.R. Coming to the application of G.P. rate, it is quite evident that G.P. rate shown by the appellant for different year is certainly quite less than the G.P. rate of 17.02% to 18% declared by M/s Rajan Fire Works @ Emporium. The appellant as well as this firm both are wholesaler. It may be possible that M/s Rajan Fire Works & Emporium may be doing some manufacturing of its own, part from main business of wholesale trading. C....
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.... has declared better results, the G.P. rate declared should be accepted. The assessee has declared undisclosed miscellaneous income of Rs. 42 lacs, apart from undisclosed interest income and income from unaccounted business of Rs. 10,12,675/-. Once this is assessed, no separate trading addition of Rs. 4,50,8950/- is required as miscellaneous income offered is much more than the trading addition made by the A.O. In view of above the trading addition made by the A.O. is uncalled for and be deleted. 7. We have heard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that the assessee has been indulging in unaccounted sales/purchases. The major expenses on account of trading of fireworks have already been debited by the assessee in P&L account except unaccounted purchase. Therefore, in unaccounted purchase resultant to unaccounted sales, the assessee has more profitability. The learned counsel has not controverted the finding given by the learned CIT(A). In case of Rajan fireworks and Emporium, the G.P. shown by it @ 17% to 18%, who is dealing in wholesale/retail fireworks. Therefore, the learned CIT(A) has reasona....
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....ined by the assessee before the Assessing Officer, which has been rejected by him without appreciating the facts. It is also argued by the AR before the learned CIT(A) that undisclosed profit from undisclosed sale recorded in seized material totaling to Rs. 26,73,213/- spread over in four years. The additional income has further been offered for taxation to explain the acquisition of unaccounted assets. Such income is Rs. 42 lacs for A.Y. 2009-10, Rs. 3.5 lacs for A.Y. 2008-09 and Rs. 6.5 lacs for A.Y. 2007-08. Thus, total additional income offered by the assessee was Rs. 52 lacs included the undisclosed profit as well as interest on loan additionally offered, total unaccounted income offered, came to Rs. 79,69,706/- whereas unaccounted assets found to be noticed during the course of search, inter alia, includes cash loan of Rs. 35 lacs, unexplained cash of Rs. 19,50,059/- and unaccounted investment in land at Rs. 15 lacs. The learned Assessing Officer had accepted the explanation partly as much as that cash loan of Rs. 35 lacs and unexplained investment in land was not added whereas unexplained cash was added. 10. Now the Revenue is in appeal before us. 11. The learned CIT D....
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.... the course of search. The statement recorded U/s 133A of the Act has no evidentiary value as held by the Hon'ble Supreme Court but the statement recorded U/s 132(4) has evidentiary value, which is also rebuttable presumption as held by the Hon'ble Apex Court in various cases. It is fact that Shri Madan Mohan Gupta in question to answer No. 21 in statement U/s 133A dated 22/10/2008 had admitted that the cash of Rs. 20 lacs was found at residence, had disclosed additional income. The learned AR for the assessee's argument that the excess cash found during the course of search at residence was result of unaccounted sale made in preceding years. The learned CIT(A) also analysed the whole facts with reference to cash and unaccounted investment found and has given detailed findings on this issue, which has not been controverted by the learned CIT DR. Therefore, we confirm the order of the learned CIT(A). 14. In the result, the appeal of the revenue on this ground is dismissed. 15. The third ground of the revenue's appeal and second ground of the assessee's C.O. are against deleting the addition of Rs. 12,20,999/- out of total addition of Rs. 15,01,237 on accoun....
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..... 15,01,237/- was found at the time of search, which was added in the income of the assessee as unrecorded investment in stock and treated the income from undisclosed income. 16. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the learned CIT(A), who had partly allowed the appeal by giving detailed findings on page Nos. 17, 18 and 19 and confirmed the net addition under this head at Rs. 2,80,238/-. 17. Now the Revenue is in appeal and assessee is in C.O. before us. 18. The learned CIT-DR vehemently supported the order of the Assessing Officer whereas the learned AR for the assessee challenged the addition confirmed by the learned CIT(A) on the basis of not allowing the set off trading addition. He further submitted as under:- i. There is no dispute as to the fact that the physical stock found in survey is valued at MRP. Therefore, to arrive at the cost price, deduction is required to be given on account of (a) normal discount from MRP and (b) deduction for G.P. Rate. The AO has allowed deduction for g.p. rate but he has not allowed deduction for discount from MRP rate. ii It is a common practice in this trade that discoun....
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....the stock found in search would work out as under:- Stock valued at MRP rate accepted by CIT(A) Stock at Godown No. 3 Rs. 2,67,395/- Rs.33,02,028/- Stock at Godown No.4 Rs.1,91,530/- Total Rs.37,60,953/- Less:- 50% discount to arrive at selling rate Rs.18,80,476/- Balance Rs.18,80,476/- Less:- G.P. Margin @15% Rs.2,82,071/- Balance being cost of goods Rs.15,98,405/- Add:- Cost of chemical at Shop No. 295-296 Rs.2,31,485/- Total value of stock at cost Rs.18,29,890/- Less:-Book value of stock Rs.17,52,601/- Excess Stock Rs.77,289/- From the above, it can be noted that excess stock is only Rs. 77,289/- and not Rs. 4,63,345/- as worked out by CIT(A). This excess stock is also on account of estimating the discount from MRP at 50% whereas the evidence on record show that such discount is at higher rate and therefore the addition sustained by CIT(A) is uncalled for. vii. Without prejudice to above, even if the excess determined by CIT(A) is accepted then set off of the same should be considered against the trading addition of Rs. 24,04,135/- sustained by CIT(A) in A.Y. 03-04 to 06-07 and also from the ....
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.... आप नही करवा पा रहें हैं इन सà¤à¥€ कमियों के बारे आप का कà¥à¤¯à¤¾ कहना हैं ? मैं यह सà¥à¤µà¥€à¤•à¤¾à¤° करता हूठकि हमारे पटाखें के business में काफी हद तक transaction बही खातों के बाहर रहते हैं हमारे sale and purchases à¤à¥€ cash में होते हैं । जिनका विवरण बहीखातों में दरà¥à¤œ नही होता यही कà¤....
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....¿à¤•à¥à¤¤ जो loose paper इतà¥à¤¯à¤¾à¤¦à¤¿ मेरे घर à¤à¤µà¤‚ business सà¥à¤¥à¤¾à¤¨à¥‹à¤‚ से पाये गये हैं उनमें अघोषित आय और उससे अरà¥à¤œà¤¿à¤¤ निवेष के रूप में मैं सà¥à¤µà¥‡à¤šà¥à¤›à¤¾ से अपनी अघोषित आय समरà¥à¤ªà¤¿à¤¤ करना चाहता हूठ। मैं यह à¤à¥€ सà¥à¤ªà¤·à¥à¤Ÿ करना Document 2 चाहता हॠकि हमारे business पà¥à¤°à¤¤à¤¿à¤·à¥à¤ ानों में करीब 10 सà....
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.... इस hard disk में हमारी firm और concerns का tally-9 और tally—7.2 format में data रखा हैं । tally 7.2 में à¤à¥€ बही data है जो कि tally 9 में हैं । बस उसे upgrade कर दिया गया हैं । tally 9 में Poornima fireworks की F. Y. 2005–06, 2006-07 की तो पूरी complete books है और F.Y. 2007–08 व 2008-09 की incomplete books हैं । Document 4 पà¥à¤°. 20 आज दिनांक 22.10.08 को आपके निवास सà¥à¤¥à¤¾à¤¨ पर सरà¥à¤š की कारà¥à¤¯à¤µà¤¾à¤¹à¥€ के दौरान à....