TaxTMI 
TaxTMI 
2015 (8) TMI 1084
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....ation u/s. 133A of the Act was carried out at the business premises on 5.1.2006. During the course of the survey, various incriminating documents were found evidencing unaccounted cash sales of fents and ash etc. Documents containing evidence of cash payments towards labour charges not recorded in the books of account were also found. 3.2. Statements were also recorded during the course of the survey in which Shri Dilip Pacheriwala, the Managing Director of the assessee company admitted that the sale of fents/bhangar was not recorded in the books of accounts fully. He also admitted that expenses on labour had been incurred in cash which were not recorded in the books of accounts. The M. D in his statement accepted the fact of payment in cash to labourers amounting to Rs. 50,61,046/-. Accordingly, the original return filed on 31.10.2004 was revised on 29.3.2006 declaring income at Rs. 3,32,42,350/- which included the income of Rs. 50,61,040/-. 3.3. During the course of the scrutiny assessment proceedings, the impounded materials relating to and relevant to the year under consideration were analyzed. Queries were raised accordingly. One of such query related to a blue colour no....
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....the finding of the AO. 5. Before us, the Ld. Counsel for the assessee reiterated what has been stated before the lower authorities. The Ld. Counsel drew our attention to the relevant pages of the paper book. Drawing our attention to Page-139 of the paper book the Ld. Counsel pointed out that the entries in this page have to be read and considered with the entries on page-138 of the paper book. Drawing our attention to the entry on page-138 which related to the transfer of goods to V-27 being 687898.99 metres. It was pointed out that if this is considered and read with the entries on page- 139, the shortage of 909289.17 has to be adjusted with the transfer of goods of 687898.99 and at the most the shortage should be considered at 221390.18 mtrs. The Ld. Counsel further stated that the profit rate of 20% adopted by the AO is against the facts of the case. Drawing our attention to the comparative chart of profit shown in previous 5 years, the Ld. Counsel stated that the profit never were more that 17% and the average profit comes to 14.90. The Ld. Counsel reiterated the claim that there is no adverse finding by the Excise Department and there is no evidence on record to show that t....
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.... which read as under: December 2003 - Rs. 11,36,680/- January, 2004 - Rs. 12,11,441/- February. 2004 - Rs. 12,36,315/- March, 2004 - Rs. 14,76,610/- - Rs. 50,61,040/- 8.2. The assessee further claimed that this cash sale should be considered as utilized for making payments to labourers and others. The claim of the assessee that this alleged sale is included in the income offered during the survey was not accepted by the AO who proceeded by making an addition of Rs. 29,09,456/-. 9. The assessee carried the matter before the Ld. CIT(A). The assessee reiterated its claim that the alleged cash sales is part of the income surrendered in the revised return of income. The Ld. CIT(A) did not accept the claim of the assessee. On the contrary, the Ld. CIT(A) was of the firm belief that the assessee must have sold scrap amounting to Rs. 80 lakhs whereas the AO has confined his estimation on the basis of seized material at Rs. 29,09,456/- only. The Ld. CIT(A) further observed that instead of making addition of Rs. 80 lakhs, the AO has made an addition of Rs. 29,09,456/- thereby allowing substantial rebate to the assessee therefore the AO was....
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....to the relevant portion of the statement recorded at the time of survey and we have mentioned the answer to question No. 34 wherein the Managing Director has specifically said that the cash sales have been utilized for making the labour payment and therefore the cash generated out of the sale of scrap can be accepted as utilized for making the payment of Rs. 9,77,200/- and therefore no separate addition is called for. We, accordingly direct the AO to delete the addition of Rs. 9,77,200/- which is treated as unexplained expenditure u/s. 69C of the Act. This grievance of the assessee is also allowed. 15. The next grievance relates to the claim of deduction u/s. 80HHC of the Act in respect of draw back credit attributable to the customs duty. At the very outset, the Ld. Counsel for the assessee stated that this issue is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Gujarat High Count in the case of Avani Exports and Others 348 ITR 391 wherein the Hon'ble High Court has held that the operation of the said section could be given effect from the date of amendment and not in respect of earlier assessment years of the assessees whose e....