AI Drafter 
TaxTMI 
TaxTMI 
2012 (9) TMI 1054
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....or the sake of convenience. 2. The assessee is assailing the decision of Ld CIT(A) in confirming the additions relating to the suppression of sales, disallowance of part of motorcar and telephone expenses in all these years. 3. The facts relating to the issues are stated in brief. The department carried out search and seizure operations in the hands of Shri Adattil Mohammed and in the premises of M/s Classy the antique designed furniture. During the course of search, the certain documents pertaining to the assessee herein were seized. Accordingly assessment proceedings were initiated in the hands of the assessee u/s 153C of the Act. The assessee herein is a partnership firm constituted by its partners Shri A.Muhammed and Shri K.Moidee....
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.... is in appeal before us. 5. The Ld Counsel for the assessee submitted that the AO should not have placed reliance on the statement given by Shri A.Jabir, as he was a stranger in so far as the assessee firm is concerned. He further submitted that the assessee firm did not effect any sales to the sister concerns and hence the methodology, if any, adopted in the sister concerns cannot be automatically applied here. He further submitted that the AO should not have taken support from the statement taken from the sales man named Shri V.Ahamed during the course of survey operations, as he was recently employed and he cannot be considered as having full knowledge about the business. He further submitted that the search officials did not unearth ....
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....ster concern of Classy group which is a family concern of Adattil Mohammed. The modus operandi regarding the suppression of sale by understating the sale is common in all the firms as it is evident from the statement of Sri Adattil Jabir and Sri V. Ahammad as mentioned above. There was an inspection by the intelligence officer of Commercial Taxes of Tirur in the case of Kottakkal Wood Complex on 17.8.06 and excess of stock of 14,38,785/- was found and the Department of Commercial Taxes has issued a show cause notice bearing No. TRL-08/06-07 dated 16.10.2007 for imposing penalty u/s. 67(6) of the KVAT Act. In response to the said show cause notice assessee vide letter dated 10.4.07 replied that the stock difference existed only in the case o....
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....a clear admission by sales man of the appellant firm Mr. V. Ahamed that sale price was decided by Mr. Jabir who was a partner in M/s. Classy the Antique Designed Furniture a sister concern of the appellant firm. Mr. Jabir who was son of the Managing Partner in turn made a clear admission that invoice was prepared only for half of the amount for which an item was sold. The statement was duly corroborated by the coded tag attached to the furniture which has been duly elaborated by Mr. Jabir and has been also referred to in the body of the assessment order. This modus operandi was also elaborated by Sales man Mr. V. Ahamed in the deposition given during the course of search action as per the following question and answer: "Question: Who is ....
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....he questions put to him. The argument of the Learned Counsel for the appellant that the statement made by Mr. Jabir can at best be relied upon for the year 2007-08 and that too till the date of search i.e., 12.09.2007 does not have much merit. This is for the reason that Mr. Jabir elaborated upon the modus operandi of the appellant along with the reasoning that attempt was to reduce the incidence of Sales tax. A perusal of book results, of the appellant for various years reveal as under: Sl. No. A.Y. Turnover shown (Rs.) GP rate declared (%) 1. 2002-03 37,12,442 29.94 2. 2003-04 61,26,928 18.21 3. 2004-05 52,24,895 17.06 4. 2005-06 34,82,459 19.93 5. 2006-07 17,50,930 2....
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....coded language and corresponding sale invoices wherein only half of the actual sale price was recorded. This modus operandi of the group concerns was duly and simultaneously confirmed in an independent manner both by Mr. Jabir, partner of M/s. Classy the Antique Designed Furniture, a sister concern of the appellant firm, and by Mr. V. Ahamed salesman of appellant firm. Inspection by Intelligence Officer of Commercial Taxes and discovery of substantial stock discrepancy as referred to in the assessment order further confirmed that the appellant was not recording the business transactions in the books of accounts in a truthful manner. I, therefore, hold that on the basis of material and evidences available on record, the Assessing Officer was....