TaxTMI 
TaxTMI 
2018 (1) TMI 727
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....yderabad, dated 04-03-2016. Since common issue is involved in all the assessment years, these appeals are heard together and disposed of by this order. Cross-Objections are by assessee in support of the order of CIT(A), the issue on which assessee has got relief. 2. Briefly stated, assessee, a private limited company is carrying on the business of manufacturer and selling of drilling equipment to distributors and dealers. In the impugned assessment years, assessee has filed returns. Consequent to the information furnished by Central Excise Authorities, who conducted investigation into the business operations of assessee, Assessing Officer (AO) has reopened the assessments and based on the information furnished by the Commissioner of Cust....
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....essee relied on the decision of CIT Vs. Kamdhenu Steel & Alloys Ltd., [248 CTR 33] (Delhi) that mere demand of duty under another law cannot be the ground to include the same in assessment under the I.T. Act, assessee mainly submitted that entire turnover cannot be brought to tax and only income can be brought to tax and relied on various case law as stated in paras 6 & 7 of the written submissions before the CIT(A). Accepting the contentions, Ld.CIT(A) directed the AO to estimate the income at 6.2%, stated to be average of the impugned years profit on the gross turnovers. While giving relief on the issue of addition of turnover, Ld.CIT(A), however, confirmed the other addition of unaccounted purchases in AY. 2008-09 and payment of Rs. 10 L....
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....t of Income Tax and in the case of Badri Prasad Bhagvandas and Co. Vs. CIT reported in 82 Taxman 109 (MP). However these case laws mentioned above, do not apply to assessee case as the business is of different nature. The Assessee net profit to the Gross Turnover over the years have been for a. 4.0% for A.Y. 2008-09, b. 6.8% for A.Y. 2009-10, c. 4.7% for A.Y. 2010-11 and d. 9.3% for A.Y. 2011-12. Average is 6.2% 10. The argument of the applicant has strength. The Central Excise are confirmed the findings as 'unaccounted sales'. Assessing Officer also accepts it to be part of Turnover. And the expenditure has been presumed by the assessing Officer, to have been all....
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....turnover in each of these years than what was disclosed, it would be appropriate to adopt the same ratio of profit on the disclosed turnover to the unaccounted turnover as well. Assessee would have got away about undisclosed turnovers but for the action by the Central Excise Authorities. We were informed that the issue before the Central Excise Authorities is pending adjudication in the appellate tribunal therein. However, assessee has no objection for adopting the turnovers in income tax proceedings. Therefore, accepting the turnovers as quantified by the Excise Authorities, AO is directed to adopt the same profit ratio as offered by assessee on the disclosed turnovers to the undisclosed turnover as well, in each of the assessment years. A....
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....rdingly dismissed. 7.4. Coming to assessee's appeal in AY. 2008-09, there is an addition of Rs. 26,25,220/- towards unaccounted purchases. Even though Ld.CIT(A) stated that ground is not pressed, assessee's Counsel informed that both the issues were contested in ground Nos. 2.7 to 2.9. Therefore, assessee has not consented for withdrawal of ground. It was submitted that assessee had unaccounted turnovers and also unaccounted purchases, therefore addition of unaccounted purchase alone is not warranted. As seen from the show cause notice, the Central Excise Authorities have quantified the turnover based on various inputs like fund flow into various bank accounts etc., AO has not made out any case in those lines, but the entire turnover was....