2017 (11) TMI 1672

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....cting the claim that only prof it element returned at Rs. 3,62,548/- in the unaccounted sales of Rs. 14,55,072/- is required to be brought to tax. 3. The Ld. First Appellate Authority is not justif ied in upholding the treatment of entire unaccounted sales as income especially when the said unaccounted sales itself is quantif ied before the end of the previous year relevant f or the asst. year under consideration." Ground No. 4 is general in nature. 2. Briefly stated, assessee is an individual, engaged in the business of purchase and sale of readymade dresses under the trade name of M/s. SVS Emporium for the last several years. Assessee has filed his return of income for the A.Y 2013-14 on 29-09-2013 by declaring total income....

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....der dispute. It was submitted that making an addition of entire unaccounted sales was not warranted as assessee, also offered excess stock during the course of survey and therefore, a separate addition of unaccounted sales again is not warranted. It was further submitted that only profit margin can be brought to tax, which the assessee already offered and relied on the following case laws: "1. ITO Vs. M/s Karthik Poultry Farm - ITAT Bangalore, dt. 06.11.2015. 2. CIT Vs. Sharda Real Estate (P) Ltd - 099 DTR 0100 (MPHC) 3. ACIT, Circle. 1 Vs M/s. Archana Trading Co - ITAT Cochin, dt. 28.02.2013. 4. ACIT Vs. M/s Pahal Foods (P) Ltd - ITAT Hyderabad, dt. 30.09.2009" 5. Ld. DR, however, relied on the orders....

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....s it may, assessee has agreed to the statement during the course of survey and admitted the incomes of regular profit, excess stock and the profit on unaccounted sales, as well at the time of filing return itself. It is trite law that unaccounted sales found out during the course of survey or search cannot be added as such and only profit can be brought to tax. What is to be taxed is only unaccounted income and not unaccounted receipts, unless the receipts are proved to the income. Here A.O himself quantified the unaccounted sales in survey. Assessee offering of profit @ 24.91% cannot be faulted on the facts of the case. Various case law relied upon by assessee also support the view that only profit margin can be brought to tax but not enti....