TaxTMI 
TaxTMI 
2019 (6) TMI 291
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....peration under section 132 of the I.T. Act. The assessee filed return of income declaring total income of Rs. 3,49,43,330/- on 28.12.2010. During the course of search operation, discrepancy in stock of Gold/Silver/Diamond Jewellery/Woolen etc. was noticed at all most all the business premises of the Diamond Hut Group which was confronted to Sh. Suresh Verma, Director of Diamond Hut India Pvt. Ltd. The statement of Sh. Suresh Verma, Director of Diamond Hut Group was also recorded on oath under section 133A of the Act wherein he offered a sum of Rs. 11.09 Crores as additional income over and above the regular income earned during the financial year 2009-2010. His statement is reproduced in assessment order in which he has after confronting with the seized material, offered a sum of Rs. 3,18,62,953/- as additional income over and above the income under appeal and paid the taxes. The assessee, therefore, has not explained/ specified the manner in which the undisclosed income was derived and also has not produced any document supporting the manner in which the undisclosed income of Rs. 3,18,62,953/- was earned or has not substantiated the manner in which undisclosed income was derived. ....
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....e A.O. accordingly made the addition of Rs. 60 lakhs on account of unexplained cash not accounted for on the date of search. 6. The assessee challenged the addition before the Ld. CIT(A) and it was submitted that addition was made without appreciating the factual submissions by assessee. The cash was recorded in books of account which have been completely ignored by the authorities below. Copy of the letter was filed to explain the factual details. Certificate from Chartered Accountant was filed to confirm that cash was available in the books of account on the date of the search. Since on the date of search action, showroom at Gurgaon was closed on account of weekly holidays, therefore, for safety and security purposes, the excess cash was never left at the shop. Since the Bank of assessee is regulated from Karol Bagh place which is regular practice of the assessee that excess cash is always taken and transferred to Karol Bagh place. No inconsistency or defects have been pointed out in maintenance of the books of account. The assessee claimed that cash amounting to Rs. 53,48,755/- was reflected in the books of account of the assessee at the time of survey/search, while a f....
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....laces, therefore, entire cash available in the books of account of assessee of different entities should have been considered. The explanation of assessee could not be ignored that there was a transfer of cash from Gurgaon Branch to Karol Bagh Branch. Therefore, entirety of the facts and the fact that seized records itself shows availability of the cash with the assessee in the books of account clearly shows that Ld. CIT(A) on proper appreciation of facts and material on record, correctly deleted the addition of Rs. 50,79,755/-. Ground No.2 of the appeal of Revenue has no merit and the same is accordingly dismissed. 10. On Ground Nos.3 to 5, Revenue challenged the Order of the Ld. CIT(A) in deleting the addition of Rs. 2,40,49,700/- made by A.O. on account of under reporting of profit. 11. During the course of assessment proceedings it was noticed that the assessee had shown net profit of Rs. 3,42,80,787/- during the year under consideration consideration against the total sales turnover of Rs. 267.34 crores. If the amount which were disclosed by the assessee during the course of search operation i.e., Rs. 3,18,62,953/- is reduced from the profit reported by the assessee for ....
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....e from other sources and A.O. was accordingly directed to do. 13.1. As regard addition of Rs. 2,40,49,700/- computed by the A.O. by applying the net profit rate of last year, the Ld. CIT(A) specifically found that there is an increase in the cost of the assessee in assessment year under appeal as compared to earlier year. The interest cost was found to have gone up. The salary has increased as compared to earlier year and other cost have also increased. The Ld. CIT(A), therefore, noted that profit margin of the assessee is below 1%, but, the circumstances noted above clearly show that trading result may also be in loss. But, in the present case, the result of the assessee is in profit and not in loss. Therefore, estimated addition made by the A.O. cannot be sustained. The Ld. CIT(A), accordingly, set aside the Order of the A.O. and deleted the entire addition. 14. The Ld. D.R. relied upon the Order of the A.O. 15. After considering the submissions of the Ld. D.R. in the light of findings of fact recorded by the Ld. CIT(A), we do not find any merit in these grounds of appeals of the Revenue. The assessee has surrendered Rs. 3.18 crores over and above the normal income durin....