AI Drafter 
TaxTMI 
TaxTMI 
2016 (3) TMI 1378
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.... furnished return of income on 30.9.2008 showing total income at Rs. 1,04,94,240/- and assessment was completed on 26.11.2010 at income of Rs. 1,04,94,240/-. A survey under section 133A of the Act was conducted in the business premises of the assessee on 28.2.2008. During the course of survey, the assessee surrendered a sum of Rs. 1.05 crores as an additional income i.e. income other than normal income as under : i) Rs. 9 lacs on account of excess cash. ii) Rs. 96 lacs on account of sundry receivable. 3. The assessee filed return of income declaring total income at Rs. 1,04,94,240/-, which is lower than the additional income declared during the survey. The net profit declared by the assessee was after declaring additional income. If the income of Rs. 1.05 crores disclosed during the course of survey is taken out, the assessee has shown loss of Rs. 5,760/- against the profit of about Rs. 1,79,200/- shown in the preceding assessment year. The assessee has done this to set off the tax liability on the additional income declared during the survey under section 133A of the Act. The GP declared by the assessee has fallen to 1.82% against 4.19% of the last. Y....
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.... of the Act. The month-wise purchases and sales with consumption data has been filed with reference to per unit consumption of fuel and electricity, which clearly shows that the books of account have been properly maintained. There is no interpolation, cutting and manipulation in the books of account of the assessee, which are audited and supported by stock records. The Assessing Officer has not pointed out any mistake or irregularity or defect in the books of account maintained by the assessee. The decision of I.T.A.T., Chandigarh Bench in the case of M/s Bassi Tubes Pvt. Ltd. (supra) is not applicable in this case because the facts in this case are completely different. In this case, this company did not have any stock records, whereas in the case of the assessee, complete stock records have been maintained, which were produced before the Assessing Officer. 5. The learned Commissioner of Income Tax noted that the assessee has manipulated its accounts after the date of survey so as to show low GP. The statement of the assessee was recorded on 28.2.2008 was referred to, in which the assessee accepted that no stock register is kept as no excise duty is payable and liable to their....
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....oss Account declaring additional income to Rs. 1.05 crores and the expenses claimed in the trading account and Profit & Loss Account and submitted that the expenses have not been disputed by the learned Commissioner of Income Tax, which was major reason for fall in GP and relied on the order of I.T.A.T., Chandigarh Bench in the case of M/s Venus Woollen Mills Vs. CIT dated 17.9.2014, copy of which is filed. Paper Book page No.35 is notice dated 31.5.2010 issued by the Assessing Officer seeking several information from the assessee, which includes the comparative chart of GP, NP and manufacturing expenses of last three years, month-wise purchases, consumption, production and sales, per unit consumption of fuel/electricity and comparison with last year, units of electricity consumption to production, details of opening and closing stock and how the valuation of stock has been done, etc. Paper Book page Nos.38 to 42 is the reply of the assessee before the Assessing Officer on all the questionnaires raised by the assessee, in which complete details of manufacturing, sales, purchases, per unit consumption of fuel/electricity, wastage were filed. The details of opening and closing stock ....
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....st the record maintained by the assessee. The learned counsel for the assessee relied on the decision of I.T.A.T., Chandigarh Bench in the case of Sanjeev Kumar Vs. ITO, 31 ITR (Trib) 680, in which the Tribunal following the decision of the Hon'ble Madras High Court in the case of CIT Vs. Khader Khan Son, 300 ITR 157 confirmed by the Hon'ble Supreme Court in 352 ITR 480 held that the statement recorded during the survey under section 133A of the Act does not have evidentiary value. The learned counsel for the assessee, therefore, submitted that the learned Commissioner of Income Tax was not justified in setting aside the assessment order. The calculation of stock on the date of survey was made by applying GP at 4.19% instead of in thousands shown in the notice because difference in the stock found as per show cause notice was Rs. 98,861/- only. The learned counsel for the assessee, therefore, submitted that the order under section 263 of the Act may be quashed and entire addition may be deleted. 8. On the other hand, the learned D.R. relied on the impugned order and submitted that the GP chart should be filed before the Assessing Officer. Defects were pointed out during ....
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....n the Profit & Loss Account, because of the expenses debited to the Profit & Loss Account, the net profit declared was of Rs. 1,10,26,725/- (Paper Book23). Therefore, there could not be the same static profit declared by the assessee in comparison to the earlier years. The assessee claimed in the Audit Report that proper stock records have been maintained and stock records were also produced before the Assessing Officer at assessment stage. However, the explanation of the assessee was rejected because the assessee in the statement made during the course of survey stated that no stock register has been maintained. It is well settled law that the statement made during the course of survey would not be admissible as assessee is able to explain the issue and the learned counsel for the assessee relied on the decision of the I.T.A.T., Chandigarh Bench in the case of Sanjeev Kumar (supra) in support of the same, in which the Tribunal followed the decision of Hon'ble Madras High Court in the case of Khader Khan Son (supra) confirmed by the Hon'ble Supreme Court. The assessee in the preceding assessment year 2007-08 also filed Audit Report, which contained the fact that the assesse....
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....The Tribunal, having accepted that the income returned by the assessee for the assessment year 1976-77 was proper, should not fix the same yield for the subsequent assessment years based on the material and factual circumstances which were present for the assessment year 1976-77. The Tribunal had power to substitute a different rate but that determination would have to be in accordance with law and with reference to the rrelevant data for each assessment year." 11. The Hon'ble Rajasthan High Court in the case of CIT Vs. Gotan Lime Khanij Udhyog, 256 ITR 243 held as under: "Held, that the Tribunal had reached the finding on the ground that, in the absence of any finding recorded by the Commissioner (Appeals) that the expenses incurred on any account appeared to be unreasonable or excessive, the additions sustained merely on suspicion of pilferage or leakage were not justified. This conclusion was a finding of fact keeping in view that the additions in the profits and gains returned by the assessee were not a necessary concomitant of an order made under section 145(1) or 145(2). Therefore, there was no error in the order of the Tribunal deleting the entire additions t....