2020 (9) TMI 187

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...., the assessee has challenged estimation of sales at Rs. 3,50,93,668/- on the basis of seized documents and thereby making addition of Rs. 12,75,683/- by taking 5% net profit on such alleged sales. 2. The facts in brief are that a search and seizure action was carried out u/s.132 on 09.12.2005 at the residence of the assessee, during the course of which certain documents were found and seized. The assessee is carrying out business of jewellery on wholesale basis. Initially the return of income was filed on 02.08.2006 declaring income of Rs. 91,690/-, showing salary and interest income which was later on revised to Rs. 5,70,690/- on 19.12.2007 which included undisclosed income of Rs. 4,79,000/- from jewellery business. The main issue raised....

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....gold jewellery of weighing 1741.540 gms. The appellant had purchased gold jewellery weighing 994.470 gms. In this year whereupon the closing balance of the gold jewellery weighted 2736.010 gms. The Assessing Officer did not appreciate the true position but erred in assuming that the closing balance of gold Jewellery weighing 2736.010 represented alleged sales of the appellant of Rs. 27.36.010 without there being any material whatsoever in. support of the alleged sales. 7.3 It has also been submitted that as per page 13 of Annexure A-I, the appellant had purchased gold Jewellery weighing 13 gms. besides the opening jewellery weighing 1.382.230 gms. Thus the appellant had closing balance of gold Jewellery weighing 1395.320 gms. The Assessi....

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....on, Ld. CIT(A) held that the assessee also could not substantiate the correctness of the figure of sales of Rs. 95,75,449/- as declared by him in the revised return, and accordingly, he treated the unrecorded sales as per seized paper at Rs. 3,50,93,668/- and applied 5% instead of 20.48% taken by the Assessing Officer on unrecorded sales, which worked out to Rs. 17,54,683/-. Since assessee had already disclosed Rs. 4,79,000/- the net undisclosed profit was worked out at Rs. 12,75,683/-. 4. Before us, ld. counsel for the assessee, Mr. Rajiv Saxena submitted that the entire basis of taking the alleged unrecorded sales is erroneous for the reason that; firstly, the Assessing Officer has taken quantity/weight of the jewellery as value; secondl....

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....ficer as value in terms of rupees. Thus, the entire basis of the sales taken by the Assessing Officer is incorrect. He further submitted that in the earlier years similar mistake was done by the Assessing Officer which has been duly accepted by the Ld. CIT (A). Thus, the basis of alleged sales on estimating the net profit is based on mis-appreciation of facts and misinterpretation of the seized documents. 5. On the other hand, ld. DR strongly relied upon the findings of the Ld. CIT (A). 6. After considering the rival submissions and on perusal of the relevant findings and material referred to before us, at the time of hearing, we find that the only controversy is with regard to the estimation of sales of Rs. 3,50,93,668/- on the basis of ....