TaxTMI 
TaxTMI 
2021 (1) TMI 406
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....he grounds of appeal are related to the addition of Rs. 61,96,070/- made by the Assessing Officer (AO) as unexplained income. 3. Brief facts of the case are that the assessee is an individual, engaged in the business of wholesale trade of cloth and readymade garments in the name of Srinivasa Enterprises. He is also the partner in the firm, M/s Lucky Retail Stores along with his wife and both of them are having the share of 1/6th each . For the A.Y. 2016-17, the assessee filed the return of income on 17.10.2016 declaring total income of Rs. 13,57,520/-. Subsequently, the case was selected for limited scrutiny and a notice u/s 142(1) was issued to the assessee calling for information to examine whether the share capital was genuine and fro....
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....clarations given at the time of survey. The value of stock was not taken to the firm's Profit & Loss account and Balance Sheet and the same was taken to the personal capital accounts of the partners, thus argued that the sale proceeds of the excess stock amounting to Rs. 62.5 lakhs i.e. 1/3rd share consisting of assessee's and his wife's share was taken to the assessee's capital account. The assessee submitted that the increase in capital was only Rs. 61,96,000/- against the receipt Rs. 62.5 lacs which was less than the income admitted, hence explained that no addition is warranted on account of increase in capital. The AO did not find the explanation to be satisfactory, hence added the entire sum of Rs. 61.96 lacs to the income of the asse....
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....1/6th share. During the course of survey in the Lucky Stores, the AO found excess stock of Rs. 1.87 Cr. on the basis of gross profit. The excess stock of Rs. 1.87 Cr. was not taken to the Balance Sheet, Profit & Loss account and offered the same in the computation of income separately and paid the taxes thereon. Out of Rs. 1,87,50,000/-, cash generated out of the proceeds of such stock was taken by the partners and introduced in the partners capital account. The assessee being 1/6th share holder and including his wife's share it worked out to 1/3rd amounting to Rs. 62,50,000/- which was taken to the assessee's capital account, that constitutes Rs. 30,11,070/- was out of sales of unaccounted stock of the firm and Rs. 31,85,000/- as cash inve....
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.... has admitted excess stock of Rs. 1,87,50,000/- in the firm's hands and which was accepted by the AO in the assessment order passed for the A.Y. 2016-17 u/s 143(3) dated 31.12.2017. Since the assessee has offered the excess stock separately in the computation of income without taking into the books of accounts, the source of Rs. 1,87,50,000/- was available to the partners of the firm in the form of cash or kind, thus, the partners of the firm are free to distribute the sale proceeds of the stock as drawings towards their shares. Accordingly, all the partners of the firm had distributed the sales and taken to their personal balance sheets. In the same manner, the assessee also has taken the share of his income generated out of the excess sto....