TaxTMI 
TaxTMI 
2021 (4) TMI 497
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.... of the case are that the search and seizure action u/s 132 of the Act and surveys u/s 133A of the Act were carried out on 06.11.2009 at various business premises of M/s Action Construction Equipment Ltd., Group of Companies, Faridabad. A search operation u/s 132 of the Act was also carried out at the residential and business premises of the assessee and in other associated cases. The return of income was filed declaring income at Nil and had also shown current year loss of Rs. 1,42,45,889/- to be carried forward. Although, the due date for filing of return was 30.09.2010, the return was filed on 12.10.2010. The assessment was completed at an income of Rs. 11,52,314/- (rounded of to Rs. 11,52,300/-) on account of estimation of gross profit ....
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.... Representative (AR) submitted that no surrender had been made by the assessee during the course of search and that the addition of Rs. 11,52,314/- in the assessment proceedings was made by the Assessing Officer by applying average gross profit rate for the last three years @ 3.68% on account on some discrepancy in stock. It was further submitted that the discrepancy in the stock figures had arisen due to some technical problem in the new ERP software installed by the assessee and, therefore, the discrepancy in stock could not be attributed to any default on the part of the assessee. The Ld. AR further submitted that this was an adhoc addition based on applying the average gross profit rate for last three years and, therefore, the penalty i....
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.... out of data migration and not out of data malfunction and, therefore, the penalty had been rightly imposed and should be upheld. 5.0 We have heard the rival submissions and have also perused the material on record. The facts leading to imposition of penalty are that there was a search operation u/s 132(1) of the Act at the factory premises of the assessee at 45th Mile Stone, Prithla, Palwal. Physical inventory of the stock was prepared with the help of Sh. Sanjeev Sharma who was working in the capacity of Manager (production) since 2004. The total stock as on the date of search i.e., 06.11.2009 was inventorized and valued at Rs. 4,46 25,176.94 and the statement of Sh. Sanjeev Sharma was recorded u/s 132(4) of the Act and he agreed to the ....
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....y of penalty in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year." For the purposes of this section "undisclosed income" means: (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Chief Commissioner or Commis....