TaxTMI 
TaxTMI 
2015 (3) TMI 1401
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....struction of his client, he does not want to press this ground. Accordingly, ground No. 2 is dismissed as not pressed. 3. In Ground No. 3, assessee has challenged the decision of CIT(A) in confirming the addition of Rs. 77,128. 4. Briefly the facts are, assessee a partnership firm is engaged in the business of trading in gold jewellery. For AY under consideration, assessee filed its return of income on 29/09/2009 declaring total income of Rs. 61,59,930, but, prior to that a survey operation u/s 133A of the Act was conducted in the business premises of assessee on 16/10/2008. On the basis of the material found during the survey, AO in course of assessment proceeding, noticed that at the time of survey while taking physical inventory cash o....
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....o dispute to the fact that on physical verification excess cash of Rs. 77,120 was found at the time of survey. AO has treated excess cash as unexplained income of assessee by alleging assessee failed to explain the source of excess cash. However, it is the contention of assessee before ld. CIT(A) as well as before us that excess cash found at the time of survey belong to partners of HUF. On perusal of the returns filed electronically by Giridharlal & Sons, HUF for the AYs. 2008-09 and 2009-10, it appears that not only the returns were filed prior o the date of survey, but, the HUF is also generating some amount of income. The balance sheet as on 31/03/08 also shows cash in hand of Rs. 70,000. Therefore, assessee's claim that excess cash act....
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....s regularly submitting VAT returns. It was submitted, because of ill health of the managing partner, who is head of the family, other partners were unable to concentrate much in business after survey. It was also submitted, due to survey business was affected and also because of huge rise in market rate sales decreased after the date of survey. Thus, it was submitted by assessee that there is no need to estimate any sales and the book results need to be accepted. AO, however, did not find merit in the submissions of assessee. He observed that because of ill health of the managing partner, the business need not be neglected. Further, explanation of assessee that due to survey business suffered is also not acceptable. AO observed that assesse....
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....ant and made an addition of that percentage on the excess sale. The appellant will get relief accordingly." 11. The ld. AR more or less reiterating the submissions made before the departmental authorities submitted that neither at the time of survey nor during the assessment proceeding, the department has brought any material on record to establish suppression of sales by assessee. Merely because there is reduction in sales in the post survey period, AO cannot make additions on assumptions and presumptions by estimating sales. Ld. AR submitted before us, assessee is regularly filing VAT returns disclosing sales and no suppression of sale has been detected by those authorities, therefore no addition can be made on estimate basis. Ld. AR ref....
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....the sales booked for the months of April to October. Though, it may be a fact that such variation in sales may raise a suspicion in the mind of AO with regard to sales disclosed during the post survey period, but, such suspicion, however strong may be cannot take the place of evidence. No material has been brought to our notice by ld. DR to even remotely indicate assessee has indulged in suppression of sale. Drop in sales for the post survey period may be due to various reasons but without bringing any material on record to suggest suppression of sales, merely on assumptions and presumptions sales cannot be estimated by alleging suppression of sales by assessee. More so, when it is a fact on record that assessee regularly files its VAT retu....