2022 (7) TMI 1143

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....r: Grounds of Appeal "1. That on the facts of the case and under the law, the Id. CIT(A) has erred in upholding the Id A.O.'s action of rejecting the books of account of the assessee u/s 145(3). The Id CIT(A) has failed to appreciate that once the Id A.O. had not at all doubted the purchases, opening & dosing stock, expenses (direct & indirect) and even the G.P. Rate, there was no justification to reject the books of account u/s 145(3). 2. That on the facts of the case and under the law, the Id. CIT(A) has erred in holding that the extra profit computed by the Id A.O. at Rs.30,43,345/- [by applying the declared G.P. Rate of 1.69% on assumed extra sales of Rs.18,00,79,573/- (being 10% of the total sale....

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..... In this case, survey operation u/s 133A of IT Act was conducted on 30.09.2013. In the course of the survey, evidence of cash sales was found. The AO took adverse view of the evidence of cash sales. As discussed earlier, the AO estimated the quantum of unaccounted cash sales at 10% of the total sales, and applied gross profit rate of 1.79% on the estimated unaccounted cash sales, to estimate the aforesaid addition of Rs.30,43,345/- towards gross profit on unaccounted cash sales. The assessee filed appeal against the assessment order before the Ld. CIT(A). Vide impugned appellate order dated 26.12.2018, the Ld. CIT(A) confirmed the aforesaid addition of Rs.30,43,345/- and dismissed the assessee's appeal. The present appeal before us, has be....

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....ded to the learned CIT(A) by the assessee. The Ld. Counsel for the assessee submitted that the Ld. CIT(A) did not favourably consider the assessee's plea that the exercise of estimation of unaccounted cash sales should be restricted to period up to date of survey and quantum of addition should be restricted to gross profit on estimated unaccounted cash sales upto date of survey only. He contended that the learned CIT(A) could not counter this submission of the assessee company, yet he had arbitrarily confirmed the entire addition of Rs. 3043345/-. He also submitted that it was not a case where assessment order was passed u/s 144 (Best Judgment Assessment); rather it was a case where assessment order was passed u/s 143(3). Therefore, he cont....

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....) on aforesaid estimated unaccounted cash sales of Rs.6,52,76,733/- for the period from 1.04.2013 to date of survey (i.e. till 30.09.2013) (C.2.1) We have heard both sides. We have perused the materials on record. At the time of hearing before us, there is no material dispute between representatives of the two sides on the relevant issues. Both sides are in agreement that unaccounted sales from 01.04.2013 to 30.09.2013 may be estimated at the rate of 10% of recorded sales during the period. Both sides are in agreement that declared gross profit rate of 1.69% may be applied on estimated unaccounted cash sales from 01.04.2013 to 30.09.2013 to compute the unaccounted income of the assessee and that the same may be confirmed. Consistent with....