TaxTMI 
TaxTMI 
2023 (3) TMI 758
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.....2019 2,31,83,990 3. There was a search and seizure conducted u/s. 132 in the case of Sri Podili Ravi Shankar & Ors. on 24.4.2018 and a warrant of authorisation was issued in the name of assessee. During the course of search, at the premises of the assessee, documents showing unaccounted sale of jelly, M sand and dust were found and seized. Vouchers evidencing unaccounted purchases of boulders were also seized. In a statement recorded u/s. 131 the assessee accepted that neither the purchases nor the sales for which evidence were found were accounted in the books of accounts. The assessee accordingly accepted the additional income from the Crusher Unit by filing return of income u/s. 153A for the impugned AY including the income offered during the course of search. 4. The AO while completing the assessment u/s. 153A r.w.s. 143(3), besides considering the additional income offered made a disallowance u/s. 40A(3). The AO held that the following payments were made in cash exceeding Rs.20,000 which is in violation of section 40A(3) and accordingly disallowed the same. AY Addition made u/s. 40A(3) [Rs.] 2016-17 67,54,114 2017-18 27,57,875 2018-19 3,29,35,....
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....e farmers through the tractor drivers who collect the payment and distribute the same to the farmers. There is no bank near the place of the crusher to make day-to-day payments and most of the farmers who supply the boulders do not have bank accounts. If the payments are not made in cash, the farmers refuse to supply the boulders to the Assessee. In this background, the ld AR submitted that the income from stone crushing business was declared by the Assessee only in the return of income filed in response to 153A notice and that the income declared by the Assessee is as per the turnover and profit computed by the Ld AO for which a specific query was raised while recording the statement under section 131 of the Act (refer page 2-3 AO order). It is submitted that the AO in the said computation has accepted that the Assessee purchases boulders which are the raw material for the stone crushing unit and after considering the purchase and the turnover the AO has estimated business income at 10% of the sales which has been accepted by the Assessee since he was not able to produce all the vouchers. The Assessee having accepted the income determined by the AO on estimation basis, then the AO....
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....onsidered a similar issue and held that - "All the three questions, referred to this court, revolve round the same controversy. The question for consideration is when no deduction was sought and allowed under section 40A(3), was there any need to go into section 40A(3) and rule 6DD(j). We see force in the view taken by the Appellate Tribunal that when the income of the assessee was computed applying the gross profit rate and when no deduction was allowed in regard to the purchases of the assessee, there was no need to look into the provisions of section 40A(3) and rule 6DD(j). No disallowance could have been made in view of the provisions of section 40A(3) read with rule 6DD(j) as no deduction was allowed to and claimed by the assessee in respect of the purchases. When the gross profit rate is applied, that would take care of everything and there was no need for the Assessing Officer to make scrutiny of the amount incurred on the purchases by the assessee. No law contrary to the view taken by the Tribunal has been shown by standing counsel. In the alternative, the Tribunal recorded a finding on the ingredients of section 40A(3) and rule 6DD(j). Since we h....
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.... 7,69,430 2017-18 2018-19 3,37,79,800 1,57,115 5,65,61,400 56,56,140 2018-19 2019-20 5,64,100 2,623 9,44,280 94,430 Total 5,13,54,505 2,38,856 8,59,88,160 85,98,820 Ans. I have gone through the above said estimation. I accept the business income from my crusher unit across financial years 2014-15 to 2018-19 as estimated above. 1 will declare this income over and above the business income already deduced by me for those years." In the return of income filed ills 153A. the assessee has offered additional income on account of undeclared profit of Rs. 15,19,670 estimated as above in the statement u/s 131, The reason for estimation was that the sales registers were not available for the year whereas purchase vouchers for boulders were available. During the year Rs. 90,75,941 was the expenditure incurred for the purchase of boulders for which purchase vouchers have been seized in A/PBK/02, A/PBK/03, A/PBK/04, A/1)BK/05 and A/PBK/06 for the period 01.04.2015 to 31.03.2016. The source for these purchases is stated to be sales made earlier and not accounted in the books. From these vouchers the average purchase ....