TaxTMI 
TaxTMI 
2025 (7) TMI 1846
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rs. 14,54,196/- was there and in another trial balance, cash in hand was of Rs 7,07,625/-, however, no cash in hand was found at the premise of assessee firm during the course of survey operation. (iii) On account of discrepancies in the books of accounts, the assessee firm had agreed to declare taxable income of Rs. 2.00 Cr. in its ITR for F.Y. 2017-18. (iv) On perusal of the ITR and P& L account of the assessee firm, it is seen that its turnover, GP & NP have substantially fallen during the F.Y. 2017 18. (v) Despite availing sufficient opportunities, books of accounts and bills & vouches for verification have not been furnished by the assessee. 2. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing the AO to tax the surrendered amount on normal rate without appreciating the fact that the assessee disclosed the surrendered amount in its ITR under the head "Income From Other Sources" and the same was set off by the assessee firm against its business losses and further since the assessee firm failed to disclose the source of the said surrendered income, the provisions of section 115BBE are applicable in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t were looked into. The accounts of the assessee firm were audited and copy of audit report along with Profit & Loss A/c and Balance Sheet was furnished. 3. In this case, a survey operation u/s 133A of the Income Tax Act, 1961 was conducted on 28/02/2018 and various documents, register & loose papers were found and impounded. During the course of survey, verification of physical stock was done. After verification, excess stock was found at the premises of the assessee firm in comparison to the stock in the books of the assessee company. Also, in Trial balance, cash of Rs. 14,54,196/- was there and in another Trial balance, cash in hand was of Rs. 7,07,625/-. However, no cash in hand was found at the premises of the assessee firm during the course of survey operation. On account of discrepancies in the books of accounts, the assessee firm had agreed to declare taxable income of Rs. 2 Crore in its ITR for F.Y. 2017- 18. However, in its ITR, the assessee firm has shown amount of only Rs. 1,30,00,000/- under head 'Income from Other Sources' and that has also been set off against the business loss of Rs. 90,99,960/- declared in its ITR for A.Y. 2018-19. On perusal of the ITR an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... they had to shift to steam coal. However, apart from the Hon'ble Supreme Court's order, no cogent evidence of use of steam coal or additional expenses on consumption of power has been produced. Also, if the direct expenses have increased, these should also have been reflected in financials of subsequent year. However, in F.Y. 2018-19, the assessee firm is showing GP of 15.05% and NP of 2.24% which is much more than GP and NP of any previous year of the assessee firm. Thus, the reasoning given by the assessee firm is not acceptable. Also, the assessee firm has not produced its books of accounts for verification which clearly shows that the assessee firm is manipulating its books of accounts to suppress its profits. The loss has been shown in order to set off the same against the surrendered amount of Rs. 1,30,00,000/- as shown in income from other sources. 3.3 In view of the facts mentioned above and the noncompliance of the assessee firm with respect to production of books of accounts like sales register, purchase register and stock register for verification, it is deemed fit to re-compute NP of the assessee firm as per NP ratio of the assessee firm for F.Y. 2018-19 which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been explained in detail by the appellant. In the survey proceedings it has been found that the appellant was maintaining its books of accounts at Tally software. The hard disk of the same was impounded by the survey team during the survey along with the purchase and sale bills and other loose papers. The stock difference of Rs. 2,48,850/- has been explained by Sh. Ravindra Jain that the difference was mainly on account of wrong mentioning of quantity at item no. 8 as the actual physical quantity was 7000 mtrs. but the same was recorded as 700 mtrs. in the physical verification sheet and due to this the value of stock was computed short by Rs. 2,06,500/- and balance amount of Rs. 42,350/- was on account of estimation made by the partner. In the matter of shortage of cash it was explained that the cash was kept at the residence of the partner. The partner of the appellant firm had surrendered a sum of Rs. 2,00,00,000/- during the survey as business income to buy the peace of mind. During assessment proceedings, the reasons of lower turnover, GP & NP rate were explained. It was submitted that the turnover during the year of own product was lower at Rs. 394.36 lacs as compare....
X X X X Extracts X X X X
X X X X Extracts X X X X
....estimate NP without rejecting books of accounts was premature and hence the same cannot be sustained. 6.12 Looking to the facts and circumstances of the case, addition of Rs. 1,00,55,208/- made by estimating NP @2.24% is hereby deleted. All the concerned grounds of appeal are adjudicated accordingly. 6.13 In the matter of invoking provisions of section 115BBE of IT Act on the surrendered income of Rs. 1,30,00,000/- it is observed that the appellant claims that the same was offered as 'business income'. In the appellate proceedings, Ld. AR submitted that this income was undisclosed business income and was surrendered under the same head and the same was accepted by the survey team accordingly. Ld. AR submits that inadvertently this surrendered income of Rs. 1,30,00,000/- was included as 'income from other source' while filing ITR of AY 2018-19. Ld. AR submits that in this situation also the provisions of section 115BBE of IT Act cannot be invoked. It is submission of Ld. AR that unless some addition is made u/s 68/69/ 69A/ 69B/ 69C/ 69D of IT Act, the provisions of section 115BBE cannot invoked. Ld. AR submits that neither the appellant has offered this income ....