TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1007
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....s), instead of Rs. 2,48,27,214/- (being quantum of unaccounted sales inclusive of cost of unaccounted purchases and gross profit on unaccounted sales in the assessment order. 2. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in facts and in law in not considering the judgment of jurisdictional Hon'ble High Court of Delhi in the case of Commissioner of Income-tax v. Ajay Kapoor in IT Appeal No. 155 of 2011 dated 24.07.2013 wherein it was held that where there were unaccounted sale transactions, onus was on assessee to establish that unaccounted investment in purchases was out of unaccounted sales and in case of failure on the part of the assessee to discharge the onus, addition of unaccounted purchases was justified and in the instant case, the assessee did not explain the source of investment in purchases in assessment and appellate proceedings. 3. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in facts and in law in concluding that only gross profit on unaccounted sales was taxable, inferring that taxation of unaccounted purchases was not required, without appreciating the fact that unaccounted sales....
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.... evidence to rebut the calculations/working of the Assessing Officer and that the Ld. CIT(A) did not find any reason to defer with the amount as undisclosed credited entries of Rs. 2,48,27,214/- worked by the Assessing Officer on the basis of the pocket diaries found and seized from the locker. But the ld. CIT(A) has also made observation that pocket diaries found during the search are recorded in running fashion along with dates, credit entries, debit entries, deposits in bank and carry forward balances to the next date. It would not be fair to ignore debit side entry and take cognizance of only credit entries. He has further noted that there was no finding by the AO in this case regarding the suppression of investment in the stock/purchases lead to undisclosed sales. It is noted that the appellant is engaged in the business of trading of rice and bardana and no mismatch in the quantitative details / stocks were pointed out in its books, it is therefore fair to conclude that the appellant has not recorded purchases corresponding to the undisclosed sales as well. Therefore, once the AO arrived to a finding that the sales amounting to Rs 2,48,27,214/- were unaccounted, he was suppos....
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....ked out by the Ld. AO in the respective year tabulated as under: A.Y. Turnover Gross Profit GP Rate of the Year Undisclosed Credit Entries Undisclosed Income 2013-14 59,90,74,536 1,44,87,775 2.42% 2,48,27,214 6,00,819 2014-15 61,14,24,198 1,46,29,687 2.39% 14,70,933 35,155 2015-16 63,27,92,976 1,55,97,219 2.46% 2,29,32,944 5,64,150 2016-17 71,13,92,867 1,77,24,478 2.49% 55,03,601 1,37,040 2017-18 79,03,13,657 1,98,32,296 2.51% 13,75,291 34,520 2018-19 80,68,88,684 2,27,87,276 2.82% 44,86,798 1,26,528 4,15,18,86,918 10,50,58,731 6,05,96,781 14,98,212 5.3 The Ld. CIT(DR) contention has merits that the ld. CIT(A) has failed to appreciate the merits of the case and erred in law on facts and restricting the unexplained credit entries to Rs. 6,00,819/- as against the unaccounted credit entries computed by the Assessing Officer at Rs. 2,48,27,217/- considering the judgment of Hon'ble Delhi High Court in the case of Commissioner of Income-tax v. Ajay Kapoor in IT Appeal No. 155 of 2011 dated 24.07.2013, wherein it was held that whe....
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....ur view, the ld. CIT(A) order is infirm and perverse to the fact on record in concluding that only gross profit on unaccounted sales was taxable, inferring that taxation of unaccounted purchases was not required. Having said as above, the issue now arises that what shall be the profit on these unaccounted sales found recorded in the pocket diaries and what was the initial investment in the purchases for the purpose of admitted unaccounted sales turnover of Rs 2,48,27,214/- as per record is to be computed by the AO after affording due opportunity of being heard to the assessee. Accordingly, the order of the CIT (A) on this issue is set-aside and restored to the file of the AO to adjudicate the same afresh in accordance with law. 6. In Ground no.4 the department has challenged that the ld. CIT(A) has not considered the applicability of the provisions of section 40A(3) of the Act on unaccounted expenses corresponding to unaccounted sales of Rs. 2,48,27,214/-. 6.1 This ground of appeal does not emanate out of the impugned order and therefore, it is rejected as not maintainable. 7. The ground No. 5 and 6 are interlinked to each other where the department objected to the order o....