TaxTMI 
TaxTMI 
2025 (10) TMI 834
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.... A.Y. 2013-14 2. The assessee has raised the following grounds of appeal : " 1. The order of the CIT (Appeals)-11, Hyderabad dated 30-07-2024 is erroneous both on facts and in law to the extent it is prejudicial to the interests of the appellant. 2. The Ld. CIT (Appeals) erred in allowing the appeal in part. 3. The Ld. CIT(Appeals) erred in dismissing ground nos. 2 to 5 and 8 taken before him. 4. The Ld. CIT(A) grossly erred in confirming the A.O's treatment of Rs. 14,41,96,147/- as supressed sales, over and above the sales turnover admitted in the Return of income, for the year under consideration. 4.1. The Ld. CIT(Appeals) has erred in holding that the supressed sales turnover- figure arrived by the A.O at Rs. 14,41,96,147/- does not get altered and holds good. 4.2 The Ld. CIT(Appeals) grossly erred in not appreciating the appellant's submissions with regard to the correctness of the turnover admitted in the return of income for the year under consideration. 4.3 The Ld. CIT(A) ought to have appreciated that the assessee has maintained Books of Accounts as per Section 44AA of the Act and that it is duly audi....
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....ed in the case of the assessee and M/s. Kolors Healthcare LLP on 30.10.2019. Notice u/s.153A of the Act dated 20.09.2020 was issued to the assessee and in response the assessee filed the ROI on 20.02.2021 by admitting the total income as mentioned in the original ROI i.e. Rs. 1,31,81,020/-. Subsequently, the assessment u/s.143(3) r.w.s. 153A of the Act was completed by the Learned Assessing Officer ("Ld. AO") on 30.09.2021 determining the total income at Rs. 15,73,77,167/-. The addition of Rs. 14,41,96,147/- was made by the Ld. AO on account of solitary issue of suppressed sales. 4. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the amount of the quantum of suppressed sales at Rs. 14,41,96,147/-. However, the Ld. CIT(A) restricted the addition to 15% of the amount of suppressed sales, contending that some expenses are also incurred in cash in relation to suppressed sales. 5. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. The revenue had also filed C.O. in support of the order of Ld. CIT(A) raising the following grounds : " (1) The assessee contested that Ld.CIT(A) erred in co....
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..... 14,41,96,147/- is not correct and is at higher side. Therefore, he requested the bench to consider the amount of suppressed sale at 50% of Rs. 14,41,96,147/-. 7. With regard to second issue, the Ld. AR brought our attention to the page no. 135 of the order of Ld. CIT(A), wherein the details of year-wise percentage of net profit offered by the comparable companies in the same business are available. The Ld. AR submitted that the percentage of net profit in case of those comparable companies varies from (-) 9.2% to (+) 9.25% and accordingly, he prayed before the bench to take the average of percentage of net profit of comparable companies in the case of assessee. 7.1 In their alternate submission, the Ld. AR submitted that the net profit percentage of 15% taken by the Ld. CIT(A) is on higher side. The Ld. AR also brought our attention to page no. 136 of the order of Ld. CIT(A) where, in the remand report, the Ld. AO has calculated the average percentage of net profit of the assessee at 7.22%. The Ld. AR submitted that huge amount of cash expenditure has been incurred by the assessee out of the amount of suppressed sales which has not been recorded in the books of account. The....
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....huge fluctuation in the percentage of net profit of the comparable companies. Therefore, the Ld. DR submitted that the net profit percentage of the comparable companies cannot be taken in the case of the assessee. 9.1 With regard to the alternate claim of the assessee regarding considering the net profit percentage of 5%, the Ld. DR submitted that, most of the administrative and other expenses must have already been recorded in the books of account of the assessee and have already been claimed by the assessee. Therefore, the Ld. DR prayed before the bench to uphold the net profit of 15% taken by the Ld. CIT(A). 10. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. As far as the claim of the Ld. AR with regard to duplication in the seized Excel sheet for credit cards and RTGS receipts from clients is concerned, no such specific instances has been brought to our notice by the Ld. AR. To the contrary, the Ld. DR submitted that the inaccuracy / mistakes / duplication in data in the seized Excel sheet has already been considered by the Ld. AO in his order. In support of her contention, the Ld. DR brought our a....
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.... 2,83,800 69,19,011 10 BTM - 1,10,183 3,18,154 35,14,427 39,42,764 11 Adyar - 6,64,492 16,99,175 7,43,010 31,06,677 12 TRICHY - - 21,69,121 15,49,928 37,19,049 13 TIRUPATI - - 2,81,765 10,35,459 13,17,224 14 MADURAI - - - 14,96,062 14,96,062 15 MYSORE - - - 2,11,222 2,11,222 Total 3,43,11,863 3,66,14,140 3,16,89,736 2,34,83,190 12,60,98,929 10.2 We also found that, the Ld. AO at page nos.56 to 58, para nos.10.4.3 to 10.4.3.4 of his order merely relied upon the observation made by the investigation wing to the following effect : " 10.4.3 The third contention of Sri Vijaya Krishna is that the amounts in 'total paid' columns in collection reports were 'cumulative' figures and the total arrived during the search is much higher than the original values. In support, he has also furnished some of the entries which are getting cummulated in the total paid' column of the sales reports. 10.4.3.1 During the course of search operation, after retrieving the collection reports from the Google ....
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.... KHIL -Rs. 77,18,16,709/-) is reduced from the Total paid column. 10.2 However, the similar contentions were raised by the assessee before the Ld. CIT(A) placed at para nos.12.2.1 to 12.2.2 of the order of Ld. CIT(A), which are to the following effect : 12.2.1. During the course of appeal proceedings also the appellant made similar objections and submissions as were made before Investigation wing and Assessing Officer. During appeal proceedings appellant filed a paper book containing 301 pages. This paper book was forwarded to the AO for examination and furnishing a report thereof. The AO vide letter dated 28.07.2022 forwarded the report, the relevant para pertaining to the grounds of appeal no. 4.4 to 4.6. is as below: "8. The Paper Book submitted by the assessee and forwarded by the Ld. CIT(A) has been verified and found that the assessee has reiterated the same issues as raised during the assessment proceedings and no new evidence has been produced. It is once again submitted that the repeated transactions as claimed by the assessee have different invoice numbers as per S&S Data. The payments were made on different dates and the amounts paid on these days we....
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....s made by the assessee does not have any substance and the same deserve to be rejected." The assessment order, grounds of appeal no. 4.4 to 4.6, written submissions of the appellant, Report submitted by the AO have been carefully examined. The grounds of appeal no's 4.4 to 4.6 are dealt as follows :- 12.2.2. As far as the issue in ground of appeal no. 4.4 i.e. total paid columns in collection reports were cumulative figures and thus there is an arithmetical inconsistency, the Investigation Wing observed that the figures/amounts in 'total paid' column were accumulating automatically in respect of some of the customers. Therefore, it was decided to sum up the modes of payments of the columns of the collection reports to arrive correct sales turnover. The sales as per 'total paid' column was Rs. 30,29,74,644/- and sales as per modes of payment was arrived to Rs. 24,42,43,397/-. There was a difference of Rs. 5,87,31,247/-. The gross sales suppression of Rs. 14,41,96,147/- for the impugned A.Y. 2013-14 was arrived on the basis of sales as per modes of payment i.e. Rs. 24,42,43,397/-. That is to say that Investigation Wing partly agreed the contentio....
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....for considering percentage of net profit at 5%. The Ld. AR submitted that the assessee has incurred huge cash expenditure out of the amount of suppressed sales which had not been recorded in their books of account. The assessee had raised the same arguments before the Ld. CIT(A) also, relevant portion of which are placed at page no. 53 and 54 of the order of the Ld. CIT(A), which are to the following effects : 5. Further in addition to the above categorization relating to utilization of suppressed cash sales for the purpose of personal expenditure, the Ld. AO vide para no. 15.5 to 15.7 page no. 134 to 155 has made following consolidation of expenditure utilized for the purpose of generating alleged suppressed cash sales: Direct & Indirect Expenditure out of alleged suppressed cash sales: i. For instance, details of certain direct & indirect expenditure for some of the branches as determined by the Ld. AO from the seized material found during the course of search are tabulated below for your kind reference: Seized Materials reference Asst. Year Amount (Rs.} * Attapur branch Annexure - A/KHL/Att/01; * BTM Layout - Annexure-A/133A/KHC/01; *....
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....ke (1) Sales details (2) Office Expenses (3) Vrjay Sir (a) Salaries (5) Incentives (6) SD. From Excel sheets it was noticed that cash sales of each branch was going to Sri Vijay Krishna, MD and from such receipts he was spending cash for office expenses, guest house expenses, construction expenses, expenses on shooting for advertisement, expenses on dubbing, personal expenditure, etc. 9.4.2. It was also found that the expansion work of branches was carried out and the relevant payments for such expansion were made in cash. Further, it was also found that the management of Kolors group was fixing targets to the branch managers and the sales counsellors for every month and huge cash incentives were paid to the branch managers and sales counsellors who had achieved the targets. It was observed that the cash incentives were borne by the Kolors group from its cash sales. Incentives and Bonus were paid to employees involved in sales booking. These payments were met out of the sale receipts in cash. Further, it was also observed that advertisement I shooting expenses and Brand Ambassadors were paid in cash out of unaccounted cash sales of the branches." Hence, there is no disp....