2026 (4) TMI 396

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....ssessment order dated 03.04.2023 passed under section 143(3) of the Income Tax Act, 1961 pertaining to Assessment Year 2022-23. The word 'Act' herein this order would mean Income Tax Act, 1961. The assessee has filed cross objection. 2. The Revenue has raised following grounds of appeals:- "1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in applying NP rate instead of GP rate when there is no evidence, found in search or submitted by the assessee, that indirect expenses have been made by the assessee in cash and not recorded in books of account? 2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in applying NP rate instead of GP rate when the ben....

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.... Act, 1961 (hereinafter referred to as 'the Act'). The assessee company i.e. M/s Essentia Designs Private Limited is engaged in the business of sale, purchase, trading, manufacture, installation, consultation and designing of furniture, fittings and modular kitchens. The assessee company has two (2) directors namely Sh. Hardesh Chawla and his wife Smt. Monica Chawla. A Search & seizure operation u/s 132 of the Act was conducted on 09.02.2022 by the Investigation Wing, Delhi of the Department, on M/s Adrem (India) Private Limited and its Directors, Sh. Hardesh Chawla and Smt. Monica Chawla, during which, a cash amount of Rs. 1.84 crores was seized from the various premises of M/s Adrem (India) Private Limited and its DirectoRs. Durin....

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....e entire FY, the details of the said customers were not recorded. He also admitted that the cash of Rs 1.88 crore found from his premises during search action also is a part of the above receipt. In response to AO's queries regarding the said unaccounted sales, the assessee submitted vide letter dated 13.02.2023, that the statement of Sh. Hardesh Chawla has since been retracted by him by filing an affidavit to that effect on 17.10.2022, and that therefore the statements did not carry evidentiary value. The ld. AO rejected the retraction made by Mr. Chawla and held that the assessee had indeed made unaccounted cash sales of Rs. 9,82,29,444/-. He estimated a gross profit @25% on the impugned sales so as to make addition of Rs. 2,45,57,361/-. ....