2016 (1) TMI 1530

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....t in relying upon the case laws mentioned in appellate order though the facts of the case differ. 2. Whether on the facts and in the circumstances of the case the CIT(A) is correct whether income from unaccounted sales is to be estimated at GP rate inspite of the fact that the cost price of all the purchases, including the purchases corresponding to the unaccounted sales have been debited to the Trading Account. 2. In this case a survey was conducted at the business premises of the assessee on 12-11-2008. Unaccounted sales were detected during the course of survey. Subsequently vide letter dated 29-01-2009 submitted by the assessee after the survey, the assessee has admitted before the AO that there were certain unaccounted sale....

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....dditional funds would have been flown in (as profit) over the years through sale of such "unaccounted sales (over the past year) and the assessee has worked out this value at Rs. 5,69,644/-, finally stating that it would have required a fund of Rs. 13,92,441/- - 5,69,644/- = Rs.8,22,797/- for the year under consideration. As per assessee this amount was already generated by it in the preceding 2 years (again through such un recorded sales vide the working given by assessee annexed to this order, as Aannexure-2) and hence no extra funds would have been required for the current years. It is assessee's argument that it only needs to declare the profit component of Rs. 5,69,700/- as additional income for the current year. The return of....

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....s specified above. On reducing the GP of Rs.569644/- from the above figure the net investment required comes to Rs. 822797/-. As per the working given by the assessee for the 3 financial years the income already surrendered in the earlier assessment years would go to explain the source of the said net investment amounting to Rs.822797/- and it is for this reason that no disclosure is required to be made by the appellant on account of investment. It is important to note that this working was given by the appellant to the department soon after the survey. A consistent method of working out the unaccounted income was adopted by the appellant and it was on this basis only that the income was offered to tax by the assessee for all the 3....