Скачать с ютуб Whether addition u/s 69A or addition on some percentage basis is justified for unaccounted sales? в хорошем качестве

Whether addition u/s 69A or addition on some percentage basis is justified for unaccounted sales?

Link of full case : https://taxlawsonline.com/agtlol.html... (2025) 130 ITR (Trib) 198 In the Income Tax Appellate Tribunal1 (BEFORE T.R. SENTHIL KUMAR, MEMBER (JUDICIAL) AND MAKARAND V. MAHADEOKAR, (ACCOUNTANT MEMBER)) Shah Foils Ltd. v Income-tax Officer (and vice versa) I.T.A. Nos. 1852 and 1922/Ahd/2019 (assessment year 2011-2012) Decided on January 31, 2025 Playlist: 69A, 148, Unaccounted Sales Sec 69A: Unexplained money, etc Sec 148: Issue of notice where income has escaped assessment A.Y. 2011-12/Assessee/Department Question: Whether addition u/s 69A or addition on some percentage basis is justified for unaccounted sales? 1) Based on the incriminating evidence obtained during the search at the factory-cum-office premises of P, it was concluded that the assessee-company, engaged in manufacturing SS Cold Rolled Coils/Strips, was involved in clandestine cash receipts for unaccounted sales of SS Strips. 2) The commission agent, who was involved in making unaccounted cash payment to the assessee, confirmed the transaction recorded in the seized diary. 3) The assessee, being a registered excise unit maintaining proper audited books of account, denied unaccounted cash receipts but failed to provide substantive evidence to counter the findings. 4) The AO, on the basis of seized documents, third-party statements and search finding of the Director General of Central Excise Intelligence had reason to believe that income had escaped assessment. 5) He reopened the assessment under section 147 of the Income-tax Act, 1961 and made addition of such unaccounted sales under section 69A. 6) The Commissioner (Appeals), while agreeing with the view of the Assessing Officer, held that the entire amount of unaccounted sales could not be taxed as income. 7) On the ground that the unaccounted transactions involved reduced expenses, deemed it reasonable to apply a higher rate of 6 per cent. to the unaccounted sales figure and restricted the addition. 8) Both revenue and assessee filed cross appeals: 9) It was held that the lower authorities had rightly concluded that the information from the Director General of Central Excise Intelligence evidencing cash payments through the seized diary, corroborated by multiple statements, constituted fresh tangible material to form the requisite “reason to believe” that income had escaped assessment, thereby justifying the issuance of notice under section 148. 10) The Assessing Officer acted on specific, credible information of unaccounted transactions and the assessee did not demonstrate any procedural infirmity that the AO’s belief was based on mere suspicion or conjecture. 11) The Assessing Officer had relied on multiple sources of evidence, including the statements of key personnels from P detailing cash payments to the assessee, which aligned with entries in the seized diary, and had rightly applied section 106 of the Evidence Act, 1872, shifting the burden onto the assessee to explain the nature and source of the cash receipts, which it failed to do. 12) The Assessing Officer's rejection of the assessee's contention was supported by judicial precedents where unaccounted transactions were inferred from circumstantial evidence and cash-trail analysis. Sumati Dayal v. CIT, (1995) 214 ITR 801 13) The CIT (A) had adopted a profit margin of 6 per cent. based on the assessee's reported financials and general industry trends. 14) The CIT(A) had not examined whether the profit margin of 6 per cent. was reflective of the actual earnings from such clandestine transactions. 15) He had not analysed profit margins over multiple years nor compared them with industry benchmarks. 16) Considering that the assessee was involved in such transactions as claimed by the Director General of Central Excise Intelligence, there exists a possibility that the corresponding purchases and expenses relating to these unaccounted sales were recorded in the books under different accounting heads, effectively reducing the actual profit margin. 17) Had such purchases too been unaccounted, the profit percentage would have been significantly higher. 18) However, in the absence of any verification of the industry's actual margins and considering that the Commissioner (Appeals) had relied on the financials within the accounting period under review, the estimation of 6 per cent. profit was found to be a reasonable and fair approximation of the assessee's profit from these unaccounted sales. #ShahFoil #ahemdabad #HighCourt #31January #2025 #Section69A #Section148 #UnaccountableSales #IncomeTaxNotices #IncomeTaxCases #incometaxcasesanalysis #IncomeTaxLaw #advocateamitkumargupta #9811291390(Call only after taking time on whatsApp) #[email protected] #[email protected] Link for some important videos: