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| The Tax Publishers2020 TaxPub(DT) 2503 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where AO made addition for difference in total sales made during year and total cash deposits under section 68 considering fact that purchases and sales made by assessee (HUF) and other connected parties were routed through bank account of assessee, therefore, same could not be treated as sales and purchases of assessee.
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Income from undisclosed sources - Addition under section 68 - Purchases and sales made by assessee (HUF) and other connected parties were routed through bank account of assessee -
AO made addition on account of difference in total sales made during year and total cash deposits under section 68 on allegation that assessee failed to explain source of cash deposits in bank account. Assessee contended that purchases in individual capacity were also routed through HUF. Held: CIT(A) on examination of the record, accepted explanation of assessee that purchases and sales made by assessee of other connected parties since routed through bank account of assessee, therefore, could not be treated as sales and purchases of the assessee. Even if there was some excess sales declared by assessee, the entire sales could not be treated as unaccounted income of assessee. As against the undisclosed or unaccounted sales, only profit rate should have been applied to make the addition. Since transaction in the individual capacity were also routed through assessee HUF and were recorded in the books of account and sales and purchases were not disputed by AO, order of CIT(A) did not warrant interference.
REFERRED : CIT v. Balchand Ajit Kumar (2003) 263 ITR 610 (MP) : 2003 TaxPub(DT) 1199 (MP-HC) National Industrial Corporation Ltd. v. CIT (2002) 258 ITR 575 (Del) : 2002 TaxPub(DT) 1598 (Del-HC) CIT v. President Industries (2002) 258 ITR 654 (Guj.) : 2002 TaxPub(DT) 0056 (Guj-HC)
FAVOUR : In assessee's favour
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 37(1)
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