In a survey conducted under Section 133A, it was noticed that the assessee has not accounted some of the sales in the total turnover. In the statement recorded at the time of survey, the Director of the assessee declared a sum of Rs.35 lakhs should be offered to tax. However, thereafter, the assessee explained the statement on the basis that the director was not aware of the intricacies and implications of the statement made by him. The AO rejected the assessee\u2019s explanation and assessed Rs.35 lakhs. On appeal the CIT(A) held that the entire Rs. 35 lakhs cannot be assessed as income but only 4% thereof, being the profit earned on sales of Rs.35 lakhs, could be added to the net profit. This was upheld by the Tribunal. Before the High Court, the department relied on Section 69C and argued that the entire amount of undisclosed sales had to be brought to tax. HELD by the High Court dismissing the appeal:<\/p>\n
We are unable to appreciate how Section 69C of the Act which speaks of unexplained expenditure is all at relevant for this appeal. We are not concerned with any unexplained expenditure in this case. In any view of the matter, the CIT(A) and Tribunal have came to the concurrent finding that the purchases have been recorded and only some of the sales are unaccounted. Thus, in the above view, both the authorities held that it is not the entire sales consideration which is to be brought to tax but only the profit attributable on the total unrecorded sales consideration which alone can be subject to income tax. The view taken by the authorities is a reasonable and a possible view. No substantial question of law arises.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"
The CIT(A) and Tribunal have came to the concurrent finding that the purchases have been recorded and only some of the sales are unaccounted. Thus, in the above view, both the authorities held that it is not the entire sales consideration which is to be brought to tax but only the profit attributable on the total unrecorded sales consideration which alone can be subject to income tax. The view taken by the authorities is a reasonable and a possible view<\/p>\n