DCIT Vs Late Ramesh Pannalal Ranawat (ITAT Mumbai)
ITAT Mumbai held that addition towards unexplained stock cannot be sustained merely relying on the statement without any corroborative evidence. Accordingly, addition set aside and appeal allowed.
Facts- On 10.04.2014, the Air Intelligence Unit, intercepted a person named Shri Yashwant Ganpat Rao Gujjar, who was carrying about 11912.400 gms of gold ornaments. On being questioned, the concerned person stated that the jewellery belongs to M/s. Ramesh Zaveri & Co. and it was being transferred to the branch at Cuttack. Thereafter, survey u/s. 133A of the Act was conducted at the shop premises of M/s. Ramesh Zaveri & Co. at Cuttack by the DDIT, Cuttack on the very same day, i.e., 10.04.2014. Based on the statements recorded from the aforesaid persons as well as CCTV footage from 31.03.2014 to 10.04.2014 taken from the shop premises at Cuttack, the DDIT, Cuttack reported under-reporting of sales and consequential tax evasion.
Applying the gross profit rate of 13.64% allegedly reported by the Cuttack branch, he determined the unexplained stock at Rs.98,92,329/- and proposed the amount for addition. In nutshell, the A.O. made aggregate addition of Rs.10,91,70,289/-.
CIT(A) rejected the A.O.’s allegation of undisclosed sales and, thereby, deleted the addition made of Rs.9,92,77,960/-. Being aggrieved, revenue has preferred the present appeal.
