Pawan Kumar Agarwal Vs ACIT (ITAT Delhi)
10% GP Addition Enough on Unverified Cash Sales – ITAT Reduces Rs.1.50 Cr to Rs.15 Lakh- Stock & Cash Belonging to Sons’ Firm Not Taxable in Father’s Hands: ITAT Delhi
The appeals before Tribunal comprised cross appeals filed by Pawan Kumar Agarwal, proprietor of M/s Supreme Gold & by Revenue against the order of CIT(A) dated 19.10.2023.
A survey was conducted at Assessee’s premises on 20.07.2015 which was subsequently converted into a search. Cash of Rs.4.78 crore was found along with records of bullion transactions. In assessment framed u/s 143(3) r.w.s. 153A, AO made multiple additions comprising unexplained cash of Rs.4.78 crore, unexplained stock of 6 kg gold valued at Rs.1.54 crore, disallowance of hedging loss of Rs.22.48 lakh treating it as speculative, & GP addition of Rs.33.14 crore.
CIT(A) gave partial relief. He accepted Assessee’s explanation that Rs.2.05 crore was generated from cash sales of bullion by M/s Supreme Gold which were backed by genuine purchases from government agency HHEC & duly supported by invoices. He further held that Rs.1.27 crore in cash & stock of 6 kg gold valued at Rs.1.54 crore belonged to M/s HP & Sons, a partnership firm of Assessee’s sons, carrying on business from the same premises, & therefore could not be taxed in Assessee’s hands. However, CIT(A) confirmed addition of Rs.1.50 crore cash alleged to have been kept in safe custody of one Shri Vinod as unexplained. CIT(A) also allowed claim of hedging loss as genuine business transaction & deleted GP addition made by AO.
