Gangadhar Agarwal Vs ITO (ITAT Hyderabad)
ITAT Hyderabad held that alleged discrepancy i.e, the suppression of the purchases/sales/closing stock based on distorted figures by AO resulting to an exorbitant addition is unsustainable in law. Accordingly, appeal of assessee allowed.
Facts- The case of the assessee was selected for scrutiny assessment. A.O., after considering the reply of the assessee, observed that the Trading, Profit & Loss account uploaded by the assessee of items, viz. MOP, PPL MOP, 10.26.26, 12.32.16, CIL Super G, ZIL 10.26.26, CIL Super D, CIL MOP, ZIL MOP, RCF MOP, IFFCO 10.26.26, SIL 10.26.26, Deepak MOP, Kribbco MOP, ZIL 10.32.16 revealed a quantitative suppression of a value of Rs. 5,19,17,599/, viz. (i). suppressed purchases; and (ii). sales without purchases. Thus, the A.O. made an addition of Rs. 5.19 crore by treating it as unexplained expenditure u/s 69C or unexplained money u/s 69A of the Act.
CIT(A) approved the view of the AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that the glaringly distorted quantitative facts/figures taken by the A.O. had resulted to the drawing of the alleged discrepancies in the form of suppression of purchases, sales, and closing stock aggregating to Rs. 5.19 crore (supra) in the hands of the assessee. We are unable to comprehend the very basis for the adoption of the distorted figures by the A.O., based on which he has drawn adverse inferences, both regarding the parent items and the brands/sub-heads (of the parent items) in the hands of the assessee, resulting to an exorbitant addition of Rs. 5.19 crore (supra) in the hands of the assessee.
