Ashwin Rajendra Bade Vs ACIT (ITAT Pune)
ITAT Pune held that application of cash received from unrecorded cash sales needs verification since assessee claims that it is applied for giving advance to the farmers for purchase of raw material and also for expansion of the existing showroom.
Facts- The assessee is an individual carrying on the business of manufacture of Furniture under the sole proprietorship concern M/s.J.M. Sales. Survey action u/s.133A of the Act was conducted on 06.02.2019 during which shortage of stock to the tune of Rs.79,96,450/-was found and the same was accepted by the assessee as unrecorded sales. During the course of assessment proceedings, ld. AO observed that the assessee has himself admitted and offered the additional income declared under the head ‘Income from other sources’ in his computation statement and paid due taxes.
Subsequently, the assessee preferred appeal before CIT(A) challenging the impugned addition of Rs.79,96,450/- and also challenging the action of the AO invoking section 69A r.w.s.115BBE of the Act. CIT(A) after considering the submissions recorded on survey was satisfied that the source of shortage of stock is unrecorded sales which is part of the business activity and therefore section 69A r.w.s.115BBE cannot be invoked and to this extent CIT(A) granted relief.
