ACIT Vs YPA Restaurant Pvt Ltd (ITAT Delhi)
ITAT Delhi holds extrapolation beyond seized period invalid – ₹3.74 crore addition on Alleged Suppressed Profit deleted as post-search income not supported by evidence- Suppression Must Be Proven, Not Presumed – Additions Without Seized Material Unsustainable- Tribunal Rejects AO’s Projection for Post-Search Months
Revenue filed appeal against the order of CIT(A)deleting addition of ₹3,74,62,677/- made by AO on account of alleged suppression of profit in the case of YPA Restaurant Pvt. Ltd., a company forming part of the Sukhija Group of Restaurants.
A search & survey operation was conducted on 22.10.2016 at the business & residential premises of the Sukhija Group where various documents, hard disks & tally data were found evidencing undisclosed cash sales & unrecorded receipts from investors. The promoters of the Group, along with their associated companies, approached the Settlement Commission u/s 245C(1) for A.Ys. 2011-12 to 2017-18, owning up all unaccounted receipts & payments. The Interim Settlement Board determined additional income at ₹19.21 crore vide final order dated 23.06.2023.
In consequence, AO completed assessment u/s 143(3) for A.Y. 2017-18 & found suppressed sales of ₹4.91 crore up to 22.10.2016 with corresponding profit of ₹56.74 lakh. AO further extrapolated the same trend for the balance period of the financial year & added ₹3.74 crore as suppressed profit, holding that similar pattern would have continued after the search date.
