Swati Industries Vs DCIT (ITAT Chandigarh)
ITAT Chandigarh held that extrapolation of wages for the whole year cannot be sustained the same is to be restricted to the evidence found during course of survey. Accordingly, appeal of assessee allowed.
Facts- The assessee is engaged in the manufacturing of Scaffolding items. During the course of survey, assessee had surrendered Rs. 1,60,00,000/- on account of difference in sale price of scrap and as per actual sale amount and sales price as booked in the books of accounts and difference in wages and salary as per books of accounts and as found during survey. AO taxed the said surrendered amount under the provisions of section 115BBE of the Income Tax Act. CIT(A) allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
Further, assessee has preferred the present appeal contesting that CIT(A) has erred in confirming the action of the Assessing Officer in extrapolating the wages for the whole year, rather that restricting the addition upto the date of survey i.e. on upto 08.10.2018 and, as such, extrapolation of wages after the date of survey was not required to be made at all and for which, there was no such evidence at all. That on such extrapolation of the wages for whole of the year and sustaining of addition of Rs. 1,02,10,256/- and taxing the above amount as per provisions of section 115BBE is not called for.
