Case Law Details
Brief of the Case
In the case Shri B L Dasraj Urs Vs. ITO the Hon’ble Bangalore ITAT held that show cause notice u/s 274 is defective if it does not spell out the grounds on which penalty is sought to be imposed.
Facts of the Case
The assessee is an individual engaged in the business of manufacturing of office stationery products. A Survey was conducted u/s.133A of the Act in the business premises of the Assessee on 25.1.2008. In the course of survey certain bank accounts in the name of the Assessee were found. The transaction entries in this bank accounts were not recorded in the books of accounts maintained by the Assessee for AY 2004-05 to 2007-08. The Assessee explained that the bank accounts evidence unaccounted sales. The Assessee claimed that only the gross profit on these unaccounted sales can be added as income of the Assessee and not the entire sales. The claim of the Assessee was not accepted by the Revenue authorities and the entire sale value was treated as income of the Assessee and brought to tax in AY 2004-05 to 2007-08. On appeal by the Assessee, the Hon’ble ITAT held that only gross profit can be subjected to tax and not the entire sale value.
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