INDUSTRIAL AND MINING ASSOCIATES,RANCHI vs. ITO,WARD-2(4), RANCHI

The assessee’s former substantive grievance challenging correctness of both the lower authorities’ action adding an amount of Rs.1,01,66,177/- as its alleged unexplained investment for acquiring two residential flats in the relevant previous year. Learned departmental representative referred the assessment and lower appellate findings making the impugned addition after Industrial & Mining Associates Vs. ITO Wd-2(4), Ranchi Page 2 quoting assessee’s failure in explaining source of the impugned unexplained investment. Case record, more particularly page 1 (assessee’s paper book), suggests that this sum in dispute of Rs.1,01,66,177/- comprises of three head(s) of Rs.35,60,000/- Rs.6,06,207 and Rs.60,00,000/-; respectively. All these three heads also reveal corresponding date-wise details starting from 12.04.2014 to 11.10.2014. Learned DR at this stage referred to the CIT(A)’s findings declining the assessee’s plea of its additional evidence. Her case therefore is that the Assessing Officer must be given at least an opportunity to consider all these factual aspects. We see no reason to accept the Revenue’s foregoing argument. The fact remains that the foregoing three head(s) form- part of assessment records right from scrutiny till date. The corresponding details of date-wise payments which had earlier been recorded as “sundry creditors” are now shown under the head “land and building”. We hold in these facts and circumstances that the impugned addition of unexplained investment of Rs.1,01,6,177/- is not sustainable. The same is directed to be deleted.

Next comes the latter issue of gross profit addition amounting to Rs.10,42,789/- @ 9.48% qua assessee’s alleged non-disclosed turnover of Rs.1,09,99,879/-. We see no reason to sustain this later addition as well since page 13 of the assessee’s paper book indicates non-trading turnover of Rs.91,22,750/- comprising of various banking transactions through cheques and cash. All the foregoing figure(s) have gone unrebutted from the Revenue side. The same also include credits in bank accounts other than relating to sales of Rs.91,22,750/- and excess credit for Rs.21,26,640/-. We thus hold in these facts and circumstances that the learned lower authorities have erred in taking non-trading transaction as trading ones thereby adding the impugned gross profit element. This latter addition is also directed to be deleted therefore. Necessary computation including that of interest to follow as per law.