M/S JAIKRISHNA FEBTEX PVT. LTD.,,WEST BENGAL vs. ITO,WARD-3(3), BOKARO STEEL CITY

The assessee’s former substantive ground challenges both the lower authorities’ action making estimated gross profit addition of Rs.2,78,724/- @16.72% qua shortage on stock of Rs.16,67,010/-; alleged to have been noticed during the course of survey. Learned counsel’s only case is that neither of the lower authorities have granted credit of either cash sales shown in the books or those recognised through electronic mode(s) of payments. This clinching plea has gone unrebutted from the Revenue side during the course of hearing. I therefore deem it appropriate that the instant former issue requires factual reconciliation at the assessment level. The same is therefore restored to the Assessing Officer for afresh adjudication as per law.

Next comes salary payment disallowance @ 5% made in both the lower proceedings only on the ground that the same had been paid in cash. This cash mode of payment has not been satisfactorily explained from the assessee’s side right from scrutiny till date. The fact also remains that neither of the learned lower authorities has taken note of the M/s Jaikrishna Febtex Pvt. Ltd. corresponding findings in preceding and succeeding assessment year. I therefore deem it appropriate in larger interest of justice that a lumpsum salary disallowance of Rs.50,000/- would meet the ends of justice with a rider that the same shall not be taken as a precedent. Necessary computation including that of interest to follow as per law.

This assessee’s appeal is partly allowed in above terms.