THE DCIT, CENTRAL CIRCLE-3, SURAT vs. SHRI MEHUL T. DESAI, SURAT

ITA 350/AHD/2017Status: DisposedITAT Surat13 December 2018AY 2014-159 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, agreeing that only the profit embedded in the suppressed receipts should be added to the income, not the gross receipts. The CIT(A)'s estimation of profit, considering the assessee's disclosure and historical profit margins, was deemed reasonable.

What were the facts?

During a survey, unaccounted receipts of Rs. 1,62,77,798/- for six months were found. The AO extrapolated this to the whole year, calculated total unaccounted receipts at Rs. 3,25,55,596/-, and added Rs. 2,57,41,751/- to the assessee's income. The CIT(A) deleted the addition, holding that only the profit embedded in the suppressed receipts should be added.

What were the issues?

Whether the entire unaccounted receipts or only the profit embedded therein should be added to the income when books of accounts are rejected. The correctness of the AO's method of extrapolating receipts and the CIT(A)'s approach to estimating profit on suppressed income.

Which sections of the Income-tax Act were involved?

Section 132,Section 133A,Section 145,Section 144

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Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, SURAT– BENCH ‘SURAT’

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

Hearing: 13/11/2018Pronounced: 13/12/2018

PER RAJPAL YADAV, JUDICIAL MEMBER:

Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-4, Surat dated 7.11.2016 passed for the Asstt.Year 2014-15. 2. Sole grievance of the Revenue is that the ld.CIT(A) has erred in deleting addition of Rs.2,07,41,751/- which was added by the AO on account of unaccounted income earned by the assessee by way of suppression of professional receipts.

3.

Brief facts of the case are that search action under section 132 of the Income Tax Act was carried out in the case of medical professional group of Surat on 4.3.2014. M/s.Yash Clinical Laboratory is proprietorship concern of Dr.Mehul T. Desai. It was 2 cov

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