Itta/452/2013 Of Paro Food Products v. Commissioner Of Income Tax-Vi

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH ATHYDERABAD THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. No. 452 of 2013 DATE: 25.09.2013 Between: Paro Food Products,Hyderabad. … Appellant AndCommissioner of Income Tax-VI,Hyderabad. … Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. No. 452 of 2013 JUDGMENT:(Per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal has been preferred against a portion of the impugnedjudgment and order of the learned Tribunal, dated 08.03.2013, and sought to be admitted on the following suggested questions of law: (A) Whether on the facts and in the circumstances of the case, theappellate Tribunal erred in sustaining the order of the assessing officer byreversing the relief given by the CIT(A) and upholding the additions madein the reassessment founded on the basis of sales tax assessmentorder, dated 28.10.2004 that stood set aside later by the AppellateDeputy Commissioner (CT) vide order dated 29.09.2007? (B) Without prejudice to the above, whether on the facts and in thecircumstances of the case, the appellate Tribunal erred in deleting thecredit given by the CIT(A) towards sales up to 03.10.2002 for explainingthe cash deficit without citing any reason whatsoever? (C) Whether on the facts and in the circumstances of the case, theappellate Tribunal ought to have held that addition made by theassessing officer towards alleged cash deficit could not be sustained u/s.68 of the Act in as much the addition was not towards any sum creditedin the books of account maintained by the appellant? Learned counsel for the appellant at the time of argument says that thisappeal is intended to prefer only in relation to the issue regarding deletion ofthe addition of Rs.5 lakhs out of Rs.46,26,864/- made by the AssessingOfficer towards undisclosed profit resulting out of unaccounted sales andunaccounted purchases without taking on record any material evidence andonly given relief on the ground of natural justice. The learned Tribunal in relation to the aforesaid issue has come to the fact finding as follows: Learned counsel for the appellant at the time of argument says that thisappeal is intended to prefer only in relation to the issue regarding deletion ofthe addition of Rs.5 lakhs out of Rs.46,26,864/- made by the AssessingOfficer towards undisclosed profit resulting out of unaccounted sales andunaccounted purchases without taking on record any material evidence andonly given relief on the ground of natural justice. The learned Tribunal in relation to the aforesaid issue has come to the fact finding as follows: “We find that the assessee itself maintained this cash book andit was found during the inspection by the Sales Tax Department. Thereceipts and payments shown in the cash book are matching with theentries in other books i.e., cash deposits made in the bank, SalesRegister, etc. The assessee has thus failed to explain the sources ofthe cash satisfactorily. It is evident from the maintenance of the cashbook that the assessee did not have the sources for the cashdeposits/payments made. It is seen that the assessee has resortedto unaccounted purchases and unaccounted sales which hasgenerated profits. These unaccounted profits amounting toRs.46,26,864/- are taxed now. The telescoping benefit for the cashgenerated out of the unaccounted profits is to be given against thenegative cash balance due to shortfall in cash in the books ofaccount. However, the cash generated from the unaccounted profitis for the entire year whereas the peak of negative of cash is as on03.10.2002. Therefore, it becomes necessary to arrive at the cashavailable out of the unaccounted sales and unaccounted purchaseson a daily basis. For this purpose, the AO assumed that the date ofreceipt on which the material relating to unaccounted purchases asreceived is the date on which the cash is paid for the same. Similarly, the date on which unaccounted sales was made isassumed as the date on which cash is received for the same. Thisassumption is made because there is no evidence as to when thecash was paid for the unaccounted purchases and when the cashwas realized for the unaccounted sales. Accordingly, the cashavailable out of the unaccounted profits is worked day-wise which isavailable as source for the shortfall in cash in the books of account. When both are compared the peak difference of Rs.66,01,156/- wasarrived on 20.05.2002 i.e., the sources for this amount is not availableeven though the cash generated out of the unaccounted profits istaken considered by the A.O.” It appears that the above finding is absolutely a factual finding andcannot be said to be perverse. In view of this situation, it is difficult for thisCourt to reach further fact finding by admitting the appeal. Under thesecircumstances, we do not find any element of law in this appeal. The appeal is accordingly dismissed. _____________________ K.J. SENGUPTA, CJ ________________ K. C. BHANU, J ES