COMMISSIONER OF INCOME TAX CR BUILDING QUEENS ROAD. BANGALORE-560001 AND THE DEPUTY COMMISSIONER OF INCOME TAX COMPANY CIRCLE 4(1) CR BUILDING QUEENS ROAD BANGALORE Vs. M/S. GOWRI GOPAL TEXTILE PROCESSING PVT. LTD., NO. 1195, 22ND A CROSS 23RD M

JUDGEMENT

(1.) The revenue has preferred this appeal against the order passed by the Tribunal which has partly allowed the appeal preferred by the Assessee deleting the amount in excess of Rs. 10,00,000/- as undisclosed income.

(2.) The Assessee is a private limited company engaged in the business of processing the sarees supplied by the manufacturer/dealers. A search was conducted at the premises of the Assessee on 6.10.1998. During the course of search the Assessee was found to be preparing two types of delivers challans. In one type of challan the company's name, phone number, sales-tax number, etc., were mentioned. In another type of challan, only serial number was appearing without, the name, etc. of the Assessee The Managing Director in his statement admitted that generally for second type of challan, the transactions are not accounted in the books of accounts. The deliver; challans for unaccounted transactions was found for the period 9.9.1997 to 13.1.1998 and 1.1.1998 to 26 9.1998 (89 days). The assessing officer made a comparison between the regular delivery challan and imprinted delivery challan for the said period. The details of sarees delivered both through the regular and through imprinted delivery challans were fully available for the month of October 1997. The estimate was being made taking this month as the basis. The total value of the bills raised in October 1997 was Rs. 5,84.446/- at an average cost for processing per saree at Rs. 57/-. Thereafter, he proceeded to estimate the turnover for the full year taking the above ratio and arrived at Rs. 90.94.965/- for two years 1997-98 and 1998-99. He gave deduction of 50% of the said amount, towards expenditure and he arrived at the total undisclosed income at Rs. 39.13,500/- and levied tax on the said amount. The Assessee on his part after admitting that he was maintaining two accounts and he had also destroyed few receipts, offered Rs. 10.00,000/- as the undisclosed income which was not accepted.

(3.) Therefore, the Assessee preferred an appeal against the order passed by the assessing officer. But, the Commissioner of Income Tax (Appeals) declined to interfere with the block assessment order.