COMMISSIONER OF INCOME TAX Vs. ALANKAR RADIO EQUIPMENTS

JUDGEMENT

(1.) THE present appeal under Section 260A of the Income Tax Act, 1961 (THE Act in short) impugns the order dated 10.08.2006 passed by the Income Tax Appellate Tribunal (THE Tribunal for short) in the case of Alankar Radio Equipments. THE order pertains to the Block Assessment period 01.04.1988 to 24.09.1998.

(2.) THE respondent is a partnership firm of father and son and is primarily engaged in carrying on business of sale and purchase of audio cassettes belonging to Super Cassettes Industries Ltd. in old Lajpat Rai Market. Search under Section 132 of the Act were conducted on the respondent on 24.09.1998. Immediately after the search, the respondent had surrendered undisclosed income of Rs.10 Lakhs. However, the respondent submits that aforesaid surrender was made to get the seized goods release.

(3.) THE Assessing Officer made four specific additions. First addition of Rs.15,92,601/- was made on account of undisclosed investment made for purchase of audio cassettes, which were recorded in the books of accounts during the period 1988-1989 till 1998-1999. THE second addition of Rs.7,53,953/- was on account of undisclosed investment made for purchase of audio cassettes which were not recorded in the books of accounts. THE third addition of Rs.11,10,134/- was by increasing the GP rate to 2.5% on undisclosed sales instead of 1.86% as declared by the respondent in the block assessment return and by disallowing Rs.4,65,481/- towards expenditure. THE fourth addition of Rs.2,46,047/- was on account of undisclosed stock found on the date of the search.