T RADHA Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The appellant has filed the above tax case appeal against the order of the Income-tax Appellate Tribunal, Chennai "B" Bench dated November 27, 2003, in I. T. A. No. 482/Mds/1997.

(2.) The above appeal is filed by raising three questions of law. But when the appeal came up for admission on July 12, 2004, this Court admitted on the following two substantial questions of law:

(3.) The assessee is the proprietrix of M/s. Selladurai Nadar Marketing Centre and engaged in the business of stainless steel utensils and other consumer durables. The assessment year is 1993-94 and the corresponding accounting year ended on March 31, 1993. The assessee filed her return of income on November 30, 1994, admitting a loss of Rs. 89,265 and the said return was processed under Section 143(1)(a) of the Act. Later intimation was also sent to the appellant/assessee. Notice under Section 143(2) was issued on various dates. Subsequently, a raid was conducted in the business and residential premises on October 13, 1993, under Section 132 of the Income-tax Act. Various discrepancies were noted at the time of the raid mainly in the form of deficiency in the stock. The assessee's husband had given a statement and admitted the discrepancy in the stock of the business carried on by himself and his wife and offered a sum of Rs. 8,00,000 in the hands of the wife for the assessment year 1993-94 under Section 132(4) of the Act. The assessment was completed under Section 143(3) and determined the total income at Rs. 7,10,740. While determining the said total income, the Assessing Officer has made an addition of Rs. 8,00,000 as the husband had offered the said amount in the hands of the wife under Section 132(4) of the Act in respect of the deficit stock for the assessment year 1993-94. Further, the Assessing Officer also adopted a gross profit at 15 per cent. on the statement made by the husband before the officer. Aggrieved by that order, the assessee has filed an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) deleted the addition of Rs. 8,00,000 and sustained the addition of Rs. 50,000 and also was of the view that the profit in the line of business could not be more than 5 per cent. and therefore, fixed the gross profit at 5 per cent. as against 15 per cent. adopted by the Assessing Officer. Aggrieved by that order, the Revenue has filed the appeal before the Income-tax Appellate Tribunal. The Appellate Tribunal confirmed the ad hoc addition of Rs. 6 lakhs as the assessee's husband in his statement had admitted the value of suppression of stock and also fixed the gross profit at 8 per cent. on the retail sale of stainless steel vessels and aluminium products, etc., as against 5 per cent. fixed by the Commissioner of Income-tax (Appeals). Aggrieved by that, the assessee has filed the present appeal.