SURJIT MOTORS Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE assessee has invoked the jurisdiction of this Court under s. 260A of the IT Act, 1961 (for brevity, 'the Act') by 369/Asr/2003, for asst. yr. 1996 -97. The assessee has claimed that the following substantial questions of law would arise for our determination :

(2.) THE assessee is a partnership firm doing its business of sale/purchase of motor parts at Pathankot. It had filed its income was in addition to salary and interest paid to partners, amounting to Rs. 75,766 + Rs. 35,381, which is assessable directly in the hands of the petitioner. Subsequently, proceedings of assessment under s. 143(2) of the Act were initiated and the AO applied gross profit at the rate of 7.73 per cent as against the declared by the assessee at 6.8 per cent and accordingly, made an addition of Rs. 38,000 in the total income in the final assessment order passed on for on account of some extra stock available with the assessee. No appeal was filed by the assessee against the order of 4,59,401.19 to the taxable income of the assessee being the investment made in unaccounted purchases out of undisclosed sources. Further, the AO added a sum of Rs. 71,081 on account of application of GP rate of 7.75 per cent and initiated proceedings under s. 271(1)(c) of the Act as no vouchers in respect of expense claimed by the assessee were produced.

(3.) THE assessee had agreed to enhance its taxable income by Rs. 10,000 on that issue. that an amount of Rs. 1,84,248 was deleted out of the addition made by the AO on account of unaccounted purchases of Rs. 4,59,401. The Tribunal upheld the additions in respect of unexplained and unaccounted purchases by citing the upheld the additions of Rs. 2,75,153 and Rs. 71,081 on account of working out the profit on unaccounted sales realised from unexplained investments made in the purchases. It was, therefore, held that there was no need to make separate addition on account of disallowance of expenditure and accordingly, the addition of Rs. 10,000 was deleted.