Gunasekaran Mannar Vs. The Assistant Commissioner of Income Tax, Central Circle 1(1), Chennai

Parties Involved

Facts Summary

The assessee, Gunasekaran Mannar, is engaged in the business of retail garment trading through the proprietary concern M/s. Sri Kannika Parameswari Stores (SKPS). A search action was conducted at the residential and business premises of the assessee, during which a difference of ₹1,00,11,231/- was found between the actual sales and modified/suppressed sales in the billing software 'S.S. Retail'. The Assessing Officer (AO) treated the case as one falling under Explanation 2 to Section 148 and issued a notice under Section 148 of the Act. The assessee filed a return of income offering additional income in the form of gross profit on suppressed sales. The AO made an addition to the income under Section 115BBE r.w.s. 69A of the Act. The assessee appealed against this order, arguing that the AO was not justified in drawing an adverse inference that purchases corresponding to suppressed sales were recorded in the S.S. Retail/accounting software.…

Legal Issues

• 1. Whether the Assessing Officer was justified in drawing an adverse inference that purchases corresponding to suppressed sales were recorded in the S.S. Retail/accounting software.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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