ITO vs. Khushal Madhavlal Darji

Parties Involved

Facts Summary

The present appeal has been preferred by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2022-2023. The Revenue has raised the following grounds of appeal: 1. Whether the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 64,36,870/ by applying G.P. rate @ 8.87% on total turnover of Rs. 10,72,96,020/- including unrecorded cash transaction of Rs. 5,35,11,016/ with J.M.Group without appreciating the facts of the case? 2. Whether the Ld. CIT(A) has erred in law and on facts in not considering the fact that the assessee has sold goods of Rs. 5,35,11,016/- which are out of his books in cash to J. M. Jain Group, an entity which is alleged to be routinely engaged in doing/facilitating the Sale/purchase transaction of goods in cash which are not recorded in books of accounts of customers/vendors and received out-of-book commission and interest thereon? The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored.…

Legal Issues

• 1. Whether the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 64,36,870/ by applying G.P. rate @ 8.87% on total turnover of Rs. 10,72,96,020/- including unrecorded cash transaction of Rs. 5,35,11,016/ with J.M.Group without appreciating the facts of the case?
• 2. Whether the Ld. CIT(A) has erred in law and on facts in not considering the fact that the assessee has sold goods of Rs. 5,35,11,016/- which are out of his books in cash to J. M. Jain Group, an entity which is alleged to be routinely engaged in doing/facilitating the Sale/purchase transaction of goods in cash which are not recorded in books of accounts of customers/vendors and received out-of-book commission and interest thereon?

Judgment Outcome

Decided in favour of Revenue.

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