VSG Pan Industries Pvt. Ltd. vs DCIT/ACIT

Parties Involved

Facts Summary

The assessee company, VSG Pan Industries Pvt. Ltd., is engaged in the business of manufacturing and trading of Pan Masala. It filed its return of income on 04.10.2022, declaring a total income of INR 16,27,86,890/-. A search and seizure action was carried out on 21.02.2023 at M/s. Montage Enterprises Pvt. Ltd. (MEPL), where it was found that the assessee had made certain cash purchases amounting to INR 8,31,30,000/- which were not recorded in the books of accounts. The Assessing Officer (AO) applied a General Profit (G.P.) rate of 20.20% and made an addition of INR 2,10,42,932/- on such cash purchases. The AO also disallowed INR 1,03,17,871/- out of the turnover incentive allowed by the assessee and claimed in the Profit & Loss Account. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], who deleted the disallowance of turnover incentives but confirmed the addition of INR 2,10,42,932/- made by estimating profits on cash purchases.…

Legal Issues

• 1. Confirmation of the addition of INR 2,10,42,932/- by the AO.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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