Unaccounted sales of the assessee have been shown as income by its sister concern : SC

In a recent decision, Hon’ble Supreme Court held that:

Income from undisclosed sources – addition – unaccounted sales vis-a-vjs sales accounted for by sister concern – Partners of the assessee firm admitted excess stock in their statements recorded u/s 131 -Though the assessee explained the difference before the CIT(A) with the help of the books of account of its sister concern AA Ltd., it was found that unaccounted sales of 32,809 kgs of finished goods were made to AA Ltd. -CIT(A) upheld the additions made on account of unaccounted production, sales and closing stock of finished products – same has been upheld by the Tribunal as well as the High Court – Assessee’s counsel has submitted that he can offered to adduce satisfactory evidence in support of his plea that the aforesaid sales have been shown as income by AA Ltd. on which tax has been paid by it – If the assessee is able to prove that tax on the income generated from the sale of the aforesaid finished products has been paid by AA Ltd. benefit thereof should be extended to the assessee – Therefore, matter is remanded back to the assessing authority to give an opportunity to the assessee to demonstrate as to whether AA Ltd. has already paid the tax on the income from the aforesaid sales, and to accord benefit to the assessee it that is shown.

For complete text of judgement, click here Ashish Plastic Industries