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2022 (3) TMI 339 - AT - Income TaxInflation in expenses or bogus/inflated purchases - Difference between the cost mentioned in the document vis-avis the expenditure claimed as per the books of account - Search proceedings - rejection of books of accounts - HELD THAT:- Although, it is a case of search but no other incriminating or corroborative documents were found to establish that expenditure mentioned in seized document is true and correct. We find no purchase bills or bills of expenditure recovered to be said to be bogus or inflated. No cash, investment or any other asset has been found to be belonging to the assessee to show as outcome of such inflation of expenditure or generation of unaccounted income. We find merit in the finding of the learned Commissioner of Income-tax (Appeals) that had there been inflation in expenses or bogus/inflated purchases, then it should have been found during the search proceedings. Further, although, search action took place on February 4, 2010 however, the AO has only taken the figure up to September, 2009 and nothing has been mentioned regarding the period between October 1, 2009 to February 3, 2010. We find that the assessee is subjected to sales tax and excise duty and no adverse inference is on record to show that there is any difference between the sales and production figures in the audited accounts of the company. We further find on the basis of identical printout for the assessment years 2008-09 to 2010-11, the AO had raised identical queries for the assessment years 2008-09, 2009-10 and 2010-11. Although, no addition has been made in the assessment years 2008-09 and 2009-10 under identical facts and circumstances, however, we find the Assessing Officer deviated from his earlier stand and made huge addition for the impugned assessment year by rejecting the book results and extrapolating the profit which in our opinion is not justified. Since, the printouts of the hard disc clearly mentioned that "forecast" and since, the Assessing Officer in the two preceding assessment years has accepted the reply of the assessee and no addition has been made in the order passed under section 143(3) of the Act, therefore, following the rule of consistency, no addition can be made for the impugned assessment year, especially when no other corroborative evidence such as bogus purchases bills/bogus expenses or unexplained investment, etc., were found during the course of search. In this view of the matter and in view of the detailed reasoning given by the learned Commissioner of Income-tax (Appeals) while deleting the addition, we do not find any infirmity in his order. Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed.
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