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Issues involved: Challenge to the order of the Income Tax Appellate Tribunal under Section 260A of the Income Tax Act, 1961 for the Assessment Year 1998-1999.
1. Challenge to Tribunal's Decision on Suppressed Sale and Deletion of Additions: The appellant challenged the Tribunal's decision upholding the Commissioner of Income Tax (Appeals) regarding determination of suppressed sale of bread and deletion of additions made by the Assessing Officer (AO). The Tribunal found that the AO's additions were based on estimation without any supporting evidence, leading to the deletion of certain additions. The Tribunal noted the absence of material to support the AO's estimations and held that the AO's additions were not based on any evidence. Consequently, the Tribunal upheld the deletion of certain additions made by the CIT(A). 2. Challenge to Reduction of Disallowance of Expenses: The appellant also contested the Tribunal's decision to reduce the addition of disallowance of expenses made by the AO from 20% to 10% of the total expenses. The Tribunal observed that the AO's estimation of expenses was not supported by any evidence and that the CIT(A) had rightly deleted the addition based on lack of evidence. The Tribunal partially allowed the revenue's appeal regarding the disallowance of expenses. 3. Unilateral Estimation of Production Figures by AO: The Court agreed with the CIT(A) and the Tribunal that the AO could not unilaterally estimate production figures without cogent reasons or comparable cases, especially when consistent wastage percentages had been accepted in previous assessment years. The Court found that the AO's unilateral estimations were not justified in the absence of supporting evidence or reasoning. 4. Discrepancy in Sale Price Estimations by AO: The Court noted a discrepancy in the AO's estimation of sale prices for different assessment years, highlighting inconsistencies in the AO's approach. The Court pointed out that if the AO had estimated a lower sale price for a previous assessment year, he could not have estimated a higher price for the current assessment year. This inconsistency raised doubts about the AO's estimations and decision-making process. 5. Dismissal of Appeal: Ultimately, the Court found that the factual findings by the final fact-finding authority were not perverse or contrary to the record. As no substantial question of law arose in the proceedings, the Court dismissed the appeal for lacking merit. The Court concluded that the additions made by the AO could not be sustained based on the lack of evidence and reasoning in the estimation process.
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