TMI Blog2012 (2) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ing capital was utilised by the assessee for carrying out unaccounted turnover. - Thus CIT(A) rightly deleted the additions. - ITA No.3000/Ahd/2007, ITA No.3001/Ahd/2007 - - - Dated:- 5-1-2012 - S/SHRI G.C. GUPTA, A. MOHAN ALANKAMONY, JJ. Revenue by : Shri S.K.Gupta Assessee by : Shri S.N. Soparkar O R D E R PER G.C. GUPTA, VICE-PRESIDENT: These two appeals by the Revenue for the A.Y.2004-2005 and 2005-2006 and CO by the assessee for A.Y.2004-2005 are directed against the order of the CIT(A). These are being disposed of with this consolidated order. ITA No.3000/Ahd/2007 : A.Y.2004-2005 (Revenue s appeal) 2. The ground no.1 of the Revenue s appeal reads as under: 1. The CIT(A) has erred in law and on fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the Department and the as per the assessee, after considering the addition income for taxation purpose, is very marginal at 0.5%. Once the books of accounts of the assessee are rejected and a flat rate of GP is to be applied, some element of estimate is inevitable. In this case, there is no material on record to suggest that the GP rate of 17.5% was not justified. In these circumstances, we hold that there is no mistake in the order of the CIT(A) in holding that the GP rate offered by the assessee on such unaccounted turnover was bona fide and difference is only on account of two estimates which was very marginal, and in deleting the addition made by the AO. Accordingly, the order of the CIT(A) is confirmed and the Ground No.1 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted sales. 9. We have considered rival submissions. We find that the CIT(A) has deleted the addition by observing that the addition was made on pure guess work without any reference to any supporting evidence or material. We find that the department could not bring any material on record to suggest that the assessee has invested some initial working capital for making the sales in question. The assessee has offered a sum of Rs.40 lakhs as additional income separately. During the course of search no unaccounted sale bills, purchase bills and unaccounted value of debtors or creditors were found which could suggest that unaccounted working capital was utilised by the assessee for carrying out unaccounted turnover. The case law relied upon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue raised in the ground no.1 of the Revenue s appeal for earlier asstt.year 2004-2005. 15. We have considered rival submissions and for the reasons recorded while disposing of the ground no.1 of the Revenue s appeal for A.Y.2004-2005 in the foregoing para no.5 of this order we hold that there is no merit in the ground no.1 of the Revenue s appeal, which is accordingly dismissed. 16. The Ground No.2 of the Revenue s appeal reads as under: 2. The CIT(A) has erred in law and on facts in deleting the addition of rs.13,72,733/- made on account of sales of finished goods outside the books of accounts produced out of shortage of raw material found during the course of search. While deleting the said addition, the ld.CIT(A) has ignored the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial year, which was shown in the audited accounts. Nothing was found on record that the assessee made unaccounted sales. We find that there is no material before us to sustain the addition and the addition has been made on presumption only. In the facts of the case, we hold that since the issue is covered in favour of the assessee with the decision of Ahmedabad Tribunal in assessee s group case cited supra and there being no mistake in the order of the CIT(A) in holding that the AO has not disputed any sales recorded during the postsearch period and the closing stock shown in the financial statements were as per the excise record and in directing the AO to delete the impugned addition, the Ground No.2 of the Revenue s appeal is l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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