M/s. Jhaveri Industries, Valsad V. The ACIT., Vapi Circle, Vapi

ITA 2043/AHD/2009

• Counselvise Citation: 204320514 RSA 2009
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 18-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N SOPARKAR
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. L. GEHL OT, AM) ITA NO. 2043/AHD/2009 A. Y.: 2006-07 M/S. JHAVERI INDUSTRIES, A-1/179, GIDC, UMBERGAON DIST. VALSAD VS THE A. C. I. T., VAPI CIRCLE, VAPI PA NO. AACFJ 8263 E (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR, AR RESPONDENT BY SHRI B. L. YADAV, SR. DR DATE OF HEARING: 18-10-2011 DATE OF PRONOUNCEMENT: 20-10-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A), V ALSAD DATED 26 TH APRIL,2009, FOR ASSESSMENT YEAR 2006-07. 2. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRE SS GROUNDS NO.3, 4 AND 5 OF THE APPEAL. THE SAME ARE DISMISSED AS BEING NOT PRESSED. GROUND NO.6 IS REGARDING CHARGING OF INTER EST WHICH IS CONSEQUENTIAL. GROUND NO.7 IS REGARDING INITIATING PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE IT ACT WHICH IS PREMATURE AND WOULD BE CONSIDERED IN SEPARATE PROCEEDINGS. THESE GROUNDS ARE ACCORDINGLY DISMISSED. ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 2 3. THE EFFECTIVE GROUNDS OF APPEAL ARE GROUNDS NO.1 AND 2 WHICH READ AS UNDER: 1. THE LEARNED CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.47,72,525/- U/S 69C AS UNEXPLAINED STOCK WITHOUT APPRECIATING THE FACTS SUBMITTED BY THE APPELLANT. 2. ALTERNATIVELY AND WITHOUT PREJUDICE, ONLY THE PE AK NEGATIVE STOCK, IF ANY, CAN BE ADDED AND NOT THE SUM TOTAL OF ALL THE ALLEGED NEGATIVE STOCK FOR THE ENTIRE YEAR UNDER CONSIDERATION. 4. THE ASSESSEE IS ENGAGED IN MANUFACTURE OF COOKIN G SPICES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE WAS ASKED TO SUBMIT ITEM WISE AND MONTH WISE QUANTITATI VE DETAILS OF RAW MATERIALS AS WELL AS SALE OF FINISHED PRODUCTS. HOW EVER, IN SPITE OF SEVERAL OPPORTUNITIES GIVEN TO THE ASSESSEE, THE AS SESSEE WAS NOT ABLE TO SUBMIT THE SAME. THE ASSESSEE SUBMITTED BEF ORE THE AO THAT PREPARING CERTAIN DETAILS IS VERY DIFFICULT OR IMPO SSIBLE FOR THEM SINCE THEY DO NOT MAINTAIN QUANTITY DETAILS OF PURCHASES. ON VERIFICATION OF BOOKS OF ACCOUNTS OF THE ASSESSEE AND THE DETAILS A S PRODUCED BEFORE THE AO, IT WAS OBSERVED THAT THE ASSESSEE WA S MAINTAINING DETAILED RECORD OF PURCHASES, SALES AND ISSUE OF TH ESE GOODS FOR MIXING / PREPARATION OF OTHER SPICES BUT NOT PRODUC ED THE SAME BEFORE HIM. THE AO ALSO OBSERVED THAT THE QUANTITATIVE DET AILS MAINTAINED BY THE ASSESSEE WAS ALSO NOT GIVEN PURPOSELY AND ON VA RIOUS DATES THE ASSESSEE HAD ISSUED THE GOODS EVEN THOUGH AS PER CO MPUTERIZED BOOKS OF ACCOUNTS THERE WERE NO GOODS AVAILABLE WIT H THE ASSESSEE. THUS ACCORDING TO THE AO, THE ASSESSEE HAD SHOWED N EGATIVE STOCK ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 3 AND THE ASSESSEE WAS ASKED TO EXPLAIN THE NEGATIVE STOCK AND ALSO WHY THE DISCREPANCY SHOULD NOT BE TREATED AS UNEXPL AINED EXPENDITURE INCURRED BY THE ASSESSEE ON PURCHASE OF HING. THE SUBMISSION MADE BY THE ASSESSEE DULY REPRODUCED BY THE AO IN THE ASSESSMENT ORDER IS REPRODUCED HEREUNDER FOR THE SA KE OF CONVENIENCE:- 'THERE IS NO SALE WITHOUT PURCHASE OR STOCKS (THER E CAN NOT BE). THERE MAY BE SOME SMALL CLERICAL ERRORS IN ENTERING QUANTITY OF SALES / PURCHASES LIKE ENTERIN G SALE/PURCHASE IN WRONG ITEM CODE. PLEASE NOTE THAT THE VALUES OF SALES OR PURCHASES ENTERED ARE RIGHT. ALS O, THE CLOSING STOCK OF ITEMS ARE AS PER SHOWN IN THE P & L ACCOUNT. PLEASE NOTE THAT THE STOCK BOOK IS ONLY TH E SUBSIDIARY RECORD. WE HAVE TAKEN AND ACCOUNTED CLOS ING STOCK IN MANUFACTURING ACCOUNT AS PER ACTUAL PHYSIC AL STOCK. IN CERTAIN ITEMS PURCHASES BILLING HAS BEEN 'IN CAR TOONS (UNIT) AND THE SALES BILLING WAS IN PIECES (UNIT) OR 'ON PACKERS' UNIT. THEREFORE IN THE STOCK OF ITEMS 'IN PACKETS' OR 'IN PIECE' THERE ARE ONLY SALES AND NO PURCHASES AND THEREFORE THERE IS NEGATIVE STOCK IN THAT ITEMS. THERE ARE CERTAIN CASES OF SALES BILLS HAVING BEEN RECORDED FIRST AND PURCHASE BILL RECORDED LATER. TH E REASONS FOR LATE RECORDING OF PURCHASES BILLS CAN B E A) SOME DISPUTE REGARDING THE QUANTITY, QUALITY, RA TE OF THE MATERIALS PURCHASED AND THEREFORE RECORDING OF THE PURCHASES BILL PUT ON HOLD. B) LATE RECEIVING OF THE BILL C) IF SALES TAX RETURN FOR THE MONTH (OF THE DATE O F THE BILL) IS FILED AND BILL IS RECEIVED AFTER THAT, THEN WE RECORD THE PURCHASE BILL ON THE CURRENT DATE RATHER THAN THE B ILL DATE. ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 4 IN SOME ITEMS THERE ARE SOME VERY VERY MINOR DISCREPANCIES. WE HAVE ADJUSTED THE SALES QUANTITY FIGURES IN THE DETAILS FILED WITH THE AUDIT REPORT (WITH RETURN) TO MATCH THE FIGURES OF CLOSING STOCK WITH THE ACTUAL (PHYSICAL) STOCK AS ON 31.03.2006. WE ARE FILING HEREWITH THE STOCK LEDGER OF THE HING ITEMS, PLEASE NOTE THAT MOST OF THE TIMES THERE ARE PURCHA SES AND CORRESPONDING SALES MATCHING ONE TO ONE. WE HAV E PUT MARKS AT SOME PLACES (ONLY SOME AND NOT ALL PLA CES) TO EXPLAIN THE SAME. WE HAVE ALSO PUT CERTAIN EXPLANATORY REMARKS AT CER TAIN PLACES. PLEASE ALSO NOTE THAN AT SOME PLACES THERE ARE PURCHASES RETURNS OF THE DAMAGED GOODS. THE CORRESPONDING ITEMWISE SALES RETURNS ARE NOR RECORD ED IN RECEIPT SIDED OF THE STOCK BOOK AS THEY COME IN SMA LL QUANTITIES AND THEY ARE CREDITED IN SALES RETURNS A CCOUNT THROUGH JOURNAL VOUCHER ( WITHOUT ENTERING QUANTITI ES) PLEASE NOTE THAT THERE ARE SOME VERY MINOR (AND THEREFORE NEGLIGIBLE) LOOKING AT THE VOLUME AND SIZ E OF THE BUSINESS) DISCREPANCIES WHICH YOU MUST APPRECIATE T HAT, ARE BOUND TO BE THERE IN ANY BUSINESS. NEGLIGIBLE DISCREPANCIES OF FEW THOUSAND RUPEES IN THE TOTAL T URNOVER OF 32.12 CRORES AND NET PROFIT OF 4.07 CRORES SHOUL D NOT BE LOOKED UPON AS A VERY BIG PROBLEM. ' I THE AO FOUND OUT THAT THE TOTAL QUANTUM OF NEGATIVE STOCK WITH THE APPELLANT ON VARIOUS DATES AMOUNTED TO (-) RS.47,72 ,525.25 AND HAS BEEN DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER IN PAGE NUMBER 5 TO 11. THE AO OBSERVED THAT IN SPITE OF SEVERAL OPP ORTUNITIES GIVEN, NO DOCUMENTARY EVIDENCE WERE PRODUCED BY THE ASSESS EE IN THE FORM OF DELIVERY CHALLAN ETC. TO SUBSTANTIATE THE CLAIM THAT THE ASSESSEE HAD ENOUGH QUANTITY OF HING IN THE BOOKS OF ACCOUNT S ON THE DATE OF ISSUE OR SALE AND THAT THE ANOMALY SEEN IN THE STOC K OF HING WAS ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 5 BASICALLY DUE TO CLERICAL ERRORS. THE AO, THEREFORE , TREATED THE DIFFERENCE IN THE STOCK ON THE VARIOUS DATE OF ISSU E COMPUTED AT RS.47,72,525.25 AS UNEXPLAINED STOCK REPRESENTING U NEXPLAINED INVESTMENT MADE BY THE ASSESSEE U/S 69C OF THE IT ACT. BEFORE THE LEARNED CIT(A) THE ASSESSEE SUBMITTED COPY OF HING STOCK REGISTER ALONG WITH THE LETTER FILED BEFORE THE AO EXPLAININ G THE NEGATIVE FIGURES. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THERE WERE ALMOST ONE TO ONE PURCHASES AND CORRESPONDING SALES. IT WAS FURTHER SUBMITTED THAT IF THERE WERE SOME NEGATIVE FIGURES APPEARING, THE SAME WAS BECAUSE OF SOME VALID REASONS AND WERE FULLY EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. IT WAS ALSO SUBMITTED THAT THE AO HAS NOT EITHER PROPERLY UNDER STOOD THE DETAILS FILED BY THE ASSESSEE OR HAS DONE ALL THINGS MECHAN ICALLY ADDING UP THE VERY SMALL AMOUNTS IN SEVERAL NUMBER OF TIMES A ND WRITING THE SAME IN THE ASSESSMENT ORDER ITSELF. THE ASSESSEE H AD ALSO MADE SEVERAL BASELESS ALLEGATIONS AGAINST THE AO IN ITS STATEMENT OF FACTS. 4. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE DISMISSED THIS GROUND OF APPEAL OF THE ASS ESSEE. HIS FINDINGS IN THE APPELLATE ORDER IN PARA 6 READS AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE FACTS O F THE CASE AND THE SUBMISSION OF THE A.R, OF THE APPELLANT AND THE DETAILED STATEMENT OF FACTS AS SUBMITTED BEFORE ME BY THE APPELLANT ALONG WITH THE GROUNDS OF APPEAL. ADMITTE DLY THE APPELLANT WAS NOT ABLE TO FURNISH RECONCILIATION ST ATEMENT AS REGARDS THE MAJOR MANUFACTURING ITEMS EITHER BEF ORE THE ASSESSING OFFICER OR BEFORE ME DURING THE COURS E OF THIS APPEAL PROCEEDINGS. IN THE ABSENCE OF ANY RECONCILIATION STATEMENT AND PROPER EXPLANATION FRO M THE ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 6 PART OF THE APPELLANT TO EXPLAIN THE DISCREPANCIES PROPERLY I AM CONSTRAINED TO AGREE WITH THE ASSESSING OFFICE R AS REGARDS THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN STOCK. THE ADDITION MADE BY THE ASSESSING OFFICER I S UPHELD AND THIS GROUND OF APPEAL IS DISMISSED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE NET PROFIT OF THE ASSESSEE AS COMPARED TO THE E ARLIER YEARS WAS EXCESSIVE AND THE GROSS PROFIT RATIO OF THE CURRENT YEAR AND TWO PRECEDING YEARS ARE AS UNDER: ASSTT. YEAR TURNOVER GROSS PROFIT G. P. MARGIN A.Y.(CURRENT) 321253582 125856328 39.18% A.Y.(PRECEDING 1) 294799215 103999944 35.28% A.Y.(PRECEDING 2) 286304813 98380270 34.36% HE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS FILE D RETURN OF INCOME AT RS.4,07,19,452/- AND AS SUCH THERE WAS NO REASON FOR THE ASSESSEE TO REDUCE THE PROFIT. HE HAS REFERRED TO P B-52 WHICH IS THE QUANTITATIVE DETAILS OF HING (TRADING GOODS) AND SU BMITTED THAT IN THE NATURE OF THE COMMODITY ITSELF IT IS DIFFICULT TO M AINTAIN THE SPECIFIC QUANTITY DETAILS. THE DISCREPANCIES WERE EXPLAINED WHICH HAS NOT BEEN APPRECIATED. HE HAS SUBMITTED THAT EVEN IF THE RE WAS SOME NEGATIVE STOCK AS PER THE AO, ONLY PEAK ADDITION MA Y BE MADE INSTEAD OF THE TOTAL OF THE NEGATIVE COMPUTED BY TH E AO. HE HAS REFERRED TO PAGE 8 OF THE ASSESSMENT ORDER TO SHOW THAT PEAK NEGATIVE STOCK WAS FOUND OF (-) RS.2,10,452.35. HE HAS SUBMITTED THAT THE ASSESSEE MAINTAINED SAME BOOKS OF ACCOUNTS IN WHICH FOR ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 7 EARLIER YEARS NO ADDITION HAS BEEN MADE. HE HAS SUB MITTED THAT IF THE BOOKS OF THE ASSESSEE WERE NOT RELIABLE WITH REGARD TO HING ITEM, REASONABLE PROFIT COULD BE ESTIMATED BY THE AO FOR THE PURPOSE OF MAKING THE ADDITION. HE HAS RELIED UPON THE ORDER O F ITAT AHMEDABAD BENCH IN THE CASE OF NANIKRAM S. JHAMTANI IN ITA NO.897/AHD/2009 WITH C. O. NO.72/AHD/2009 DATED 21- 01-2011. IN PARA 8 OF THE SAID ORDER THE TRIBUNAL HELD AS UNDER : 8. CONSIDERING THE FACTS OF THE CASE, IN THE LIGHT OF THE ABOVE DECISION, IT IS CLEAR THAT THE AO MADE ADDITI ON BY TREATING THE UNACCOUNTED SALES AS PROFIT. THUS, TH E APPROACH OF THE AO WAS NOT IN ACCORDANCE WITH THE L AW. THE ENTIRE AMOUNT OF THE SALES WOULD NOT REPRESENT THE INCOME OF THE ASSESSEE WHO HAS NOT DISCLOSED THE SA LES. IT IS ADMITTED FACT THAT THE STOCK DURING THE COURS E OF SURVEY WAS FOUND DEFICIT/SHORT FALL. THEREFORE, IT COULD BE PRESUMED THAT THE DEFICIT STOCK WAS SOLD OUTSIDE TH E BOOKS OF ACCOUNTS. THE SALES THEREFORE REPRESENT T HE PRICE RECEIVED BY THE SELLER OF THE GOODS. ONLY TH E REALISATION OF THE EXCESS OVER THE COST INCURRED CO ULD FORM PART OF THE PROFIT INCLUDED IN THE CONSIDERATION FO R THE SALES. NO MATERIAL IS BROUGHT ON RECORD TO THE EFF ECT THAT THE INVESTMENTS BY WAY OF INCURRING COST IN ACQUIRI NG THE GOODS, WHICH WERE SOLD HAD BEEN MADE BY THE ASSESSE E AND THAT THE INVESTMENT WAS ALSO NOT DISCLOSED. TH E LD. CIT(A) NOTED THAT DIFFERENCE IN STOCK WAS WORKED OU T ON ORAL STATEMENT OF ASSESSEE WHICH WAS NOT CORROBORAT ED BY ACTUAL FIGURE. EARLIER STATEMENT WAS ALSO RETRA CTED. IT IS ALSO A MATTER OF RECORD THAT STOCKS OF BOTH THE CONCERNS WERE MIXED UP AT SURVEY. SO NO ACTUAL COUNTING COU LD TAKE PLACE. THE LEARNED CIT(A) ON FURTHER EXAMINAT ION OF THE CASE OF THE ASSESSEE FOUND THAT THERE IS DIFFER ENCE IN STOCK OF RS.20,315/- WHICH IS NOT RECONCILED AT ANY STAGE. THEREFORE, REJECTION OF BOOK RESULTS IS JUSTIFIED. THE LEARNED CIT(A) ON PROPER APPRECIATION OF THE MATERI ALS ON RECORD, RIGHTLY REJECTED THE BOOK RESULTS OF THE AS SESSEE ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 8 AND ESTIMATED THE INCOME OF THE ASSESSEE BY APPLYIN G GP RATE. EVEN IF HIGHER GP RATE IS APPLIED AGAINST UNACCOUNTED SALES, AS MADE BY THE AO, THE ADDITION WOULD BE MORE OR LESS THE SAME AS IS CONSIDERED BY THE CIT(A). WE THEREFORE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(A) IN SUSTAINING PART ADDITION ON T HE MATTER IN ISSUE. WE CONFIRM HIS FINDING AND DISMIS S THE REVENUES APPEAL. THE CO IS ALSO ACCORDINGLY DISMISSED, WHICH IS ALSO NOT PRESSED BY THE LEARNED COUNSEL OF THE ASSESSEE. 6. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE H AS FAILED TO EXPLAIN THE DISCREPANCIES IN HING ACCOUNT AND THERE WAS NEGATIVE BALANCE IN THE STOCK ON CERTAIN DATES. THEREFORE, B OOKS OF THE ASSESSEE ARE NOT RELIABLE AND THE APPEAL OF THE ASS ESSEE MAY BE DISMISSED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. THE AO FOUND NEGATIVE STOCK ON CERTAIN DATE S WHICH HAS BEEN HIGHLIGHTED AT PAGE 5 TO 11 OF THE ASSESSMENT ORDER. THE AO MADE ADDITION OF THE TOTAL NEGATIVE STOCK OF RS.47, 72,525/-. HOWEVER, THE PEAK OF THE NEGATIVE STOCK AS NOTED AT PAGE 8 O F THE ASSESSMENT ORDER TO SHOW THE SAME AT (-) RS.2,10,452.35. THE D ISCREPANCIES NOTED BY THE AO WERE NOT CLARIFIED BEFORE THE AO. T HEREFORE, INSTEAD OF MAKING HUGE ADDITION AGAINST THE ASSESSEE, IT CO ULD BE REASONABLE AND PROPER FOR THE AO TO REJECT THE BOOK RESULTS OF THE ASSESSEE AND TO MAKE REASONABLE ADDITION CONSIDERING THE HISTORY OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THAT WITHOUT PURCHASES THERE COULD NOT BE ANY SALES. THUS, THE A PPROACH OF THE ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 9 AO WAS NOT IN ACCORDANCE WITH LAW. THE PROFIT COULD BE COMPUTED ON THE BASIS OF SALES MADE BY THE ASSESSEE. THUS, THE ENTIRE AMOUNT OF NEGATIVE BALANCE COULD NOT BE TREATED AS UNEXPLAINE D EXPENDITURE. SINCE THE STOCK DURING THE COURSE OF THE PROCEEDING S WAS FOUND TO BE NEGATIVE, THEREFORE, IT COULD BE PRESUMED THAT THE SAME WAS SOLD OUTSIDE THE BOOKS OF ACCOUNTS. BUT, SUCH ALLEGATION WAS ALSO NOT MADE AGAINST THE ASSESSEE. NO MATERIAL IS BROUGHT O N RECORD TO THE EFFECT THAT THE INVESTMENT BY WAY OF INCURRING COST FOR MAKING THE PURCHASES WHICH WERE SOLD HAD BEEN MADE BY THE ASSE SSEE AND THAT THE INVESTMENT WAS ALSO NOT DISCLOSED. IN SUCH CIRC UMSTANCES, IT WOULD HAVE BEEN BETTER TO REJECT THE BOOK RESULTS O F THE ASSESSEE AND ESTIMATE THE PROFIT EITHER CONSIDERING THE HISTORY OF THE ASSESSEE OR CONSIDERING THE PEAK ADDITION AS IS SUGGESTED BY TH E LEARNED COUNSEL FOR THE ASSESSEE. THE ASSESSEE DEALS IN SEVERAL VAR IETIES OF THE ITEMS AND AS SUCH IT WOULD BE DIFFICULT TO MAINTAIN DETAI LS OF THE STOCK. THE ASSESSEE PRODUCED ALL THE BOOKS OF ACCOUNTS AND SAL ES AND PURCHASES VOUCHERS BEFORE THE AO FOR VERIFICATION. THE PROFIT RATE OF THE ASSESSEE IN THE ASSESSMENT YEAR IS BETTER AS CO MPARED WITH THE EARLIER YEARS. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES IT WOULD HAVE BEEN BETTER FOR NEGATIV E STOCK, SOME REASONABLE ADDITION ON ACCOUNT OF SUPPRESSION OF PR OFIT SHOULD HAVE BEEN MADE IN THE CASE OF THE ASSESSEE. CONSIDERING THE ABOVE DISCUSSIONS IN THE LIGHT OF THE ORDER OF THE TRIBUN AL IN THE CASE OF NANIKRAM S. JHAMTANI (SUPRA), WE ARE OF THE VIEW TH AT ENDS OF JUSTICE WOULD BE MET IF LUMP SUM ADDITION OF RS.3,00,000/- IS MAINTAINED AS AGAINST THE ADDITION MADE BY THE AUTHORITIES BELOW . THE ORDERS OF THE ITA NO.2043/AHD/2009 M/S. JHAVERI INDUSTRIES VS ACIT VAPI CIRCLE, VAPI 10 AUTHORITIES BELOW TO THAT EXTENT ARE MODIFIED AND A DDITION OF RS.47,72.525/- IS RESTRICTED TO RS.3,00,000/-. 8. IN THE RESULT, GROUNDS NO.1 AND 2 OF THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. 9. NO OTHER POINT IS ARGUED OR PRESSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 20/10/2011 SD/- SD/- (A. L. GEHLOT) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD