M/s. Shivsagar Steel Rollings Mills, Nashik V. Assistant Commissioner of Income-tax,

ITA 245/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1585 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 10-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT DUA
• Keywords: Unexplained expenditure; Additional evidence; Revised return
• Section: 69C; 143(3); 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 2 45 /PN/201 5 / ASSESSM ENT YEAR : 20 0 7 - 0 8 M/S. SHIVSAGAR STEEL ROLLING MILLS, A - 34, MIDC, AT PALKHED ROAD, A/P DINDORI, DIST. NASHIK 422202 . / APPELLANT PAN: A A JFS0846F VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2, NASHIK . / RESP ONDENT CIRCLE 2, NASHIK . / RESP ONDENT / APPELLANT BY : S MT. DEEPA KHARE / RESPONDENT BY : SHRI AMIT DUA / DATE OF HEARING : 28 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 08 . 0 7 .201 6 / ORDER PER SUSHMA CHOWLA , J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , NASHIK , DATED 23 . 1 2 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 7 - 0 8 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 2 45 /PN/20 1 5 SHIVSAGAR STEEL ROLLING MILLS 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT ERRED IN LAW AND ON FACTS IN MAKING AN ENHANCEMENT OF RS.29,00,225/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE IN PURCHASES TOWARDS THE CLANDESTINE SALES OF STEEL BARS. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS.3,10,000/ - TOWARDS UNDISCLOSED PURCHASE OF STEEL BARS AND RS.36,785/ - TOWARDS GROSS PROFIT. 3. THE LEARNED CIT ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ADDITIONS ARE MADE ON THE BASIS OF SEARCH CONDU CTED BY CENTRAL EXCISE DEPARTMENT AND THE ASSESSMENTS MADE UNDER THE CENTRAL EXCISE ACT ARE UNDER DISPUTE. 4. THE LEARNED CIT(A) FAILED IN MAKING AN ENHANCEMENT ON THE BASIS OF STATEMENTS RECORDED FROM SHRI UMESH MODI WHICH WAS NOT CONFRONTED TO THE APPEL LANT NOR THE APPELLANT HAD ANY OPPORTUNITY TO REQUEST FOR THE CROSS EXAMINATION THE PERSON. 3. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS AGAINST THE ORDER OF ENHANCEMENT OF CIT(A) ON ACCOUNT OF UNEXPLAINED EXPENDITURE IN PURCHASES TOWARDS THE CL ANDESTINE SALES OF STEEL BARS TO THE TUNE OF RS.29,00,225/ - . THE ASSESSEE BY WAY OF GROUND OF APPEAL NO.2 IS AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE BY WAY OF GROUND OF APPEAL NO.2 IS AGGRIEVED BY THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION OF RS.3,10,000/ - TOWARDS UNDISCLOSED PURCHASES OF STEEL BARS AND RS. 36,785/ - TOWARDS G ROSS PROFIT. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF CIT(A) IN MAKING ENHANCEMENT ON THE BASIS OF STATEMENT RECORDED O F SHRI UMESH MODI, WHICH WAS NOT CONFRONTED TO THE ASSESSEE NOR THE ASSESSEE HAD ANY OPPORTUNITY TO REQUEST FOR CROSS - EXAMINATION OF TH E SAID PERSON. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS RUNNING A RE - ROLLING MILL MANUFACTURING IRON BARS FROM IRON SCRAP IN THE FACTORY SITUATED AT PALKHED ROAD, DINDORI, DISTRICT NASHIK. THE ASSESSEE HAD FURNISHED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS. 1,07,000/ - AFTER CLAIMING SET OFF BROUGHT FORWARD LOSSES. THEREAFTER, THE ASSESSING OFFICER ITA NO. 2 45 /PN/20 1 5 SHIVSAGAR STEEL ROLLING MILLS 3 RECORDED REASONS FOR REOPENING THE ASSESSMENT. SINCE THE INFORMATION WAS RECEIVED THAT THE ASSESSEE HAD IND ULGED IN EVASION OF CENTRAL EXCISE DUTY BY CLEARING ITS FINISHED GOODS CLANDESTINELY THROUGH A BROKER MR. UMESH MODI. IT WAS STATED BY DGCEI, MUMBAI ZONE THAT THE ASSESSEE HAD SOLD 155.020 MTS OF MS/TMT BARS DURING THE PERIOD APRIL 2006 TO DECEMBER, 2006 CLANDESTINELY, WHICH WAS VALUED AT RS. 30,62,540/ - . THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT, IN RESPONSE TO WHICH, THE ASSESSEE FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 7,09,580/ - . THE ASSESSEE IN THE REVISED RETURN OF INCOME HAD DECLARED INCOME FROM OTHER SOURCES I.E. GROSS PROFIT @ 5.3% ON UNDISCLOSED SALE OF TMT BARS OF VALUE OF RS. 30,62,540/ - AND ALSO 5.3% ON UNDISCLOSED CORRESPONDING PURCHASES AT RS.2 , 25 , 100/ - . THE ASSESSING OFFICER NOTED THAT THOUGH THE ASSESS EE HAD DECLARED 5.3% OF GROSS PROFIT FOR THE YEAR UNDER CONSIDERATION BUT FOR ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAD SHOWN GROSS PROFIT OF 7.4% . AFTER DISCUSSION WITH THE ASSESSEE, THE GROSS PROFIT OF 6.5% WAS TAKEN FOR CALCULATING THE UNDISCLOSED INCO ME OUT OF CLANDESTINE SALE OF GOODS, WHICH WORKS TO RS. 1,99,100/ - , AGAINST WHICH THE ASSESSEE HAD ALREADY DECLARED INCOME OF RS.1,62,315/ - , HENCE THE ADDITION OF RS.36,785/ - WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER, ADDITION WAS MADE ON ACCOU NT OF UNDISCLOSED EXPENDITURE FOR PURCHASE OF RAW MATERIAL UNDER SECTION 69C OF THE ACT AT RS.3,10,000/ - . ANOTHER ADDITION MADE IN THE HANDS OF ASSESSEE WAS FOR NON DEDUCTION OF TAX AT SOURCE UNDER SECTION 40(A)(IA) OF THE ACT. 5. THE CIT(A) AFTER CONSID ERING THE WRITTEN SUBMISSIONS OF ASSESSEE WHICH ARE REPRODUCED UNDER PARA 5 OF THE APPELLATE ORDER, WAS OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN LIMITING THE ADDITIONS TO RS. 36,785/ - AS UNDISCLOSED INCOME AND RS.3,10,000/ - AS UNEXPLAINED EXPENDITURE UNDER ITA NO. 2 45 /PN/20 1 5 SHIVSAGAR STEEL ROLLING MILLS 4 SECTION 69C OF THE ACT. HE WAS OF THE VIEW THAT THE ENTIRE AMOUNT OF RS.30,62,540/ - LESS GROSS PROFIT AT 5.3% ON UNDISCLOSED SALE OF TMT BARS SHOULD BE TREATED AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. HENCE, SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AGAINST ENHANCEMENT OF RS. 25,53,440/ - OVER AND ABOVE THE ADDITIONS MADE BY THE ASSESSING OFFICER OF RS.3,10,000/ - AND RS. 36,785/ - . THE ASSESSEE FURNISHED ITS EXPLANATION IN RESPECT THEREOF AND NOTED THAT THERE WAS REMOVAL OF GOODS BY THE ASSESSEE FIRM WITHOUT PAYING EXCISE DUTY, WHICH CAME TO LIGHT BECAUSE OF SEARCH ACTION CARRIED ON AGAINST THE ASSESSEE BY EXCISE AUTHORITIES. AS THE ASSESSEE HAD INDULGED IN CLANDESTINE REMOVAL OF GOODS TO THE EXTENT OF RS.30,62,540/ - , TH EN WHERE THE ASSESSEE HAD SHOWN GROSS PROFIT RATE OF 5.3%, THE COST OF UNEXPLAINED PURCHASES OF 155.020 MT OF TMT BARS WAS WORKED OUT AND ADDITION WAS MADE TO THE EXTENT OF RS. 29,00,225/ - AS UNDISCLOSED INCOME OF ASSESSEE. THE ASSESSING OFFICER HAD WORKED OUT AT RS. 3,46,785/ - AND HENCE, THE INCOME WAS ENHANCED BY RS.25,53,440/ - . 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN ENHANCING THE INCOME BY RS.29,00,225/ - . THE ASSESSEE IS ALSO AGGRIEVED BY THE ORDER OF CIT(A) IN CONFIRMING THE ADDITI ON OF RS.36,785/ - ON ACCOUNT OF GROSS PROFIT AND OF RS.3,10,000/ - ON ACCOUNT OF UNDISCLOSED PURCHASES OF STEEL BARS. THE CLAIM OF THE ASSESSEE BEFORE THE TRIBUNAL WAS THAT WHERE ASSESSMENT MADE UNDER THE CENTRAL EXCISE WAS UNDER DISPUTE AND WHERE THE STAT EMENT RECORDED OF VARIOUS PERSONS WAS NOT CONFRONTED TO THE ASSESSEE, NOR ANY OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO REQUEST FOR CROSS - EXAMINATION OF THE SAID PERSON, THERE WAS NO MERIT IN THE AFORESAID ADDITIONS. ITA NO. 2 45 /PN/20 1 5 SHIVSAGAR STEEL ROLLING MILLS 5 7. THE LEARNED AUTHORIZED REPRESENTATIV E FOR THE ASSESSEE POINTED OUT THAT IN SERIES OF CASES OF FURN ACE AND RE - ROLLING MILLS, THE TRIBUNAL HAS ALREADY HELD THAT IN CASES OF INVESTIGATION BY THE EXCISE AUTHORITIES, THE ADDITION, IF ANY, HAS TO BE MADE ONLY TO THE EXTENT OF GROSS PROFIT ON THE A MOUNT OF CLANDESTINE REMOVAL OF GOODS AND NO ADDITION IS MADE ON ACCOUNT OF INVESTMENT IN PURCHASE OF RAW MATERIAL. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 9. ON PERUSAL OF RECORD A ND AFTER CONSIDERING THE ISSUE RAISED, IT IS APPARENT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS COVERED BY ORDERS OF TRIBUNAL IN THE CASE OF STEEL RE - ROLLING MILL CASES . I NVESTIGATION BY THE EXCISE AUTHORITIES WERE CARRIED OUT AGAINST SEVERAL ROLLING MILLS, WHO WERE FOUND TO HAVE ENGAGED IN CLANDESTINE REMOVAL OF GOODS TO SOME EXTENT . THEREAFTER, ADDITIONS WERE MADE BY CCE, PUNE . IN THE SAID CASES, WHEREIN THE SALES OF SAID CONCERNS WERE ESTIMATED AND EXCISE DUTIES WERE CHARGED THEREON. THE CESTAT, DELETED THE SAID ADDITIONS MADE ON SOME HYPOTHETICAL BASIS OF CONSUMPTION OF ELECTRICITY AND PRODUCTION OF FINISHED GOODS. HOWEVER, THE ASSESSEE IN ALL THE CASES ACCEPTED ITS LIABILITY TO PAY EXCISE DUTY ON THE SUPPRESSED PRODUCTION OF GOODS , WHICH WERE CLANDESTINELY REMOVED WITHOUT PAYMENT OF EXCISE DUTY. THE INCOME TAX AUTHORITIES IN THE CASE OF SUCH PERSONS HAD TAKEN THE SAID INVESTIGATION AS BASE FOR MAKING ADDITION IN THE HANDS OF RESPECTIVE ASSESSEES. NO FURTHER INVESTIGATION WAS CARRIED OUT BY TH E INCOME TAX DEPARTMENT AND THE SOLE BASIS FOR MAKING THE ADDITION WAS THE INVESTIGATION CARRIED OUT BY THE EXCISE AUTHORITIES. THE TRIBUNAL IN SERIES OF CASES TOOK NOTE OF THE FACTS AND WITH LEAD ORDER IN SHREE OM ROLLING MILLS PVT. ITA NO. 2 45 /PN/20 1 5 SHIVSAGAR STEEL ROLLING MILLS 6 LTD. VS. ADDL. CIT IN ITA NOS.125 & 127/PN/2012 AND CROSS APPEALS IN ITA NOS.430 & 431/PN/2012, RELATING TO ASSESSMENT YEARS 2007 - 08 & 2008 - 09 VIDE ORDER DATED 15.07.2015 HAD CONSIDERED THE ISSUE AT LENGTH VIDE PARAS 54 TO 87 AND VIDE PARAS 88 AND 89, THE TRIBUNAL HAD DELETED THE ADDITION ON BOTH COUNTS I.E. ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION AND ALLEGED INVESTMENT IN PURCHASES, WHICH READ AS UNDER: - 88. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE HOLD THAT NO EXTRAPOLATION OF SALES FOR 300 DA YS CAN BE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF THE EVIDENCE FOUND FOR CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY FOR FEW DAYS, WHICH IN TURN, HAS BEEN ADMITTED BY THE ASSESSEE BY WAY OF FILING PETITION BEFORE THE SETTLEMENT COMMISSION, WHICH IN TURN, HAS ALSO BEEN ACCEPTED BY THE SETTLEMENT COMMISSION. MERELY BECAUSE THE SETTLEMENT COMMISSION ACCEPTED THE CLAIM OF THE ASSESSEE OF ADDITIONAL EXCISE DUTY PAYABLE ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF E XCISE DUTY DOES NOT ESTABLISH THE CASE OF THE REVENUE THAT THE SAID FIGURES OF ADDITIONAL PRODUCTION SHOULD BE UTILIZED FOR EXTRAPOLATING THE SALES IN THE HANDS OF THE ASSESSEE FOR THE ENTIRE YEAR. ADMITTEDLY, THE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WHICH IS TO BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT IN CASE THE SAID ADDITIONAL INCOME HAS NOT B EEN ADDED WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE FOR THE RESPECTIVE YEARS, THE SAME MAY BE DIRECTED TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY, WE DIRECT THE ASSESSING RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE R ECORDS FOR THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES, IN THE H ANDS OF THE ASSESSEE. WE HAVE HEARD BUNCH OF APPEALS AND IN SOME YEARS, THERE IS NO ADMISSION OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND IN THOSE YEARS IN THE ABSENCE OF ANY EVIDENCE AND / OR ANY INVESTIGATION OR INQUIRY MADE BY THE ASSESSING OFFICER AND WHERE THE ASSESSING OFFICER HAS FAILED TO COLLECT ADDITIONAL EVIDENCE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE, BY WAY OF EXTRAPOLATION OF SALES FOR 300 DAYS ON ACCOUNT OF ANY EVIDENCE FOUND IN ANY PRECEDING OR SUCCE EDING YEARS. FURTHER, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE, WHERE NO PETITION HAS BEEN FILED BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION IN ANY OF THE RESPECTIVE YEARS OR BEFORE THE EXCISE AUTHORITIES. 89. SINCE WE HAVE DELETED THE A DDITION IN THE HANDS OF ASSESSEE ON BOTH ACCOUNTS I.E. ADDITION MADE ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AND ADDITION PROPOSED ON THE BASIS OF EVIDENCE FOUND FOR THE PART OF THE YEAR OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, NEXT ADDITION MADE IN THE HANDS OF THE ASSESSEE I.E. ALLEGED INVESTMENT IN THE PURCHASES FOR EFFECTING SUCH SALES WHICH GOODS HAVE BEEN CLANDESTINELY REMOVED, IS NOT SUSTAINABLE. ACCORDINGLY, WE HOLD THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ALLEGED INVESTMENT IN PURCHASES UNDER SECTION 69C OF THE ACT. ITA NO. 2 45 /PN/20 1 5 SHIVSAGAR STEEL ROLLING MILLS 7 10. THEREAFTER, CORRIGENDUM ORDER WAS PASSED BY THE TRIBUNAL SUBSTITUTING PARA 88 OF THE TRIBUNAL VIDE ORDER DATED 17.02.2016 AND IT WAS HELD AS UNDER: - 3. ON PERUSA L OF THE RECORD, WE FIND THAT BY AN ERROR, THE FINDINGS OF THE TRIBUNAL IN PARA 88 WITH SPECIAL REFERENCE TO FROM LINE 17 TO 22, NEEDS CORRECTION TO THE EXTENT THAT THE ADDITIONAL INCOME TO BE ADDED IN THE HANDS OF THE ASSESSEE IS EQUIVALENT TO PROFITS ON SUPPRESSED PRODUCTION @ 4% OR ACTUAL GP RATE DECLARED BY THE ASSESSEE WHICHEVER WAS HIGHER. IN VIEW THEREOF, WE PASS THIS CORRIGENDUM ORDER AND THE PARA 88 I.E. FROM LINE 17 TO 22 WOULD NOW BE SUBSTITUTED BY FOLLOWING PARA. 88. ADMITTEDLY, THE ASSESS EE HAD OFFERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WHICH IS TO BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT IN CASE T HE SAID ADDITIONAL INCOME HAS NOT BEEN ADDED WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE FOR THE RESPECTIVE YEARS, THE SAME MAY BE DIRECTED TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY, WE DIRECT THE ASS ESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFO RE THE EXCISE AUTHORITIES, IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE IN THE HANDS OF ASSESSEE, THE ADDITIONAL INCOME @ 4% OR ACTUAL G.P. RATE DECLARED BY THE ASSESSEE FOR THAT YEAR, WHICHEVER IS HIGHER, ON VALUE OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE BEFORE MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS, THE ASSESSEE IS DIRECTED TO FILE THE REQUISITE DETAILS OF PROCEEDIN GS BEFORE THE EXCISE AUTHORITIES, BEFORE THE ASSESSING OFFICER IN ORDER TO COMPUTE THE ADDITIONAL INCOME IN THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS. 11. IN THE FACTS OF THE PRESENT CASE BEFORE THE TRIBUNAL ADMITTEDLY, THERE WAS CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY TO THE EXTENT OF RS.30,62,540/ - . FOLLOWING THE RATIO LAID DOWN IN EARLIER CASES, THE ASSESSING OFFICER IS DIRECTED TO COMPUTE THE INCOME IN THE HANDS OF ASSESSEE BY APPLYING GP RATE AT 4% ON SAID VALUE OF RS. 30,62,5 40/ - OR BY APPLYING HIGHER GP RATE, IF ANY, SO DECLARED BY THE ASSESSEE. HOWEVER, NO ADDITION WAS MADE UNDER SECTION 69C OF THE ACT ON ACCOUNT OF UNDISCLOSED PURCHASES ON ITEMS UTILIZED FOR THE MANUFACTURE OF TMT BARS. IT MAY BE KEPT IN MIND THAT THE ASS ESSEE HAS ALREADY DECLARED RS.1,62,315/ - AS INCOME FROM OTHER SOURCES BY TAKING THE GROSS PROFIT AT 5.3%. FURTHER, THE ASSESSEE HAD DECLARED RS.36,785/ - AS ITA NO. 2 45 /PN/20 1 5 SHIVSAGAR STEEL ROLLING MILLS 8 ADDITIONAL INCOME, WHICH MAY BE VERIFIED BY THE ASSESSING OFFICER AS PER DIRECTIONS. IN VIEW THERE OF, THERE IS NO MERIT IN THE ORDER OF ENHANCEMENT PASSED BY THE CIT(A) BY TAKING THE TOTAL PURCHASES AS INCOME FROM OTHER SOURCE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED AS INDICATED ABOVE. 1 2 . IN THE RESULT, THE APPEAL OF THE ASSE SSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 8 TH DAY OF JU LY , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 8 TH JU LY , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 2 , NASHIK ; 4. / THE CIT - 2 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE