The ACIT, Central Circle-4, Surat V. Shree Ganesh Synthetics, Surat

ITA 2603/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68025 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Keywords: Business income; Income from undisclosed sources; Search and seizure; Loose papers; Reason to believe
• Section: 143(3); 145; 132

Judgement Text

ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, A HMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 592 & 2606 /AHD/2010 (ASSESSMENT YEAR: 2006-07 & 07-08) THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S SHREE BALAJI FABRICS 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN. NO. AASFS7995Q (APPELLANT) (RESPONDENT) ITA NO. 597 & 2604/AHD/2010 (ASSESSMENT YEAR: 2006- 07 & 07-08) THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S T.N. FABRICS 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN NO. AABFT4790R (APPELLANT) (RESPONDENT) ITA NO. 1919 & 2605/AHD/2010 (ASSESSMENT YEAR: 2006-07 & 07-08) THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S MAHALAXMI FABRICS 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN NO. AAIFM6540R (APPELLANT) (RESPONDENT) ITA NO. 593 & 2603/AHD/2010 (ASSESSMENT YEAR: 2006-07 & 07-08) ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 2 THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S SHREE GANESH SYNTHETICS 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN NO. AAUFS3053R (APPELLANT) (RESPONDENT) ITA NO. 595 & 2607/AHD/2010 (ASSESSMENT YEAR: 2006-07 & 07-08) THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S AMBIKA FABRICS 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN NO. AAEFA1668E (APPELLANT) (RESPONDENT) ITA NO. 596 & 2608/AHD/2010 (ASSESSMENT YEAR: 2006-07 & 07-08) THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S SHREE RAM METALIC INDUSTRIES, 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN NO. AAKFS0610E (APPELLANT) (RESPONDENT) ITA NO. 594/AHD/2010 (ASSESSMENT YEAR: 2006 -07) THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S B.T. FABRICS, 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN NO. AACFB6378C (APPELLANT) (RESPONDENT) ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 3 ITA NO. 1918/AHD/2010 (ASSESSMENT YEAR: 2006-07) THE A.C.I.T., CENTRAL CIRCLE- 4 SURAT V/S M/S GANGESHWAR FABRICS, 3/1810, GHAMLAWAD, SALABATPURA, SURAT PAN NO. AAEFG5337Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.C. MATHEWS SR. D.R. RESPONDENT BY : SHRI RAJESH SHAH A.R. WITH PROF. S. S AMPATH. ( )/ ORDER DATE OF HEARING : 26-11-201 3 DATE OF PRONOUNCEMENT : 13 -12-2013 PER BENCH. 1. THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF CIT-A, SURAT IN CASE OF ITA NOS. 592, 593,594,595, 596 AND 597/A HD/2010 DATED 27.11.2009 IN ITA NOS. 2603,2604, 2605,2606,2607 & 2608/AHD/2010 DATED 24.06.2010 AND ITA NOS. 1918 & 1919/AHD/2010 DATED 30.03.2010. 2. BEFORE US AT THE OUTSET BOTH THE PARTIES SUBMITTED THAT THOUGH THE APPEALS ARE OF DIFFERENT ASSESSEES BUT ARE OF THE SAME GROU P AND ALL THE PRESENT APPEALS ARISE OUT THE SAME SEARCH ACTION AND ARE TH EREFORE IDENTICAL AND ARE SIMILAR EXCEPT FOR THE AMOUNTS. IT WAS FURTHER SUBMITTED THAT THE SUBMISSION MADE BY THEM IN CASE OF ONE APPEAL WOULD THEREFORE BE ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 4 APPLICABLE TO ALL THE OTHER CASES AND THEREFORE THA T ALL THE APPEALS CAN BE HEARD TOGETHER. IN VIEW OF THE AFORESAID FACTS WE PROCEED TO DISPOSE OF ALL THE APPEALS BY A CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. FOR THE PURPOSE OF SIMPLICITY WE PROCEED WITH THE FACTS OF CASE IN ITA NO. 592/AHD/2010. (SHREE BALAJI FABRICS) 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER:- 4. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON 14.12.2005 AT THE RESIDENTIAL PREMISES OF SH RI NAGINDAS T. KAPADIA AND SHRI ASHOK H. JARIWALA OF TNK GROUP AND SURVEY ACTION UNDER SECTION 133 OF THE ACT WERE CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE GROUP ON THE SAME DATE. THE ASSESSEE F IRM IS ONE OF THE CONCERNS OF TNK GROUP AND IS ENGAGED IN THE BUSINES S OF MANUFACTURE, TRADING AND SALE OF METALLIC THREADS (ZARI). 5. DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS, BOOKS OF ACCOUNTS/DOCUMENTS BELONGING TO THE ASSESSEE WAS FO UND AND SEIZED. ASSESSEE FILED ITS RETURN OF INCOME ON 31.12.2006 D ECLARING TOTAL INCOME AT RS. 1,47,077/-. THE CASE WAS TAKEN UP FOR SCRUT INY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE A CT VIDE ORDER DATED 31.12.2007 AND THE TOTAL INCOME WAS DETERMINED AT R S. 27,99,080/-. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 27.11.2009 ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A ), THE REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWIN G GROUNDS:- UNDER INVOICING OF MACHINERY ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 5 I) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION AT RS.24,14,000/- MADE ON ACCOUNT OF UNRECORDED INVESTMENT IN PURCHASE OF MAC HINERY BASED ON THE PAPERS SEIZED DURING THE COURSE OF SEARCH & SEIZURE. II) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE VALUATION OF MACHINERY SHOWN BY THE ASSESSEE IN ITS BOOKS, IGNORING THE PAGE NO.77 OF L OOSE PAPER FILE SEIZED VIDE ANNEXUREA-1/37 WHICH INDICATES THE HIGHER PRICE OF SIMILAR CONTEMPORANEO US IMPORTS OF EMBROIDERY MACHINES, WHICH CAN BE RELIED UPON BY THE ASSESSING OFFICER IN ACCORDANCE WITH THE RULING OF APEX COURT IN A CASE VIDE AIT- 2007-249 WHERE IN THE APEX COURT HAS HELD THAT IN A DJUDICATION PROCEEDINGS, THE ASSESSING OFFICER HAS TO EXAMINE THE PROBATIVE VALUE OF THE DOCUMENTS ON WHICH RELIANCE IS BEING PLACED BY THE DEPARTMENT IN SUPPORT OF ITS ALLEGATION OF UNDER VALUATION. III) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE ASSESSEE'S CLAIM THAT THE CONTRACT F OR PURCHASE OF MACHINERY FROM JUKSAN MACHINERY LTD AS REFLECTED IN PAGE NOS 15,73 & 74 SEIZED VIDE ANNEXURE A-1/37 SHOWING THE PRICE OF EMBROIDERY MAC HINE @ $36,000/- PER SET HAD BEEN CANCELLED IGNORING THAT THE PURCHASE OF MACHINES WERE EXECUTE D ON THE SAME DATE I.E 14.07.2005 FROM THE SAME PARTY , WHICH SHOWS THE PROBATIVE VALUE OF THE MACH INERY IV) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE ASSESSEE'S CLAIM THAT THE CONTRACT FO R PURCHASE OF MACHINERY FROM JUKSAN MACHINERY LTD AS REFLECTED IN PAGE NOS 15,73 & 74 OF ANNEXURE A-1/37 SEIZED SHOWING THE PRICE OF EMBROIDERY MACHI NE @ $36,000/- PER SET HAS BEEN CANCELLED IGNORING THAT THAT THE BLANK INVOICES OF M/S INFINI TY TECH SEIZED IN ORIGINAL VIDE ANNEXURE A-1/37 (LOOSE PAPER FILE) FROM THE RESIDENCE OF PARTNERS C AST ASPERSION THAT ASSESSEE HAD UNDER INVOICED THE MACHINERY WHICH WAS NOT AT ALL EXPLAINED BY THE ASS ESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR APPELLATE PROCEEDINGS. V) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN A CCEPTING THE ASSESSEE'S PLEA THAT PAGE NO.76 SEIZED VIDE ANNEXURE A-1/37 OF LOOSE PAPER FILE RELATING T O PAPER ,EVIDENCE OF FOREIGN EXCHANGE TRANSACTION O F US $L,20,000/-WITH CERTAIN LAESSAR A.G SWISSS EMBRO IDERY MACHINERY MANUFACTURE IS RELATED TO THE EMBROIDERY MACHINE MANUFACTURER LAESSAR A.G. SWITZE RLAND, FROM WHOM THE ASSESSEE HAS NOT IMPORTED IGNORING THAT ,THE ASSESSEE FAILED TO EXPL AIN THE NATURE OF PAYMENT OF US $ L,20,000/-TO LAESSAR A.G SWISS EMBROIDERY MACHINE MANUFACTURER A S REFLECTED IN PAGE NO.76 OF ANNEXURE A- L/37,SEIZED DURING THE COURSE OF SEARCH, WHICH INDI CATED THE VALUE OF MACHINERY AT HIGHER RATE. VI) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE RATIO LAID DOWN IN THE JUDGMEN T OF THE HON. APEX COURT IN THE CASE OF SUMATI DAYAL VS CIT 214 ITR 801, WHEREIN THE APEX COURT HAS OBSERVED THAT THE APPARENT MUST BE CONSIDERED THE R EAL UNTIL IT IS SHOWN THAT THERE ARE REASON TO BELIEVE THAT THE APPARENT IS NOT THE REAL AND THAT THE TAXING AUTHORITIES ARE ENTITLED TO LOOK IN TO T HE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY A ND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES. SUPPRESSION OF RENT VII) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION AT RS.2,37,999/- MADE ON ACCOUNT OF SUPPRESSED RENT OF MACHINERY BASED ON TH E PAPERS /RENT AGREEMENT SEIZED DURING THE COURSE OF SEARCH & SEIZURE. VIII) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION AT RS.2,37,99/- MADE ON ACCOUNT OF SUPPRESED RENT ON MACHINERY ACCEPTING TH E PLEA OF THE ASSESSEE THAT AGREEMENT WITH RAMANUJ EMBROIDERY AND JAY AMBE CORP FOUND AND SEIZ ED DURING THE COURSE OF SEARCH WAS CANCELLED AND ENTERED INTO CONTACT WITH MUKUND EMBRIODERY AT A RATE OF RS.4,000/- PER MONTH IGNORING THAT THE RENT AGREEMENT IS FOUND TO BE PROPERLY SIGNED BY TH E INTERESTED PARTIES AND INDICATED THE TERMS AND CONDITIONS AGREED UPON FOR LEASING THE MACHINES AT THE MONTHLY RENT OF RS.83,333/-AND ON BEING ASKED NO EXPLANATION WAS OFFERED BY THE ASSESSEE FOR EXEC UTING THE RENT AGREEMENT AT A MUCH LOWER RATE. IX)IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT (A) BE SET ASIDE AND THAT THE A.O. BE RESTORED T O THE ABOVE EXTENT. GROUND NO. 1 AND ITS SUB GROUNDS ARE INTERCONNECTED AND ARE WITH RESPECT TO UNDER INVOICING OF MACHINERY. ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 6 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON PER USING THE BOOKS OF ACCOUNTS OF THE ASSESSEE, A.O. NOTICED THAT ASSESSE E WAS IN POSSESSION OF 2 IMPORTED EMBROIDERY MACHINES MANUFACTURED BY S AURER COMPANY (SWITZERLAND). THESE MACHINES WERE CLAIMED TO BE SE COND-HAND, MANUALLY OPERATED AND IMPORTED FROM ABROAD AT INDIA N RUPEE RATE OF RS. 4,00,000/- TO 4,50,000/- APPROXIMATELY. THE VALUES WERE ALSO RECORDED IN THE BOOKS OF ACCOUNT. DURING THE COURSE OF SEARCH O PERATIONS CERTAIN LOOSE PAPERS RELATED TO IMPORT, VALUATION, ACQUISIT ION AND RENT INCOME OF THE EMBROIDERY MACHINES WERE FOUND AND SEIZED. PAGE NO. 77 SEIZED VIDE ANNEXURE A1/37 OF LOOSE PAPER FILE REFLECTED PURCHA SE OF 2 SECOND-HAND COMPUTERIZED SAURER BRAND 21 YARDS EMBROIDERY MACH INES FROM TURKEY. THE IMPORT INVOICE SHOWED THAT THE MACHINES WERE WO RTH US $1,80,000/= RS. 82,44,000/- WHICH ACCORDING TO THE A.O. INDICATED THAT THE ACTUAL IMPORT PRICE OF THE MACHINERY WAS QUITE HIGH. SEIZED PAPER ALSO EVIDENCED FOREIGN EXCHANGE TRANSACTION OF US $ 1,20,000/- WITH CERTAIN LAESSAR A.G, SWISS EMBROIDERY MACHINERY MAN UFACTURER. THIS TRANSACTION HAS BEEN DETAILED WITH SWIFT CODE OF ZU RICH AND BANK ACCOUNT OF THE RECIPIENT PARTY. THIS DOCUMENT WAS T AKEN TO BE BELONGING TO ASSESSEE UNDER SECTION 292C OF THE ACT AND THE A MOUNT WAS LINKED TO THE PAYMENT OF EMBROIDERY MACHINE PURCHASED BY THE ASSESSEE. 7. DURING THE COURSE OF SEARCH IMPORT CONTRACTS UNDERT AKEN WITH JUKSAN MACHINERY LTD. (SOUTH KOREA) ON 14.07.2005 FOR PURC HASE OF 6 NUMBERS OF 2S-55 SCHIFFLI MACHINES FOR CONSIDERATION OF US $ 2,16,000/- PER MACHINE WAS FOUND. FURTHER, BLANK INVOICES OF INFIN ITY TECH. INC. FROM WHOM THE MACHINERY WERE CLAIMED TO HAVE BEEN PURCHA SED WERE SEIZED ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 7 WHICH ACCORDING TO THE ASSESSING OFFICER ESTABLISHE D THAT THE INVOICES WERE PREPARED AT THE PREMISES OF THE ASSESSEE. 8. DURING THE COURSE OF SEARCH LOOSE PAPER SHOWING AN AGREEMENT OF RENTAL VALUE OF MACHINERY WAS FOUND WHEREIN IT WAS STATED THAT RENT HAS BEEN AGREED AT RS. 83,333/- PER MACHINE PER ANNUM AND T HE AGREEMENT WAS SIGNED BY SHRI NAGINDAS KAPADIA AND SHRI JARIWALA, THE LESSORS AND SHRI SANJAY THE LESSEE PARTY. IT WAS THEREFORE CONCLUDED THAT THE ANNUAL RENT OF THE EMBROIDERY MACHINE WAS AGREED AT RS. 10 LAKH PE R ANNUM. 9. CONSIDERING THE AFORESAID FACTS, A.O. CONCLUDED THA T ASSESSEE HAS OBTAINED MACHINERY FROM ABROAD BY WAY OF UNDER INVO ICING AND HAS UTILIZED THE HIGH VALUE BUT OFFERED LOW RENTALS TO TAX. A.O. WAS OF THE VIEW THAT THERE HAS BEEN EVASION OF CUSTOM DUTY AS WELL AS INCOME TAX OF THE INVESTMENT MADE IN MACHINERY AND THE RENTALS RE CEIVED THEREON. THE SUBMISSION OF THE ASSESSEE BEFORE THE A.O. THAT THE IMPUGNED HIGH VALUE MACHINERY WERE NEVER AFFECTED AND WERE MERE ESTIMAT ES/QUOTATIONS. THE ASSESSEE ALSO SUBMITTED THAT HIGH RENT AGREEMENTS I N REGARD TO THE EMBROIDERY MACHINES WERE CANCELLED AND NOT EXECUTED . THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O . A.O ACCORDINGLY CONCLUDED THAT THE ASSESSEE HAS FAILED TO MAINTAIN AND FURNISHED THE PROPER DETAILS OF VALUE OF IMPORT OF MACHINERY AND THE UNDER VALUATION HAS BEEN RESORTED TO SUPPRESS THE COST OF CAPITAL A PPEARING THE BOOKS AND FACILITATE THE INFUSION OF INCOME FROM UNDISCLOSED SOURCES INTO THE CAPITAL GOODS AND EVADED CUSTOM AND OTHER DUTIES. HE THEREF ORE CONCLUDED THAT THE ACCOUNT MAINTAINED AND FURNISHED CANNOT BE ACCE PTED AS CORRECT AND ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 8 THEREFORE THE ACCOUNTS WERE REJECTED UNDER SECTION 145 OF THE ACT. A.O. THEREAFTER DETERMINED THE VALUE OF EACH MACHINERY T O BE RS. 16,48,800/- ON THE BASIS OF SEIZED MATERIAL AND ACCORDINGLY DET ERMINED THE AMOUNT OF RS. 24,14,000/- (BEING THE VALUE OF 2 MACHINES LESS THE VALUE RECORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS) AS DEEMED IN COME UNDER SECTION 69B OF THE ACT AND ADDED TO THE INCOME. AGGRIEVED B Y THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 2.2 I HAVE CONSIDERED THE FACTS AND THE SUBMISSION. I A GREE WITH THE APPELLANTS VIEW FOR THE FOLLOWING REASONS: A) PAGE NO. 77 SEIZED VIDE ANNEXURE A-1/37 OF LOOSE PA PER FILE REFLECTS THAT PURCHASE OF 2 SECOND- HAND COMPUTERIZED SAURER BRAND 21 YARDS EMBROIDERY MACHINES, MODEL 404 HP, FROM TURKEY HAS BEEN MADE BY CERTAIN ARMO SYNTHETICS PVT. LTD. THIS IMPORT INVOICE RELATES TO THE MACHINES WORTH US $ 1,80,000/ + RS. 82,44,000/- OF THE SAURER MACH INERY WHICH THE APPELLANT HAS NOT IMPORTED. THIS MACHINE IS QUITE DIFFERENT THAN THE APPELLANT S IMPORTED MACHINE HENCE, IT CANNOT BE MADE THE BASIS FOR THE ADDITION BY HOLDING THAT THE APPE LLANTS MACHINES PRICES ARE UNDERVALUED. B) PAGE NO. 76 SEIZED VIDE ANNEXURE A1/37 OF LOOSE PAP ER FILE RELATING TO PAPER, EVIDENCE OF FOREIGN EXCHANGE TRANSACTION OF US $ 1,20,000/- WITH CERTAI N LAESSAR A.G., SWISS EMBROIDERY MACHINERY MANUFACTURER. THE AMOUNT IS IN RELATION TO PURCHASE S OF US $ 1,20,000/+ RS. 54,96,000/-. THIS IS RELATED TO THE EMBROIDERY MACHINE MANUFACTURER LAES SAR A.G. OF SWITZERLAND WHICH THE APPELLANT HAS NOT IMPORTED. THIS MACHINE IS QUITE DIFFERENT THAN THE APPELLANTS IMPORTED MACHINE HENCE, IT CANNOT BE MADE THE BASIS FOR THE ADDITION BY HOLDIN G THAT THE APPELLANTS MACHINES PRICES ARE UNDERVALUED. C) THE PAGE NO. 15 OF ANNEXURE A-1/37 WHICH SHOWS PRIC E OF MACHINE AS US $ 36,000, HAS BEEN MADE BASIS FOR TAKING THE VALUE OF MACHINERY AT US $ 36,000 AND MAKING THE ADDITION IN THE HANDS OF THE APPELLANT. THE APPELLANT HAS SUBMITTED THAT THIS WAS A PROPOSAL WHICH WAS NOT AGREED HENCE, THE SAME WAS CANCELLED. THIS SUBMISSION IS SEEMS TO BE ACCEPTABLE AS THE PAPER SHOWS THAT IT HAS BEEN CANCELLED BY STRIKING OUT AND THE WORD CANCEL IN GUJARATI IS WRITTEN. THERE IS NO SIGNATURE OF THE BUYER WHICH SHOWS THAT IT WAS NOT THE MATERIALIZED CONTRACT NOTE. D) THE PAPER SHOWING THE VALUE OF MACHINERY AS 10,000 $ WHICH THE APPELLANT CLAIMS AS MATERIALIZED CONTRACT, HAS BEEN FOUND IN THE SEARCH ITSELF AS PA GE 72 OF ANNEXURE A-1/37 WHICH SHOWS THAT IT WAS NOT AN AFTERTHOUGHT. ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 9 E) THE APPELLANT HAS MAINTAINED THE PURCHASE INVOICES AND THE CLEARANCE BY THE CUSTOM AUTHORITIES SHOWING THAT VALUE SHOWN IN THE BOOKS WAS ACCEPTED BY THE CUSTOM AUTHORITIES WHILE CLEARING THE GOODS. F) THE A.O. HAS POINTED OUT VARIOUS DISCREPANCIES AND MISTAKES IN THE CERTIFICATE GIVEN BY TEXTILE TECHNICAL CONSULTANT AND' PRODUCED BY THE APPELLANT IN SUPPORT OF VALUATION OF MACHINERY. EVEN IF IT IS TAKEN AS ERRONEOUS CERTIFICATE, IT IS NOT AN EVIDENCE TO TAKE THE VALUE OF MACHINERY AT US $ 36,000 WHILE REJECTING THE APPELLANT'S CLAIM OF VAL UE AT US $ 10,000. G) THERE IS NO OTHER EVIDENCE FOUND TO TAKE THE VALUE OF MACHINERY AT US $ 36,000 EXCEPT LOOSE PAPER PAGE 15 ANNEXURE A-1/37 WHICH WAS CANCELLED AND NOT LEGALLY ENFORCEABLE DOCUMENT. IT ALSO SEEMS THAT IT WAS MERELY A PROPOSAL. IN VIEW OF THE THESE FACTS, IT IS HELD THAT THE A.O . WAS NOT JUSTIFIED IN TAKING THE VALUE OF MACHINER Y AT US $ 36,000/- I.E. RS. 16,48,800/- AND MAKING TH E ADDITION OF RS. 24,14,000/-. ACCORDINGLY, THE ADDITION IS DELETED. 10. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NO W IN APPEAL BEFORE US. BEFORE US THE LD. D.R. STRONGLY SUPPORTED THE O RDER OF A.O. HE POINTED TO THE VARIOUS OBSERVATIONS OF A.O. IN THE ORDER AND ALSO TOOK US THROUGH THE VARIOUS PAPERS PLACED IN THE PAPER BOOK OF THE ASSESSEE IN SUPPORT OF HIS CONTENTION. HE THEREFORE SUBMITTED THAT CONSIDERING THE FACTS, SEIZED MATERIAL, THE A.O. WAS FULLY JUSTIFIE D IN MAKING THE ADDITIONS. HE THUS SUPPORTED THE ORDER OF A.O. 11. THE LD. A.R. ON THE OTHER HAND REITERATED THE SUBMI SSIONS MADE BEFORE CIT(A) AND POINTED TO THE WRITTEN SUBMISSIONS MADE BY THEM BEFORE CIT(A) AND WHICH HAS BEEN REPRODUCED IN THE ORDER O F CIT(A). HE THUS SUPPORTED THE ORDER OF CIT(A). 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THAT THE IMPORT INVOICE WHICH WAS SEIZED RELATES TO THE PURCHASE OF 2 SECOND ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 10 HAND COMPUTERIZED SAURER BRAND MACHINERIES US $ 1, 80,000/- EQUIVALENT TO RS. 82,44,000/- WAS NOT IMPORTED AND WAS QUITE D IFFERENT FROM THE OTHER MACHINE IMPORTED BY THE ASSESSEE AND THEREFOR E CANNOT BE THE BASIS FOR HOLDING THAT THE MACHINE PRICES WERE UNDER VALU ED. WITH RESPECT TO THE PAYMENT OF $ 1,20,000/- I.E. RS. 44,96,000/- W AS IN RELATION TO THE PAYMENT MADE TO LAESSAR A.G. OF (SWITZERLAND) AND T HE MACHINE WAS QUITE DIFFERENT FROM THAT OF THE MACHINE IMPORTED B Y THE ASSESSEE AND THEREFORE IT COULD NOT BE MADE THE BASIS OF CONCLUD ING THAT THE MACHINES IMPORTED BY ASSESSEE WERE UNDER VALUED. HE HAS FURT HER NOTED THAT THE BASIS FOR TAKING THE VALUE OF MACHINERY AT $ 36,000 /- WAS ONLY A PROPOSAL WHICH WAS NOT AGREED AND HENCE THE SAME WAS CANCELL ED. HE HAS FURTHER GIVEN A FINDING THAT THE PAPER SEIZED AT THE TIME O F SEARCH SHOWS IT TO BE CANCELLED BY STRIKING OUT AND IT DID NOT HAVE THE S IGNATURE OF BUYER WHICH SHOWS THAT THE CONTRACT DID NOT MATERIALIZE. HE HAS FURTHER GIVEN A FINDING THAT ASSESSEE HAS MAINTAINED THE PURCHASE INVOICES AND THE VALUE SHOWN IN THE BOOKS WAS ACCEPTED BY CUSTOM AUTHORITIES WHI LE CLEARING THE GOODS. HE HAS THUS HELD THAT NO EVIDENCE WAS FOUND FOR MAKING THE ADDITIONS. BEFORE US, THE D.R. COULD NOT CONTROVERT THE FINDINGS OF CIT(A) NOR HAS BROUGHT ANY CONTRARY MATERIAL ON REC ORD. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WIT H THE ORDER OF CIT(A). AND THUS THIS GROUND OF REVENUE IS DISMISSED. THE OTHER GROUND IS WITH RESPECT TO SUPPRESSION OF RENT. 13. A.O NOTED THAT ASSESSEE HAS ENTERED INTO AGREEMENT OF RENT AT RS. 83,333/- PER MACHINERY PER MONTH FOR LEASING OUT TH E MACHINERY AND THUS ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 11 THE ANNUAL RENT OF THE EMBROIDERY MACHINERY WAS RS. 10 LAKHS PER ANNUM. HE FURTHER NOTED THAT IN THE RETURN OF INCOME, ASSE SSEE HAS SHOWN RENT OF RS. 48,000/- PER ANNUM. THE ASSESSEE SUBMITTED BEFO RE THE A.O. THAT THE LOOSE PAPER SEIZED AT THE TIME OF SEARCH REFLECTED THE ROUGH WORKING OF THE PROPOSED CONTRACT WHICH DID NOT MATERIALIZE ON ACCOUNT OF DISPUTE AND THEREFORE THE SAME WAS CANCELLED. THE A.O. DID NOT FIND THE CONTENTIONS OF THE ASSESSEE ACCEPTABLE. HE CONCLUDE D THAT THE ASSESSEE WAS FOUND TO BE ENGAGED IN UNDER INVOICING OF MACHI NERY AND SUPPRESSION OF RENT EMERGING FROM THE LETTING OUT O F MACHINERY. HE ACCORDINGLY DETERMINED THE RENT RECEIPT AT RS. 83,3 33/- PER MONTH IN THE LIGHT OF VALUE OF MACHINERY AT RS. 16,48,800/- AND THEREAFTER DETERMINED THE RENT OUT OF LEASING OF EMBROIDERY MACHINERY AND MADE AN ADDITION OF RS. 2,37,999/-. AGGRIEVED BY THE ORDER OF A.O., ASS ESSEE CARRIED THE MATTER BEFORE CIT(A) CIT(A) AFTER CONSIDERING THE S UBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 3.2 I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS . I AGREE WITH THE APPELLANTS VIEW FOR THE FOLLOWI NG REASONS: A) THE A.O. HAS MADE THE ADDITION ON THE BASIS OF N OTINGS MADE ON PAGE 19 & 20 OF ANNEXURE A-1/37 WHICH IS AGREEMENT WITH SHREE RAMANUJ EMBRIODERIES AND JAI AMBE CORPORATION. THE APPELLANT HAS SUBMITTED THAT THESE PROPOSED CONTRACT DID NOT MATE RIALIZED HENCE, CANCELLED. THIS SUBMISSION OF THE APPELLANT SEEMS TO BE ACCEPTABLE AS IN THE SEIZED P APERS, THE FIGURES HAVE BEEN SMUDGED AND THE APPELLANT HAS ALSO FILED THE CONFIRMATION FROM THE SAID PARTIES INDICATING THAT NO AGREEMENT WAS MATERIALIZED. B) THIS PROPOSED AGREEMENT WAS SIGNED BETWEEN SANJA Y JAIN AND THE APPELLANT'S REPRESENTATIVE. THE A.O. HAS OBSERVED THAT THIS IS THE SAME SANJAY JAIN WHO FINALLY ENTERED INTO THE AGREEMENT WITH THE APPELLANT. ON THIS, THE APPELLANT HAS SUBMITTED THA T IT HAS ACTUALLY ENTERED INTO THE AGREEMENT WITH M/S.MUKUND EMBRIODERY AND SANJAY JAIN HAS NO CONNEC TION WITH THIS FIRM. THE APPELLANT'S THIS CONTENTION IS ACCEPTABLE AS THERE IS NO EVIDENCE OF ANY CONNECTION OF SANJAY JAIN WITH M/S.MUKUND EMBRIODERY. FURTHER, THERE IS ALSO NO EVIDENCE THAT M/S.MUKUND EMBRIODERY IS RELATED IN ANY MANNER WITH M/S.SHREE RAMANUJ EMBRIODERY OR M/S.JAI AMBE C ORPORATION. ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 12 C) WHEN THE APPELLANT HAS FINALLY NOT ENTERED INTO THE AGREEMENT WITH SHREE RAMANUJ EMBRIODERIES OR JAI AMBE CORPORATION, THE RENT FIGURE APPEARING IN THE PROPOSED AGREEMENT WITH THESE FIRMS, CANNOT FORM BASIS FOR ESTIMATING RENT FROM MUKUND EMBRIODE RY WITH WHICH THE AGREEMENT FINALLY MATERIALIZED. D) THERE IS NO EVIDENCE, OR ANY COMPARABLE CASE AVA ILABLE FOR HIGHER RENT RECEIVABLE FOR THIS TYPE OF MACHINERY, WHICH THE APPELLANT HAD. E) THE SEIZED PAPER BF-18/BS-1 DID NOT HAVE MENTIO N OF NAME OF ANY PARTY HENCE IT CANNOT BE CORRELATED WITH THE ULTIMATELY MATERIALIZED PARTY M UKUND EMBRIODERY. F) THE APPELLANT ACTUALLY ENTERED INTO AGREEMENT W ITH MUKUND EMBRIODERY AND THIS WAS ALSO FORMING PART OF SEIZED MATERIAL HENCE, IT CANNOT BE SAID AS AN AFTERTHOUGHT. IN VIEW OF THESE FACTS, IT IS HELD THAT THE ASSESSI NG OFFICER WAS NOT JUSTIFIED IN TAKING THE RENT REC EIVED @ RS. 83,333/- AS RENT PER MONTH AND MAKING THE ADD ITION OF RS. 2,37,999/- ACCORDINGLY, THE ADDITION IS DELETED. 14. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. STRONGLY SUPPORTED THE ORDER OF A.O. AND TOOK US THROUGH THE FINDINGS OF A.O. AND ALSO THE VARIOU S PAGES OF THE PAPER BOOK OF THE ASSESSEE IN HIS SUPPORT. HE THUS SUBMIT TED THAT THE A.O. WAS FULLY JUSTIFIED IN MAKING ADDITIONS. HE THUS SUPPO RTED THE ORDER OF A.O. THE LD. A.R. ON THE OTHER HAND REITERATED THE SUBMI SSIONS MADE BEFORE CIT(A) AND POINTED TO THE WRITTEN SUBMISSIONS MADE BY THEM BEFORE CIT(A) WHICH ARE REPRODUCED IN THE ORDER OF CIT(A). HE THUS SUBMITTED THAT CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADD ITION. HE THUS SUPPORTED THE ORDER OF CIT(A). 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT T HE BASIS OF ADDITION WAS THE AGREEMENTS SEIZED BUT HOWEVER THE AGREEMENT WITH SHRI RAMANUJ EMBROIDERY AND JAY AMBE CORPORATION DID NOT MATERIA LIZE AND HENCE CANCELLED. HE HAS ALSO NOTED THAT IN THE SEIZED PA PER, THE FIGURES WERE ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 13 SMUDGED AND ASSESSEE HAD ALSO FILED CONFIRMATION FR OM THE AFORESAID PARTIES INDICATING THAT NO AGREEMENT HAS MATERIALIZ ED. HE HAS FURTHER GIVEN A FINDING THAT ASSESSEE HAD ENTERED AN AGREEM ENT WITH MUKUND EMBROIDERY TOWARDS RENTING OF MACHINERY BUT THERE W AS NO EVIDENCE OF ANY CONNECTION OF SHRI SANJAY JAIN (WHOSE SIGNATURE WAS FOUND ON THE RENT AGREEMENT FOUND AT THE TIME OF SEIZURE) WITH M UKUND EMBROIDERY. HE HAS FURTHER GIVEN A FINDING THAT THE RENT FIGURE S APPEARING IN THE PROPOSED AGREEMENT WITH RAMANUJ EMBROIDERY OR JAY A MBE CORPORATION CANNOT BE THE BASIS FOR ESTIMATING RENT FROM MUKUND EMBROIDERY WITH WHOM THE AGREEMENT HAD MATERIALIZED. HE HAS ALSO N OTED THAT THE SEIZED PAPER DID NOT HAVE THE NAME OF ANY PARTY AND HENCE IT CANNOT BE CO- RELATED WITH MUKUND EMBROIDERY. HE HAS FURTHER NOTE D THAT THERE WAS NO EVIDENCE OR ANY COMPARABLE CASE AVAILABLE FOR HIRE RENT RECEIVABLE FOR MAKING ADDITION ON ACCOUNT OF RENT. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF CIT(A) BY BRINGING ANY C ONTRARY MATERIAL ON RECORD. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A) AND THUS THIS GROUND OF REVE NUE IS DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ITANO.593,594,595,596,597,2603,2604,2605,2606,26072 608/AHD/2010 17. IN ALL THESE APPEALS, THE GROUNDS RAISED BY THE REV ENUE ARE SIMILAR TO THAT RAISED IN ITA NO. 592/AHD/2010 HEREINABOVE. ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 14 18. BEFORE US, BOTH THE PARTIES HAVE SUBMITTED THAT THE FACTS OF THE CASE IN ITANOS.593,594,595,596,597,2603,2604,2605,2606,2607 &2608/AHD/2 010 ARE IDENTICAL TO THAT OF ITA NO. 592/AHD/2010 A ND THE SUBMISSIONS MADE BY THEM IN THE CASE OF SHREE BALAJI FABRICS AR E EQUALLY APPLICABLE IN THE PRESENT CASES AND HAVE NO NEW SUBMISSIONS TO MAKE. WE THEREFORE FOR REASONS GIVEN HEREINABOVE WHILE DECIDING THE AP PEAL IN THE CASE OF SHREE BALALJI FABRICS ( ITA NO. 592/AHD/2010) ALSO DISMISS THE GROUNDS RAISED IN PRESENT APPEALS. 19. IN THE RESULT, ALL THE APPEALS OF REVENUE ARE DISMISSED. 1918 & 1919/A/2010 (MS. MAHALAXMI FABRICS & M/S. (GANGESHWAR FABRICS) FOR A.Y. 2006-07. IN BOTH THESE APPEALS, GROUND NO. 1 AND 2 IN RESPEC T OF UNDER INVOICING OF MACHINERY AND SUPPRESSION OF RENT ARE SIMILAR TO THE GROUNDS RAISED BY REVENUE IN ITA NO. 592/AHD/2010 ( SHREE BALAJI FABRICS) AND OTHER APPEALS. 20. BEFORE US BOTH THE PARTIES HAVE SUBMITTED THAT THE GROUNDS 1 AND 2 RAISED IN PRESENT APPEALS ARE IDENTICAL TO THAT OF SHREE B ALAJI FABRICS ITA NO. 592/AHD/2010 AND THE SUBMISSIONS MADE BY HIM IN THE CASE OF SHREE BALAJI FABRICS ARE EQUALLY APPLICABLE IN THE PRESEN T CASE AND THEY HAVE NO NEW SUBMISSIONS TO MAKE. WE THEREFORE FOR REASONS GIVEN HEREINABOVE WHILE DECIDING THE APPEAL IN THE CASE OF SHREE BALA JI FABRICS (ITA NO. ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 15 592/AHD/2010) ALSO DISMISS THE PRESENT GROUNDS OF T HE REVENUE. THUS THESE GROUNDS OF REVENUE ARE DISMISSED. 3 RD GROUND IS WITH RESPECT TO AN ESTIMATION OF GROSS P ROFIT (G.P.) 21. BEFORE US, BOTH THE PARTIES SUBMITTED THAT THE PRES ENT GROUND IN BOTH THE APPEALS ARE SIMILAR THOUGH THE ASSESSEES ARE DIFFE RENT AND THEREFORE THE SUBMISSIONS FOR BOTH THE APPEALS ARE COMMON. WE THE REFORE PROCEED TO DISPOSE OF THIS GROUND OF BOTH THE APPEALS TOGETHER AND PROCEED WITH THE FACTS OF ITA NO. 1918/AHD/2010. 22. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O. N OTICED THAT THE TOTAL SALES FOR ENTIRE ASSESSMENT YEAR 2006-07 HAS BEEN S HOWN AT RS. 36,34,103/- AND THE TURNOVER IN THE SECOND HALF OF THE FINANCIAL YEAR UNDER APPEAL WAS SHOWN AT RS. 11,68,473/- AS COMPARED TO RS. 24,65,630/- IN THE SECOND HALF. HE ALSO NOTICED THAT THE TURNOVER FOR THE ASSESSMENT YEAR UNDER CONSIDERATION HAS DIPPED DRASTICALLY AS COMPA RED TO THE TURNOVER OF RS. 46,53,126/- IN THE IMMEDIATE PRECEDING ASSESSME NT YEAR. HE ALSO NOTICED THAT DURING THE SEARCH OPERATIONS AND ON TH E BASIS OF SEIZED MATERIAL THE SALES UP TO 30.09.2005 WAS TO THE TUNE OF RS. 24,65,630/-. THE ASSESSEE WAS ASKED TO JUSTIFY THE LOW SALES. TH E ASSESSEE INTERALIA SUBMITTED THE REASON TO BE GENERAL RECESSIONARY TRE ND. THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O. A .O. NOTICED THAT POWER AND FUEL EXPENSES WHICH ARE DIRECTLY LINKED T O PRODUCTION HAVE INCREASED BY MORE THAN 4 TIMES TO RS. 3,49,379/- FR OM RS. 80,490/- BUT HOWEVER AS PER THE BOOKS THERE WAS FALL IN PRODUCTI ON. HE ALSO NOTICED ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 16 THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSES SEE HAS SHOWN NET LOSS AS COMPARED TO NET PROFIT OF 1.07% IN THE IMMEDIATE PRECEDING YEAR. HE ALSO NOTICED THAT ASSESSEE HAS FAILED TO FURNISH TH E STOCK REGISTER FOR VERIFICATION. HE THEREFORE REJECTED THE BOOK RESULT S UNDER SECTION 145 OF THE ACT AND THEREAFTER DETERMINED THE SALES IN THE SECOND HALF OF THE FINANCIAL YEAR TO BE AT RS. 24,65,630/- AND THUS DE TERMINING THE TOTAL SALES OF RS. 49,31,260/-. HE THEREAFTER DETERMINED THE G ROSS PROFIT AT 4.37% WHICH WAS SHOWN BY THE ASSESSEE AND ACCORDINGLY DET ERMINED THE GROSS PROFIT ON THE ESTIMATED SALES OF RS. 49,31,260/- AN D MADE AN ADDITION OF RS. 43,073/-. AGGRIEVED BY THE ORDER OF A.O., ASSE SSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DELETED THE ADDITION B Y HOLDING AS UNDER:- 3. THE APPELLANT HAS SUBMITTED THAT HE HAS CORRECTLY S HOWN THE SALES AND THERE IS NO MATERIAL SHOWING THAT THE SALES HAVE BEEN SUPPRESSED HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ESTIMATING THE ENHANCED SALES. FURTHER, THE G.P. S HOWN BY THE APPELLANT IS 7.87% WHICH IS BETTER THAN THE LAST YEARS G.O. OF 7.11% HENCE, THE ADDIT ION IS NOT CALLED FOR. 4. I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS. I AGREE WITH THE APPELLANTS VIEW. THERE IS NO EVIDENCE THAT THE APPELLANT HAS SUPPRESSED THE SALE S AND THE G.P. RATE SHOWN IS BETTER THAN THE LAST YEARS G.P. HENCE, THE ASSESSING OFFICER IS NOT JUS TIFIED IN ESTIMATING THE HIGHER SALES AND MAKING THE G.P. ADDITION. ACCORDINGLY, THE ADDITION IS DEL ETE. 23. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A.O. AND ON THE OTHER HAND THE LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE CIT(A) AND THUS SUPPORTED HIS ORDER. 24. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE ASSESSEE HAS SUPPRESSED SALES AND THE G.P. RATE IN FACT WAS BETTER THAN G.P. OF IMMEDIATELY PRECEDING YEAR AND THEREFORE TH E A.O. WAS NOT ITA NOS 592 TO 597/AHD/2010, 2603 TO 2608/AHD/10 ITA NO.1918,1919/AHD/10 . A.Y. 2006-07 & 07- 08 17 JUSTIFIED IN ESTIMATING THE HIGHER SALES AND ESTIMA TING THE G.P. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF C IT(A) NOR COULD BRING ANY CONTRARY MATERIAL ON RECORDS. WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THE GROUND OF REV ENUE IN BOTH THE APPEALS ARE DISMISSED. 25. IN THE RESULT, ALL THE GROUNDS OF THE REVENUE ARE D ISMISSED. 26. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13 - 12 - 2013. SD/- SD/- (D.K.TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD