The ITO, Ward- 1, RAJKOT-GUJARAT V. Saurashtra Iron Forging Pvt. Ltd., RAJKOT-GUJARAT

ITA 337/RJT/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1328 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-03-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 08-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Keywords: Gross profit estimation; Unexplained cash credit; Rejection of books of accounts; Depreciation; Income from undisclosed sources; Bogus loan; Unabsorbed depreciation
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BEN CH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S. S. GOD ARA, J.M.) ( , , ) ITA NO. 337/RJT/2011 (ASSESSMENT YEAR: 2002-03) THE INCOME TAX OFFICER, WARD 1(3), RAJKOT VS. SAURASHTRA IRON FORGING PVT. LTD., PLOT NO.7 & 8, SURVEY NO.211, VERAVAL, SHAPER, RAJKOT PAN: AADCS1608N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C. S. ANJARIA, SR. D. R. RESPONDENT BY : SHRI MEHUL RANPURA, A.R. DATE OF HEARING : 14-03-20 16 DATE OF PRONOUNCEMENT : 08-04-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY REVENUE IS AGAINST THE ORDER O F CIT(A)-VIII, AHMEDABAD, DATED 16.06.2011 FOR THE ASSESSMENT YEAR 2002-03 . 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. THE ASSESSEE IS A COMPANY STATED TO BE ENGAGED I N THE BUSINESS OF MANUFACTURING AND JOB WORK OF FORGED BEARING INNER AND OUTER CASES. IN THIS CASE, A SURVEY U/S.133A OF THE ACT WAS CARRIED OUT ON 21.1 2.2001 AND AT THAT TIME ITA NO. 337RJT/2011 A.Y. 2002-03 (ITO VS. SAURASHTRA IRON FORGING PVT. LTD.) 2 UNACCOUNTED STOCK VALUED AT RS.10,21,302/-, BEING T HE DIFFERENCE IN THE STOCK FOUND PHYSICALLY AND THAT AS PER BOOKS OF ACCOUNT, WAS FO UND AND WAS ALSO ADMITTED AS UNACCOUNTED INCOME. THEREAFTER, ASSESSEE FILED I TS RETURN OF INCOME FOR A.Y. 2002-03 ON 22.10.2002 DECLARING TOTAL INCOME AT RS. NIL. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER, THE ASSESSMENT WAS FRAMED U/S.143(3) OF THE ACT VIDE ORDER DATED 23.03.2005 AND THE TOTAL INCOME WAS DETERMINE D AT RS.27,05,987/- BEFORE SETTING OFF OF UNABSORBED DEPRECIATION OF EARLIER Y EARS. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFO RE THE LD. CIT(A) WHO VIDE ORDER DATED 16.06.2011 GRANTED SUBSTANTIAL RELIEF T O THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFOR E US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LD. CIT(A) I, RAJKOT HAS ERRED IN LAW AND ON FACT OF THE CASE IN DELETING THE ADDITION MADE BY THE AO (A) ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT OF RS.27,85,000/-; (B) ON ACCOUNT OF EXCESS STOCK FOUND DURING THE COU RSE OF SURVEY PROCEEDINGS OF RS.10,21,302/-; AND (C) RESTRICTING THE ADDITION OF RS.1,00,000/- AS AG AINST THE ADDITION MADE BY THE AO OF RS.7,09,138/-. 4. FIRST GROUND IS WITH RESPECT TO ADDITION OF RS.2 7,85,000/- U/S. 68 OF THE ACT. 4.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A. O. NOTICED THAT ASSESSEE HAD RECEIVED UNSECURED LOAN FROM VARIOUS PARTIES INCLUD ING RS.21,35,000/- FROM M/S. KRISHNA INDUSTRIES AND RS.6,50,000/- FROM M/S. S. K . INDUSTRIES. ON PERUSING THE BALANCE SHEET OF M/S. S. K. ENGINEERS AS ON 31.03.2 002, HE NOTICED THAT M/S. S. K. ENGINEERS HAD NOT ADVANCED ANY MONEY TO THE ASSESSE E AND NO SUCH TRANSACTION WAS REFLECTED IN THE BOOKS OF M/S. S. K. ENGINEERS. TH E ASSESSEE WAS THEREFORE ASKED TO ESTABLISH THE GENUINENESS OF TRANSACTION TO WHICH A SSESSEE INTER ALIA SUBMITTED THAT ITA NO. 337RJT/2011 A.Y. 2002-03 (ITO VS. SAURASHTRA IRON FORGING PVT. LTD.) 3 THE CHEQUE RECEIVED FROM S. K. ENGINEERS WAS DEPOSI TED ON 26.03.2002 BUT WAS NOT CLEARED BEFORE 31.03.2002 AND SINCE IT WAS CLEARED ON 19.04.2002, M/S. S. K. ENGINEERS REFLECTED IT IN THE ACCOUNT IN SUBSEQUENT YEAR. WITH RESPECT TO AMOUNT OF RS.21,35,000/- RECEIVED FROM KRISHNA INDUSTRIES, A .O. CONSIDERED THE AMOUNT TO BE AS UNEXPLAINED AS THE SUBMISSIONS OF THE ASSESSEE W AS NOT FOUND ACCEPTABLE TO THE A.O. HE, THEREFORE, CONSIDERED THE AGGREGATE AMOUN T OF RS.27,85,000/- AS UNEXPLAINED AND MADE ADDITION U/S.68 OF THE ACT. AG GRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) W HO DELETED THE ADDITION BY HOLDING AS UNDER: 5.2 I HAVE PERUSED THE ASSESSMENT ORDER, FINDINGS OF THE AO AND THE WRITTEN SUBMISSION PUT FORTH BY THE LD. AR OF THE APPELLANT . THE FIRST SUB-PART OF THIS ADDITION PERTAINS TO ADDITION OF RS.21,35,000/-. THE GIST OF THE LD. AR'S SUBMISSION IN RESPECT TO THIS ADDITION MADE U/S. 68 OF THE ACT IS THAT, DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED DETAILED LEDGER ACCOUNT, CON TRA ACCOUNT, CONFIRMATION FROM THE LENDER, BANK STATEMENT IN WHICH CHEQUES HAVE BEEN D EPOSITED AND THE IDENTITY OF THE LENDER. IN FACT, THE SAME DETAILS WERE ALSO PRODUCE D BEFORE AND THE SAME HAVE BEEN VERIFIED. THE LENDER IS A FABRICATION CONTRACTOR, B ASED AT A SMALL VILLAGE IN JAFRABAD, AND DOES JOB WORK FOR L&T CO. LTD. ON PERUSAL OF THE AS SESSMENT ORDER, I FIND THAT THE PRIMARY REASON CASTING DOUBT ON THE TRANSACTION BY THE AO WAS THAT THE INQUIRY LETTER SENT BY HIM RETURNED UNSERVED. HOWEVER, FROM THE DETAILS SO FURNISHED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO MADE NO AT TEMPT TO GATHER INFORMATION. THE COMPLETE TRANSACTIONS WERE CARRIED OUT THROUGH CHEQ UE. THE IDENTITY OF THE LENDER IS ON RECORD. HE IS HAVING JOB WORK RECEIPT AND MAJORITY OF SUCH RECEIPTS ARE FROM L&T LTD. THEREFORE, THE IDENTITY OF THE LENDER, HIS CREDIT W ORTHINESS AND THE GENUINENESS OF THE TRANSACTION STANDS EXPLAINED. IN LIGHT OF THE ABOVE EVIDENCES, I FIND THAT THE LOANS ARE GENUINE AND HENCE, THE ADDITION OF RS.21,35,000/- M ADE U/S. 68 OF THE I T ACT IS DIRECTED TO BE DELETED. 5.3 SO FAR AS THE ADDITION OF RS 6,50,000/- BEI NG ALLEGED BOGUS LOAN RECEIVED FROM M/S. S K ENGINEERS IS CONCERNED, I FIND THAT, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAD PRODUCED COPY OF ACCOUNT, COPY OF CON FIRMATION, COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN, PROOF FROM BANK SHOWING CLEAR ANCE OF CHEQUE ON 19.4.2002 AND CONTRA ACCOUNT OF THE DEPOSITOR. FROM RECORDS, IT C AN BE SEEN THAT THE APPELLANT HAD RECEIVED CHEQUE NO. 555342 DATED 26.3.2002, WHICH W AS CREDITED IN HIS BOOKS ON 28.3.2002 AND SENT FOR CLEARING. THE SAME GOT CREDI TED IN THE MONTH OF APRIL (19.4.2002) AND THE SAME IS DULY REFLECTED IN THE RECONCILIATIO N STATEMENT, WHICH HAS BEEN PRODUCED BEFORE ME AND DULY VERIFIED/BY ME. HENCE, THE SAID LOAN OF RS 6,50,000/- IS NOT BOGUS AS ALLEGED BY THE AO, AND THE ADDITION IS THEREFORE DI RECTED TO BE DELETED. 5. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. ITA NO. 337RJT/2011 A.Y. 2002-03 (ITO VS. SAURASHTRA IRON FORGING PVT. LTD.) 4 5.1 BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O. LD. A.R. ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. AND LD. CIT(A) AND SUPPORTED THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT ON ACCOUNT OF AMOUNT RECEIVED FROM TWO PARTIES, NAMELY , M/S. KRISHNA INDUSTRIES AND M/S. S. K. ENGINEERS. WE FIND THAT LD. CIT(A) WHIL E DELETING THE ADDITION HAS GIVEN A FINDING THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS AND BEFORE HIM, ASSESSEE HAD FILED COMPLETE DETAILED LEDGER ACCOUNT , CONTRA ACCOUNT, CONFIRMATIONS FROM LENDERS, BANK STATEMENTS AND ESTABLISHED THE I DENTITY OF THE LENDERS. WITH RESPECT TO M/S. KRISHNA ENGINEERS, HE HAS NOTED THA T THE PRIMARY REASONS FOR DOUBTING THE TRANSACTION WAS THAT INQUIRY LETTER SE NT BY THE A.O. HAD BEEN RETURNED UNSERVED. WHILE DELETING THE ADDITION HE HAS NOTED THAT NO EFFORTS MADE BY THE A.O. TO GATHER INFORMATION FROM THE DETAILS FURNISH ED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND THAT THE TRANSACTIONS WE RE CARRIED OUT THROUGH BANK CHANNELS. HE, AFTER CONSIDERING THE DETAILED SUBMI SSION MADE BY THE ASSESSEE, HAS GIVEN A FINDING THAT ASSESSEE HAS PROVED THE IDENTI TY OF THE LENDER, HIS CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSAC TIONS AND THAT THE LOANS ARE GENUINE. WITH RESPECT TO LOAN RECEIVED FROM M/S. S . K. ENGINEERS, LD. CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THA T THE CHEQUE OF RS. 6,50,000/- WERE RECEIVED BY THE ASSESSEE ON 26.03.2002 AND GOT CREDITED IN THE MONTH OF APRIL I.E. ON 19.04.2002 AND ASSESSEE HAD REFLECTED IT IN THE RECONCILIATION STATEMENT. HE HAS FURTHER GIVEN A FINDING THAT ASSESSEE HAD PRODU CED THE COPY OF THE ACCOUNT, COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURNS, PROO F FROM BANK SHOWING CLEARANCE OF CHEQUE AND CONTRA ACCOUNT OF DEPOSITOR S AND THUS, THE ASSESSEE HAD PROVED THAT THE LOAN AMOUNT OF RS.6,50,000/- TO BE NOT A BOGUS LOAN. BEFORE US, ITA NO. 337RJT/2011 A.Y. 2002-03 (ITO VS. SAURASHTRA IRON FORGING PVT. LTD.) 5 REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO C ONTROVERT THE FINDING OF LD. CIT(A). WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). THUS, THIS GROUND OF REVENUE IS DISMISSED. 7. SECOND GROUND IS WITH RESPECT TO ADDITION ON ACC OUNT OF EXCESS STOCK OF RS.10,21,302/- U/S. 68 OF THE ACT. 7.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A. O. NOTICED THAT AT THE TIME OF SURVEY CARRIED OUT ON 21.12.2001 EXCESS STOCK OF RS .10,21,302/- WAS FOUND AND ACCEPTED AS UNACCOUNTED INCOME, BUT HOWEVER, THE SA ME WAS NOT PROPERLY ACCOUNTED AND THE CREDIT ENTRY RELATING TO UNACCOUN TED STOCK WAS NULLIFIED BY CLAIMING VARIOUS EXPENSES, SOME OF WHICH WERE EITHE R NOT PROVED OR WAS BOGUS. HE, THEREFORE, AFTER REJECTING THE BOOKS OF ACCOUNT U/S.145(3) OF THE ACT, CONSIDERED THE AMOUNT OF STOCK OF RS.10,21,302/- AS BEING NOT RECORDED IN THE BOOKS OF ACCOUNT AND MADE THIS ADDITION. 8. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF ASS ESSEE DELETED THE ADDITION BY HOLDING AS UNDER 6.2 I HAVE PERUSED THE ASSESSMENT ORDER, FINDINGS OF THE AO AND THE WRITTEN SUBMISSION PUT FORTH BY THE LD. AR OF THE APPELLANT . PERUSAL OF THE BOOKS OF ACCOUNTS REVEALS THAT THE APPELLANT HAD DULY RECORDED THE DI FFERENCE IN STOCK IN HIS BOOKS BY ENHANCING THE VALUE OF SUCH DIFFERENTIAL STOCK. HEN CE, THE DIFFERENCE IN STOCK FOUND DURING SURVEY HAS BEEN DULY TAKEN CARE OF AND OFFERED AS I NCOME. BY MAKING THE ADDITION AGAIN, HAS RESULTED INTO DOUBLE ADDITION AND HENCE, THE SA ME IS DIRECTED TO BE DELETED. 9. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 9.1 BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O. LD. A.R. ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. AND FURTHER SUBMITTED THAT NO ITA NO. 337RJT/2011 A.Y. 2002-03 (ITO VS. SAURASHTRA IRON FORGING PVT. LTD.) 6 QUANTITATIVE DIFFERENCE WAS FOUND DURING THE PHYSIC AL VERIFICATION OF STOCK AND THE DIFFERENCE WAS ONLY ON ACCOUNT OF DIFFERENCE IN VAL UATION METHODS ADOPTED BY THE A.O. AND REVENUE. HE, THUS, SUPPORTED THE ORDER OF LD. CIT(A). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION HA S GIVEN A FINDING THAT ASSESSEE HAS RECORDED THE DIFFERENCE IN STOCK IN ITS BOOKS B Y ENHANCING THE VALUE OF DEFERENTIAL STOCK AND THE AMOUNT HAS ALREADY BEEN O FFERED TO TAX. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO C ONTROVERT THE FINDING OF LD. CIT(A). WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). THUS, THIS GROUND OF REVENUE IS DISMISSED. 11. THIRD GROUND IS WITH RESPECT TO ADDITION OF RS. 1LAC. 11.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A .O. NOTICED THAT THERE WAS ABNORMAL VARIATION IN THE RATE OF GROSS PROFIT SHOW N BY THE ASSESSEE PRIOR TO THE DATE OF SURVEY AND AFTER THE DATE OF SURVEY. A.O. NOTED THAT ASSESSEE HAS NOT OFFERED ANY EXPLANATION OR REASON FOR THE VARIATION IN GROSS PR OFIT. HE, THEREFORE, REJECTED THE BOOKS OF ACCOUNTS U/S.145(3) OF THE ACT AND THEREAF TER, ON THE BASIS OF THE RATE OF GROSS PROFIT SHOWN BY THE DIFFERENT ASSESSEES, NAME LY, M/S. MICRO TECH ROLLERS PVT. LTD. (38.70%), M/S. CLASSIC FORGE P. LTD. (78.70%) AND M/S. KAMDHENU FORGE PVT. LTD. (26.40%) PROCEEDED TO ESTIMATE THE GROSS PROFI T OF THE ASSESSEE AT 24% OF THE TOTAL TURNOVER. HE, THEREAFTER, AFTER GIVING CREDI T OF GROSS PROFIT SHOWN BY THE ASSESSEE, MADE ADDITION OF THE DIFFERENCE AMOUNT OF RS.7,08,138/-. 12. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIE D THE MATTER BEFORE THE LD. CIT(A) WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE B Y HOLDING AS UNDER: ITA NO. 337RJT/2011 A.Y. 2002-03 (ITO VS. SAURASHTRA IRON FORGING PVT. LTD.) 7 7.2 I HAVE PERUSED THE ASSESSMENT ORDER, FINDINGS OF THE AO AND THE WRITTEN SUBMISSION PUT FORTH BY THE LD. AR OF THE APPELLANT. THE ASSES SING OFFICER, IN THE ASSESSMENT ORDER HAD HELD THAT THE GP WORKED OUT DURING THE COURSE O F SURVEY WAS AS HIGH AS 68%. HOWEVER, HE ALSO PROCEEDS TO HOLD THAT THE FIGURES OF PURCHASES, SALES AND GROSS PROFIT, AT THE TIME OF SURVEY WERE HIGHLY MANIPULATED. THEREFO RE, ONCE WHEN THE AO HIMSELF HOLDS THAT THE FIGURES OF PURCHASES, SALES AND GROSS PROF IT WERE NOT REAL, IT IS OBVIOUS THAT THE GP RATE OF 68% DURING THE COURSE OF SURVEY IS ALSO NOT REAL, FURTHER, THERE MAY BE MANY ENTRIES WHICH ARE YET TO BE RECORDED AND HENCE, THE TRUE AND FAIR PICTURE OF PROFIT CANNOT BE WORKED OUT ON THE DAY OF SURVEY. THEREFORE THIS FINDING IS HIGHLY HYPOTHETICAL. FURTHER, THE AO HAS RELIED UPON VARIOUS COMPARATIVE INSTANCE S WHILE ESTIMATING THE APPELLANT'S GROSS PROFIT. HOWEVER, ON PERUSAL OF SUCH COMPARISO N, IT IS SEEN THAT THE SAME IS HIGHLY VARIABLE. THE RATE OF GP OF SUCH COMPARATIVE CASES VARIES FROM 26.40% TO 78.70%. THERE CANNOT BE SUCH HUGE VARIATION AND SUCH HUGE VARIATI ON CAN NEVER BE THE BASIS OF ESTIMATING PROFIT. I ALSO FIND THAT THE APPELLANT H AD FURNISHED COMPLETE RECONCILIATION OF ALL ACCOUNTS, DURING THE COURSE OF ASSESSMENT PROCE EDINGS, IN RESPECT OF DISCREPANCY IN SALES, PURCHASES, CASH BALANCE, INCORPORATION OF CL OSING STOCK IN THE REGULAR BOOKS OF ACCOUNTS, ETC. HENCE, PROPER EFFORTS WERE MADE DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. EVEN THE ASSESSEE'S GP YEAR AFTER YEAR WAS SHOWING UPWARD TREND FROM 11.11% TO 21.40%. THEREFORE, THE BASIS OF ESTIMATIO N OF PROFIT AT 24% IS NOT JUSTIFIED. ON THE OTHER HAND, IT IS ALSO TRUE THAT THE DISCREPANC IES OF SALES, PURCHASE ETC. ARE NOT FULLY VERIFIABLE. THEREFORE IN THE INTEREST OF JUSTICE, I T WOULD BE FAIR AND REASONABLE IF THE GP ESTIMATION IS CONFIRMED BY RS.1,00,000/- AND THE RE MAINING AMOUNT OF RS 6,09,138/- IS DELETED.. THUS THE ADDITION IS PARTLY ALLOWED. 13. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE I S NOW IN APPEAL BEFORE US. 14. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O. LD. A.R. ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. AND LD. CIT(A) AND SUPPORTED THE ORDER OF LD. CIT(A). 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) AFTER CONSIDERING THE SUBMISSI ON OF THE ASSESSEE HAS NOTED THAT THE GROSS PROFIT OF VARIOUS COMPARABLES CONSIDERED BY THE A.O. VARIED FROM 26.40%, 28.7% AND SUCH HUGE VARIATION CANNOT BE CON SIDERED FOR ESTIMATING THE PROFIT. HE HAS FURTHER GIVEN A FINDING THAT ASSESS EE HAD FURNISHED RECONCILIATION OF ALL ACCOUNTS AND ASSESSEES GROSS PROFIT WAS SHOWIN G UPWARD TREND FROM 11.11% TO 21.4% AND THEREFORE IN SUCH A SITUATION, ESTIMATING THE PROFIT AT 24% WAS NOT JUSTIFIED BUT AFTER TAKING INTO CONSIDERATION, CERT AIN DISCREPANCIES IN SALES, PURCHASE ITA NO. 337RJT/2011 A.Y. 2002-03 (ITO VS. SAURASHTRA IRON FORGING PVT. LTD.) 8 ETC., WHICH WERE NOT VERIFIABLE, HE CONFIRMED THE A DDITION TO THE EXTENT OF RS.1 LAC ONLY. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATER IAL ON RECORD TO CONTROVERT THE FINDING OF LD. CIT(A). WE, THEREFORE, FIND NO REAS ON TO INTERFERE WITH THE ORDER OF LD. CIT(A). THUS, THIS GROUND OF REVENUE IS DISMIS SED. 16. IN THE RESULT, THE APPEAL OF REVENUE IS DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON 08/04/2016 SD/- SD/- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED. 08/04/2016 TRUE COPY S K SINHA 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, RAJKOT