M/s. Choksi Metal Refinery, Surat V. The DCIT- Circle-2, Surat

ITA 804/AHD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9843 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 01-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2014
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained expenditure; Income from undisclosed sources; Retraction
• Section: 69C; 143(3); 142(1); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM & SHRI MANISH BORAD, AM. ITA NO.804/AHD/2014 ASST. YEAR: 2008-09 M/S CHOKSI METAL REFINERY, ROAD NO.11, M.G. ROAD, UDHYOGNAGAR, UDHNA, SURAT. VS. DCIT, CIRCLE-2, SURAT. APPELLANT RESPONDENT PAN AABFC 7204K APPELLANT BY SHRI RASESH SHAH, AR RESPONDENT BY SHRI PRASOON KABRA, SR.DR DATE OF HEARING: 01/12/2016 DATE OF PRONOUNCEMENT: 8/12/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL BY ASSESSEE FOR ASST. YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-II, SURAT, DATED 2 6.12.3013 VIDE APPEAL NO. CAS-II/374/2010-11 ARISING OUT OF ORDER U/S 143(3) OF THE IT ACT, 1961 (IN SHORT THE ACT) FRAMED ON 31.12.201 0 BY DCIT, CIRCLE- 2, SURAT. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE ID. CIT(A) HAS ERRED IN PARTLY CONFIRMING THE A CTION OF ASSESSING OFFICER BY SUBSTITUTING A SINGLE ADDITION OF RS. 8,50,000/- AS AGAINST THE ADDITION OF RS. 9,43,200/- MADE ON ACCOUNT OF APPLYING GROSS PROFIT RATE ON ALLEGED UNACCOUNTED SALE OF RS.60,00,000/- AND ADDITION OF RS. 2,75,407 /- MADE ON ACCOUNT OF UNACCOUNTED EXPENDITURE U/S 69C OF INCOME TAX ACT 1 961. ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 2 2. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITIO NS MADE BY ASSESSING OFFICER AND PARTLY CONFIRMED BY LEARNED COMMISSIONER OF INC OME-TAX (APPEALS) MAY PLEASE BE DELETED. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF METAL R EFINING AND MELTING. RETURN OF INCOME FOR ASST. YEAR 2008-09 WA S FILED ON 30.09.2008 DECLARING TOTAL INCOME AT RS.4,37,390/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143 (2) OF THE ACT WAS ISSUED ON 27.08.2009 FOLLOWED BY NOTICE U/S 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE DULY SERVED ON ASSESSEE. NECESSA RY DETAILS WERE FURNISHED. 3. DURING THE RELEVANT FINANCIAL YEAR 2007-08 A SUR VEY U/S 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 12.02.2008. DURING THE COURSE OF SURVEY PHYSICAL VERIFICATION WAS CARRIED OUT AND VALUE OF STOCK AMOUNTING TO RS.85,3 7,970/- WAS FOUND. AFTER ALLOWING CREDIT OF RS.20,00,000/- TOWA RDS STOCK GIVEN FOR JOB WORK TOTAL PHYSICALLY VERIFIED STOCK WAS VALUED AT RS.1,05,37,970/- . DURING THE COURSE OF SURVEY A COMPUTER GENERATED SHEET SHOWING PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED ON 12. 02.2008 WAS FOUND AS PER WHICH CLOSING STOCK AS ON 12.02.2008 WAS SHO WN AT RS.1,65,06231/-. ACCORDINGLY, THE DIFFERENCE OF BOO KS STOCK AND PHYSICAL STOCK WAS CALCULATED AT RS.59,68,261/-. IN VIEW OF THIS DISCREPANCY MANAGING PARTNER OF THE FIRM MR.DIPAKBH AI J. CHOKSI ADMITTED UNACCOUNTED INCOME OF RS.60 LACS. ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 3 4. HOWEVER, ON 28.03.2008 ASSESSEE RETRACTED FROM T HE DISCLOSURE MADE DURING THE COURSE OF SURVEY BY DISP UTING THE DIFFERENCE IN STOCK ESTIMATED BY SURVEY PARTY BY SU BMITTING THAT THE ACTUAL PHYSICAL STOCK AS PER THE EXCISE RECORDS AS ON THE DATE OF SURVEY STOOD AT RS.11567906/- ONLY. WHEREAS THE CLO SING STOCK SHOWN IN THE COMPUTER GENERATED SHEET AT RS.1,65,06 ,231/- WAS MERELY A ROUGH FIGURE PUT IN BY THE ACCOUNTANT AND THEREFORE, SHORTAGE IN STOCK WAS ONLY TO THE EXTENT OF RS.1030 028/-. HOWEVER, LD. ASSESSING OFFICER WAS NOT CONVINCED AND ASSESSE D THE INCOME AFTER MAKING ADDITION BY ESTIMATING GP @ 15.72% (AS AGAINST 10.83% SHOWN BY THE ASSESSEE IN ITS AUDITED ACCOUNT S) ON UNACCOUNTED SALES OF RS.60,00,000/- WHICH WAS CALCU LATED AT RS.943200/-. 5. LD. ASSESSING OFFICER ALSO MADE AN ADDITION OF R S.2,75,407/- WITH REGARD TO UNACCOUNTED EXPENDITURE RELATED TO P AYMENT OF LABOUR AT RS.96,800/- AND PAYMENTS FOR EXPENSES BY PARTNER S OUT OF THEIR CASH WITHDRAWALS AT RS.1,78,607/- IGNORING THE SUBM ISSIONS MADE BY ASSESSEE THAT (1) THE UNEXPLAINED EXPENDITURE OF R S.2,75,407/- IS TAKEN CARE OF BY SHORTAGE OF CASH OF RS.2,50,781/- FOUND AT THE TIME OF SURVEY BY THE REVENUE AUTHORITIES AND (2) ALSO O NCE AN ADDITION IS MADE BY APPLYING GP RATE THEN NO SEPARATE ADDITION IS CALLED FOR TOWARDS UNEXPLAINED EXPENDITURE. IN ALL ASSESSEES INCOME WAS ASSESSED AT RS.16,55,997/-. ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 4 6. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CI T(A) AGAINST BOTH THE IMPUGNED ADDITION. LD. CIT(A) PARTLY ALLOW ED THE APPEAL OF ASSESSEE BY CONFIRMING THE ADDITION OF RS.8,50,000/ - AS AGAINST TOTAL ADDITION OF RS.12,18,607/- (RS.943200 + RS.2,75,407 ) BY OBSERVING AS UNDER :- 6.4 THE APPELLANT 'S CONTENTION HAS BEEN EXAMINED, FROM A PERUSAL OF THE ASSESSMENT ORDER, IT IS NOTICED THAT THE GROSS PROF IT OF THE APPELLANT - FIRM HAD REDUCED FROM 19.03 % IN THE IMMEDIATELY PRECEDING Y EAR TO 10.77 % . THE APPELLANT EXPLAINED BEFORE THE ASSESSING OFFICER FH AT THE SALES OF PRESENT ASSESSMENT YEAR INCLUDE MANUFACTURING TURN OVER OF 2.48 CRORES AND TRADING TURNOVER OF RS 2.54 CRORES AND THE COMPARISON SHOUL D HAVE BEEN MADE IN RESPECT OF MANUFACTURING TURNOVER ONLY , AS THERE W AS NO TRADING TURNOVER IN THE IMMEDIATELY PRECEDING YEAR. THE MANUFACTURING GP HA S REDUCED FROM 19.03% TO 15. 72 %. I.E. THE APPELLANT DID ACCEPT THE FACT TH AT EVEN AFTER ITS EXPLANATION , THERE HAS BEEN A FALL IN G P @ 3.31 % . THE ASSESSING OFFICER ALSO POINTED OUT THAT THERE HAS BEEN A FALL IN YIELD FROM 100.96% TO 72.71%. THE APPELLANT FURNISHED ITS EXPLANATION AT THE ASSESSMENT STAGE A ND FILED REVISED WORKING, ACCORDING TO WHICH, THERE HAS BEEN A FALL IN YIELD FROM 98.8 % TO 86.87 %. THIS MEANS THAT FALL IN YIELD OF 11. 93 % WAS ACCEPTED BY THE APPELLANT. THE REASON FOR THIS FALL IN YIELD WAS CLAIMED TO BE THE VARIAT ION IN THE QUALITY OF COPPER. THE APPELLANT ALSO SUBMITTED DURING THE ASSESSMENT PROC EEDINGS THAT HAD THE YIELD BEEN INCORRECT, THE SURVEY PARTY WOULD HAVE FOUND E XCESS STOCK AT THE TIME OF SURVEY. HOWEVER, THE REASONING OF APPELLANT IS NOT CORRECT AS THERE HAS BEEN EVIDENCE OF UNACCOUNTED SALES IN THE SEIZED / IMPOU NDED MATERIAL (SUPRA). 6.5 AS REGARDS, THE PAYMENTS OF RS. 96,8007- AND RS 1,78,607/-, TOTALING TO RS. 2,75,407/ - ON PAGE NOS 10 AND 11 OF ANNEXURE BF-21 THE APPELLA NT DID ACCEPT IN THE STATEMENT ON OATH THAT THESE WERE UNACCOUNTED P AYMENTS. UNACCOUNTED SALES, OF RS. 14,15,000/-WERE ALSO ADMITTED BY THE APPELLANT BASED ON ENTRIES IN THE SEIZED MATERIAL. THE SHORTAGE OF STOCK EVEN OFF ER CONSIDERING THE APPELLANT 'S CONTENTION IS OF 10,30,028. THE CLOSING STOCK AT TH E TIME OF SURVEY AS PER BOOKS WAS TAKEN FROM P & L ACCOUNT AS GENERATED BY THE AP PELLANT S ACCOUNTING SYSTEM AND THE APPELLANT ADMITTED THE STOCK VALUE IN THE S TATEMENT ON OATH. 6.6 IT NEEDS TO BE CLARIFIED HERE THAT COMPUTERIZED ACCOUNTING SYSTEMS AND PACKAGES HAVE REPLACED MANUAL BOOKS OF ACCOUNTS NOW AND ANY REPORT GENERATED FROM SUCH PACKAGES/ SYSTEMS IS TO BE TREA TED AS REPORT AS PER BOOKS OF ACCOUNTS. THE APPELLANT ACCEPTED THE VALUE OF ST OCK AS PER BOOKS ON THE BASIS OF THAT REPORT. IF HE HAD DENIED IT, QUANTITY WISE LIST FROM SYSTEM COULD HAVE BEEN GENERATED AT THAT TIME ONLY. RETRACTION AFTER 1 !/2 MONTHS IS APPARENTLY AN AFTER ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 5 THOUGHT AFTER MAKING ADJUSTMENTS IN THE SYSTEM. THE RELIANCE ON EXCISE RECORD IS ALSO MISPLACED AS THE EXCISE RECORDS WOULD NEVE R SHOW UNACCOUNTED SALES OR EXCESS/SHORTAGE OF STOCK. 6.7 TO SUMMARIZE, THE APPELLANT'S BOOK RESULTS ARE NOT RELIABLE IN VIEW OF THE ABOVE DISCREPANCIES NOTICED DURING THE COURSE OF SU RVEY AND LATER, DURING ASSESSMENT PROCEEDINGS INCLUDING FALL IN GP , FALL IN YIELD, UNACCOUNTED SALES, UNACCOUNTED EXPENDITURE , SHORTAGE OF STOCK AND SHO RTAGE OF CASH. THESE FACTS MAKE IT A FIT CASE FOR REJECTION OF BOOK RESULTS. 7. AS A RESULT, THIS CASE REQUIRES AN ESTIMATION OF GROSS PROFIT, SUBSTITUTING THE TWO ADDITIONS MADE IN THE ASSESSMENT ORDER. THIS WI LL BE A REASONABLE AND FAIR DECISION TAKING INTO ACCOUNT VARIOUS DISCREPANCIES FOUND AND CONTENTIONS OF THE APPELLANT/ASSESSING OFFICER. 7. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 8. LD. AR SUBMITTED THAT LD. ASSESSING OFFICER ERRE D IN CALCULATING THE DIFFERENCE BETWEEN THE PHYSICAL STOCK AND BOOKS STOCK AS ON THE DATE OF SURVEY ON 12.2.2008 AT RS.60,00,000/- AND C OMPLETELY IGNORED THE FACT THAT ASSESSEE IS REGISTERED UNDER EXCISE LAW AND REGULARLY MAINTAINING QUANTITATIVE DETAILS AS PER THE REGISTER PRESCRIBED UNDER THE EXCISE ACT. LD. ASSESSING OFFI CER ALSO IGNORED THE FACT THAT BOOKS STOCK AS ON THE DATE OF SURVEY WAS AT RS.11567906/- IN SUPPORT OF WHICH QUANTITATIVE DETA ILS ALONG WITH RATES AS APPEARING IN THE PLA REGISTER MAINTAINED. LD. AR FURTHER SUBMITTED THAT THE CLOSING STOCK AS PER BOOKS AT RS .16506231/- ADOPTED BY THE REVENUE AUTHORITIES WAS MERELY ON TH E BASIS OF COMPUTER PRINT OUT IN WHICH ONLY AN ESTIMATED FIGUR E OF CLOSING STOCK WAS PUNCHED IN BY THE ACCOUNTANT.. 8.1 AS REGARDS ADMISSION OF UNACCOUNTED INCOME OF R S.60 LACS BY THE MANAGING PARTNER OF THE FIRM LD. AR SUBMITTED T HAT AT THAT ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 6 PARTICULAR POINT OF TIME NECESSARY DETAILS WERE NOT KNOWN TO THE MANAGING PARTNER AND IN FRONT OF HIM ONLY COMPUTER GENERATED SHEET AND THE PHYSICAL STOCK DETAILS WERE AVAILABLE OUT O F WHICH SURRENDER WAS MADE. LATER ON WHEN ALL THE DETAILS WERE CHECKE D UP INCLUDING THE QUANTITATIVE DETAILS AND EXCISE RECORD IT WAS R EVEALED THAT THE BOOK STOCK WAS ONLY OF RS.11567906/- AND NOT RS.165 06231/-. LD. AR ALSO SUBMITTED THAT THERE IS NO DISPUTE WITH REG ARD TO THE VALUE OF PHYSICAL STOCK CALCULATED BY REVENUE AUTHORITIES AT RS.10537878/- AND ALSO THERE IS NO DISPUTE FOR THE APPLICATION OF GP RATE OF 15.72% APPLIED BY LD. ASSESSING OFFICER. LD. AR REQUESTED THAT ADDITION, IF ANY, TO BE MADE SHOULD HAVE BEEN CALCULATED BY APPL YING 15.72% GP RATE ON THE EXCESS STOCK OF RS.1030028/- ONLY (BOOK S STOCK OF RS.11567906 PHYSICAL STOCK OF RS.10537878). LD, A R ALSO APPRAISED ON THE BASIS OF LEGAL JURISPRUDENCE THAT THE STATEMENT OF MANAGING PARTNER DURING THE COURSE OF SURVEY U/S 13 3A OF THE ACT WAS NOT ON OATH AND IS NOT HAVING ANY EVIDENTIARY V ALUE AND, THEREFORE, THERE WAS NO FAULT ON THE PART OF ASSESS EE TO RETRACT ITS STATEMENT WHICH WAS BASED ON DOCUMENTARY EVIDENCE. 8.2 AS REGARDS IMPUGNED ADDITION OF RS.275407/- LD . AR SUBMITTED THAT THIS IMPUGNED ADDITION WAS IN RELATION TO UNEX PLAINED EXPENDITURE OF RS.96,800/- PAID TO LABOURERS AND PA YMENTS OF RS.178607/- DIRECTLY MADE BY THE PARTNERS OUT OF TH EIR CASH WITHDRAWALS. LD. ASSESSING OFFICER HAS NOT APPRECIA TED THE FACT THAT THERE WAS A CASH SHORT OF RS.250781/- WHICH COULD P OSSIBLY TAKE CARE OF UNEXPLAINED EXPENDITURE OF RS.275407/- AND FURTH ER SUBMITTED THAT ONCE ADDITION HAS BEEN MADE BY WAY OF APPLYING GP R ATE ON THE ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 7 IMPUGNED SHORTAGE OF STOCK THEN NO ADDITION IS CALL ED FOR SEPARATELY TOWARDS UNEXPLAINED EXPENDITURE. 8.3 LD. AR ALSO ASSAILED THE ORDER OF LD. CIT(A) BY SUBMITTING THAT LD. CIT(A) WAS NOT CORRECT IN CONFIRMING ADDITION O F RS.8,50,000/- BY ESTIMATING GP @ 19,03% OF THE IMMEDIATELY PRECEDIN G YEAR AND THEREBY CONFIRMING THE ADDITION OF RS.8,50,000/-. 9. LD. DR ON THE OTHER HAND SUBMITTED THAT AT THE T IME OF SURVEY ON 12.2.2008 UNACCOUNTED INCOME OF RS.60,00,000/- W AS ADMITTED BY MANAGING PARTNER OF THE ASSESSEE FIRM. ON THE BASIS OF VARIOUS DETAILS SUBMITTED BY ASSESSEE AS WELL AS RETRACTION MADE BY ASSESSEE DUE COGNIZANCE HAS ALREADY BEEN GIVEN BY L D. ASSESSING OFFICER, DUE TO WHICH RATHER THAN MAKING AN ADDITIO N OF UNEXPLAINED INCOME ADMITTED BY ASSESSEE, ASSESSED THE INCOME BY APPLYING OF GP RATE OF 15.72% ON THE DIFFERENCE OF BOOKS STOCK AND CLOSING STOCK. FURTHER THE EXCISE RECORD WHICH THE ASSESSEE HAS TA KEN AS BASIS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WERE N EVER REVEALED AT THE TIME OF SURVEY AND THE COMPUTER SHEET GENERA TED IS PART OF BOOKS OF ACCOUNT OF ASSESSEE ITSELF. THEREFORE, LD. CIT(A) HAS RIGHTLY SUSTAINED THE ADDITION OF RS.8,50,000/-. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THROUGH THIS APPEAL ASSESSEE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) SUSTAINING OVERALL ADDITION OF RS.8,50,000/- AS AGAINST TWO ADDITIONS OF RS.9,43,200/- ON ACCOUNT OF GP ESTIMAT ION ON ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 8 UNACCOUNTED SALES AND RS.2,75,407/- TOWARDS UNEXPLA INED EXPENDITURE U/S 69C OF THE ACT. 11. WE OBSERVE THAT A SURVEY WAS CONDUCTED ON THE B USINESS PREMISES OF ASSESSEE ON 12.2.2008. PHYSICAL STOCK V ALUED BY REVENUE AUTHORITIES AND NOT DISPUTED BY ASSESSEE WA S CALCULATED AT RS.105,37,878/-. BOOKS STOCK ADOPTED BY REVENUE AUT HORITIES AT RS.16506237/- WAS ON THE BASIS OF COMPUTER GENERAT ED PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED ON 12.2.2008. MAN AGING PARTNER ADMITTED UNACCOUNTED INCOME OF RS.60 LACS. STATEMEN T WAS RETRACTED ON 28.3.2008 ON THE BASIS OF THE FACT THAT THE BOOK S STOCK AS CALCULATED ON THE BASIS OF QUANTITATIVE, RATEWISE A ND VALUEWISE RECORDS MAINTAINED FOR EXCISE PURPOSES WAS AT RS.11 5,67,906/- WHICH HAVE BEEN WRONGLY TAKEN AT ESTIMATED FIGURES OF BOO KS STOCK AT RS.165,06,237/- PREPARED BY THE ACCOUNTANT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS AGREED FOR THE GP ADDITION ONLY ON THE SHORTAGE OF 10,30,028/- BEING THE DIFFE RENCE OF BOOKS STOCK OF RS.115,67,906/- AND PHYSICAL STOCK OF RS.1 05,37,878/-. HOWEVER, LD. ASSESSING OFFICER APPLIED 15.72% OF GP RATE ON THE UNACCOUNTED SALES FOR RS.60 LACS. 12. WE FURTHER OBSERVE THAT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT AND FINANCIAL STATEMENTS AND BOOKS OF AC COUNTS ARE AUDITED REGULARLY. ASSESSEE IS ALSO REGISTERED WITH THE EXCISE DEPARTMENT AND MAINTAINING NECESSARY REGISTERS EVID ENCING THE MOVEMENT OF EXCISABLE GOODS. IN THE TAX AUDIT REPOR T ALSO QUANTITATIVE RECORDS HAVE BEEN SHOWN SEPARATELY FOR RAW MATERIAL, ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 9 WORK IN PROGRESS AND FINISHED GOODS. WE FURTHER OBS ERVE THAT ALL NECESSARY QUANTITATIVE DETAILS WERE FILED BEFORE TH E ASSESSING AUTHORITY DURING THE COURSE OF ASSESSMENT PROCEEDIN GS INCLUDING EXCISE RECORDS AND NO DEFECT HAS BEEN POINTED OUT E XCEPT FOR MINOR DIFFERENCE IN THE YIELD. LD. ASSESSING OFFICER HAS ALSO NOT BEEN ABLE TO POINT OUT ANY MISTAKE IN THE EXCISE RECORD WHICH COULD NOT BE AVOIDED AND CERTAINLY CARRY A FAR BETTER EVIDENTIAR Y VALUE IN COMPARISON TO THE COMPUTER GENERATED SHEET OF THE A CCOUNTING SYSTEM IN WHICH FIGURES OF CLOSING STOCK CAN BE MA NUALLY PUTIN TO INCREASE OR DECREASE THE PROFITS. CERTAINLY THE EXC ISE RECORD AND QUANTITATIVE RECORDS ARE HAVING AN EDGE OVER THE CO MPUTER GENERATED PRINT OUT. 13. WE ARE THEREFORE, OF THE VIEW IN THE GIVEN FACT S AND CIRCUMSTANCES OF THE CASE THAT WHERE REVENUE HAS BE EN UNABLE TO POINT OUT ANY MAJOR FAULT IN THE QUANTITATIVE RECOR D MAINTAINED BY THE ASSESSEE WHICH WERE DULY PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WE AGREE WITH THE CONTENTIONS OF ASSES SEE THAT THE SHORTAGE OF STOCK IS ONLY TO THE EXTENT OF RS.10,30 ,028/- AND NOT RS.60,00,000/- ACCORDINGLY ADDITION TOWARDS GP ESTI MATION ON UNACCOUNTED SALES WILL WORK OUT TO RS.1,61,920/- BE ING 15.72% OF THE SHORTAGE FIGURE OF RS.10,30,028/-. 14. AS REGARDS ANOTHER ADDITION OF RS.2,75,407/- TO WARDS UNEXPLAINED EXPENDITURE FOR PAYMENT OF LABOUR AT RS .96,800/- AND TWO EXPENDITURE AT RS.128607/- DIRECTLY MADE BY THE PARTNERS OUT OF THEIR CASH WITHDRAWALS, WE OBSERVE THAT LD. ASSESSI NG OFFICER HAS ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 10 MADE A GENERAL REMARK FOR MAKING ADDITION AND HAS N OT GIVEN ANY COGNIZANCE TO THE FACT THAT THERE WAS A SHORTAGE IN CASH OF RS.250781/- WHICH COULD HAVE TAKEN CARE OF THE UNEX PLAINED EXPENDITURE AS SUBMITTED BY THE ASSESSEE. FURTHER W E ALSO AGREE TO THE CONTENTIONS OF ASSESSEE THAT ONCE ESTIMATION OF GP HAS BEEN MADE ON THE UNACCOUNTED SALES IT COVERS UNEXPLAINED EXPENDITURE ALSO TO THIS EXTENT. WE ARE, THEREFORE, OF THE VIEW THAT LD. ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS.2,75,407/-. 15. IN ALL IN VIEW OF OUR ABOVE DISCUSSION AND IN T HE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE RESTRICT THE ADDITION OF RS.8,50,000/- SUSTAINED BY LD. CIT(A) TO RS.1,61,920/- BEING 15.7 2% OF SHORTAGE OF STOCK OF RS.10,30,028/-. 12. OTHER GROUNDS ARE OF GENERAL NATURE, WHICH NEED NO ADJUDICATION. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH DECEMBER, 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 8/12/2016 MAHATA/- ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 11 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 ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO. 804/AHD/2014 ASST. YEAR 2008-09 12 1. DATE OF DICTATION: 7/12/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 7/12/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: