The ITO, Ward-6(4), Ahmedabad V. Shri Vasantbhai Virjibhai Patel, Ahmedabad

ITA 859/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0534 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2009
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-10-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 23-02-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NITA SHAH
• Assessee Lawyers: G S PATEL
• Keywords: Gross profit estimation; Unexplained investment
• Section: 145

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGARWAL, A.M.) I.T.A. NO. 859/AHD./2007 ASSESSMENT YEAR : 2002-2003 INCOME TAX OFFICER, WARD-6(4), AHMEDABAD -VS.- VA SANTBHAI VIRJIBHAI PATEL, AHMEDABAD (P.A. NO. ACIPP 6355 K) (APPELLANT) (R ESPONDENT) APPELLANT BY : SMT. NITA SHAH RESPONDENT BY : SHRI G.S. PATEL O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THIS APPEAL FILED BY THE DEPARTMENT IS AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) -XII, AHMEDABAD DATED 14-11-2006 FOR THE ASSESSMENT YEAR 2002-03. 2. GROUND NO. 1 OF THIS APPEAL IS AS UNDER :- THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XI I, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN REDUCING THE ADDIT ION MADE ON ACCOUNT OF ESTIMATION OF GROSS PROFIT FROM RS.6,10,405/- TO RS .4,60,405/-. 3. THE FACTS IN BRIEF, RELATING TO CONTROVERSY INVO LVED IN AFORESAID GROUND OF APPEAL ARE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BUSIN ESS OF MANUFACTURING OF ELECTRICAL PANELS, ELECTRIC BOARDS, ELECTRIC INSTALLATIONS CONTRACT (W ITH MATERIAL) AND TRADING OF ELECTRICAL ITEMS. FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE FILE D HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2,07,229/-. 4. FOR THE YEAR UNDER APPEAL, THE ASSESSEE HAS SHOW N TURNOVER OF RS.1,00,38,746/- AND GROSS PROFIT OF RS.13,99,344/- AT 13.92% AGAINST TURNOVER OF RS.49,41,103/- AND GROSS PROFIT OF RS.9,28,398/- AT 18.79%, IN THE IMMEDIATELY PRECEDI NG YEAR. THE A.O. OBSERVED THAT THREE IS A FALL IN GROSS PROFIT OF 4.87%. THE A.O. ACCORDINGLY ASKED THE ASSESSEE TO FURNISH EXPLANATION FOR VARIATION IN GROSS PROFIT. BEFORE THE A.O., THE ASS ESSEE FILED A WRITTEN SUBMISSION. THE GIST OF THE ARGUMENT FOR FALLING IN GROSS PROFIT IS AS UNDER :- (I) SALES WAS DOUBLE, 2 (II) TURNOVER OF RS.1,00,38,746/- HAS BEEN ACHIEVED ; (III) IT IS STATED THAT MANUFACTURING AND SALES WER E HIGH IN A.Y. 2001-02 AT RS.18,60,588/- AGAINST RS.13,61,117/- IN A.Y. 2002- 03. PROFITS ARE HIGHER IN MANUFACTURING AND SALES. 5. AFTER CONSIDERING THE AFORESAID REPLY, THE A.O. ASKED THE ASSESSEE TO FURNISH MONTH-WISE DETAILS OF CONSUMPTION OF RAW MATERIAL AND PRODUCTI ON. WITH REGARD TO THIS QUERY, THE ASSESSEE VIDE LETTER DATED 22.09.2004 SUBMITTED AS UNDER :- (1) THE UNIT DOES NOT KEEP STOCK RECORD, SO IT IS N OT POSSIBLE TO FURNISH THE MONTH-WISE DETAILS OF CONSUMPTION OF RAW MATERIAL ITEM-WISE MA TERIAL QUANTITY AND AMOUNT, (2) THE UNIT DOES NOT KEEP THE STOCK REGISTER, SO I T IS NOT POSSIBLE TO FURNISH THE WORKING OF YIELD OF PRODUCTION OF SHORTAGES/ EXCESS ITEMS U SE, (3) THE UNIT DOES NOT KEEP STOCK RECORD, SO IT IS N OT POSSIBLE TO FURNISH MONTH-WISE PRODUCTION OF GOODS ITEM-WISE MATERIAL QUANTITY & A MOUNT. 6. FROM THE AFORESAID REPLY, THE A.O. CONCLUDED THA T THERE IS NO CHECK OVER CONSUMPTION OF RAW MATERIAL. THE A.O. AFTER ANALYSING THE MONTH-WI SE SALES AND PURCHASES, WORKED OUT THE CLOSING STOCK BY APPLYING THE GROSS PROFIT RATE OF 13.92% AND CONCLUDED THAT IN CERTAIN MONTHS, THE STOCK IS NEGATIVE CONTINUOUSLY IN THE MONTHS OF OCTOBER, NOVEMBER, DECEMBER AND JANUARY. THE MAXIMUM AMOUNT OF NEGATIVE STOCK IS RS.6,77,712 /-. THE STOCK AS PER BOOKS AND THE STOCK AS PER G.P. CHART ALSO VARIES TO THE TUNE OF RS.7,9 2,747/- (CLOSING STOCK AS PER G.P. CHART AT RS.2,97,085 AND CLOSING STOCK AS PER BOOK AT RS.10, 89,832/-). 7. THE A.O. ALSO ANALYSED THE PROFIT MARGIN IN CERT AIN TENDER ITEMS AND CONCLUDED THAT THE PROFIT MARGIN VARIES FROM 1.18% TO 32.37%. THE A.O. ALSO EXAMINED THE STOCK DETAILS AND STATED THAT STOCK SHOWN BY THE ASSESSEE IS NOT SUPPORTED B Y ANY BASIS AND DOCUMENTARY EVIDENCES. APART FROM THIS, THE A.O. OBSERVED THAT THE ASSESSEE MADE PURCHASES FROM ONE PARTY, NAMELY M/S. ELECTROMATIC CONTROL ON 15.03.2002 AMOUNTING TO RS. 2,70,000/-. THE ASSESSEE HAS NOT EXPLAINED 3 THE DETAILS OF PURCHASES AND ITS UTILITY. IN FACT, THE ASSESSEE HAD ADVANCED MONEY TO THE PARTY TO PURCHASE A SCOOTER AT RS.44,552/- AND THERE WAS AN OPENING BALANCE OF RS.3,72,801/- ON 01.04.2001. THE LABOUR BILLS OF SUMIT ELECTRICALS A MOUNTING TO RS.2,28,622/- ARE NOT VERIFIABLE WITH THE SPECIFIC WORK DONE. 8. ON GOING THROUGH THE PROFIT & LOSS A/C., THE A.O . NOTICED THAT THE ASSESSEE HAS DEBITED RS.2,63,000/- TOWARDS BUILDING EXPENSES. THE ASSESS EE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE STATED THAT IT HAD RECEIVED A CONTRACT FOR CONSTRUCTION OF A BUILDING AND THE SAME PERTAINS TO IT. THE EXPLANATION OF THE ASSESSEE HAS BEEN CON SIDERED. THE ASSESSEE HAS GIVEN THE CONTRACT FOR CONSTRUCTION OF THE BUILDING TO M/S. RAVAL BUIL DERS OF PORBANDAR. THE ASSESSEE HAS ALREADY DEBITED RS.4,64,175/- TOWARDS THE COST. THE ASSESSE E HAS ALSO PAID RS.4,20,000/-. THEREFORE, THE CLAIM OF EXPENSES OF RS.2,63,000/- REMAINS UNEXPLAI NED. 9. AFTER ANALYZING THE AFORESAID DEFECT/ DISCREPANC Y, THE A.O. CONCLUDED THAT THERE IS NO CHECK OVER CONSUMPTION OF RAW MATERIALS, THE CLOSIN G STOCK IS ALSO NOT RELIABLE, THEREFORE, HE REJECTED BOOK RESULTS AND ESTIMATED THE GROSS PROFI T BY INVOKING THE PROVISION OF SECTION 145 OF THE INCOME TAX ACT, 1961. THE A.O. ESTIMATED THE GR OSS PROFIT AT 20% ON A TURNOVER OF RS.1,00,38,746/- WHICH WORKS OUT TO RS.20,07,749/-. HE ACCORDINGLY MADE AN ADDITION OF RS.6,10,405/- IN DISCLOSED GROSS PROFIT OF RS.13,97 ,344/-. 10. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ACTION OF A.O. BY INVOKING THE PROVISION OF SECTION 145. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT D ETAILS OF PURCHASES AND SALES ARE AVAILABLE. THE MANNER BY WHICH THE A.O. TRIED TO FI ND OUT CLOSING STOCK AT THE END OF EVERY MONTH IS NOT CORRECT BECAUSE THE A.O. HAS NOT CONSI DERED THE RELATED EXPENSES OF LABOUR ETC., IN PURCHASES AND SALES. SO BY APPLYING ONLY STANDARD G .P. EACH MONTH, CORRECT POSITION OF CLOSING STOCK AT THE END OF EACH MONTH CANNOT BE OBTAINED. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ACCORDINGLY HELD THAT THE FINDING OF A .O. BASED ON SUCH CALCULATION OF CLOSING STOCK IS NOT JUSTIFIED. 4 11. AFTER CONSIDERING THE TOTALITY OF THE FACTS, TH E LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HELD THAT THE A.O. IS JUSTIFIED IN INV OKING THE PROVISION OF SECTION 145(1) OF THE INCOME TAX ACT BY REJECTING THE BOOKS OF ACCOUNTS O F THE ASSESSEE. WITH REGARD TO ESTIMATION OF GROSS PROFIT, THE LEARNED COMMISSIONER OF INCOME TA X(APPEALS) OBSERVED THAT A.O. HAS NOT MENTIONED ANY COMPARABLE CASE OR BASIS FOR ADOPTING GROSS PROFIT AT 20%. THEREFORE, TAKING INTO CONSIDERATION THE TOTALITY OF THE FACTS OF THE CASE S, DEFECTS MENTIONED IN THE BOOKS, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RESTRICTED THE ADDITION AT RS.1,50,000/-. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) GRANTING RELIEF OF RS.4,60,405/-, THE REVENUE IS IN APPEAL BEFORE US. 12. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF THE REVENUE SMT. NITA SHAH APPEARED AND CONTENDED THAT IN THE IMPUGNED ORDER, THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ACTION OF A.O. REGARDING INVOCATION OF P ROVISION CONTAINED IN SECTION 145(1) OF THE INCOME TAX ACT, 1961. ONCE THE BOOKS OF ACCOUNTS AR E REJECTED, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ACTION OF A.O.. HE S HOULD HAVE UPHELD THE ESTIMATION OF GROSS PROFIT BECAUSE THE ASSESSEE HIMSELF HAS DECLARED TH E GROSS PROFIT @ 18.79% IN THE IMMEDIATELY PRECEDING YEAR. IN VIEW OF THIS, ESTIMATION OF GROS S PROFIT IN THE ASSESSMENT YEAR UNDER APPEAL BY THE A.O. AT 20% IS FAIR AND REASONABLE. THEREFORE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CLEARLY ERRED IN ALLOWING RELIEF OF RS .4,60,405/-. 13. ON THE OTHER HAND, SHRI G.S. PATEL, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE TURNOVER OF THE ASSESSEE IN THE ASSESSMENT YEAR IS DOUBLE TH AN IT WAS IN THE IMMEDIATELY PRECEDING YEAR. HE FURNISHED THE TURNOVER AND GROSS PROFIT OF LAST THREE YEARS, WHICH IS AS UNDER :- 2001-2002 2000-2001 1999-2000 SALES 1,00,38,746 49,41,103 39,19,163 GROSS PROFIT 13,97,344 9,28,398 8,12,413 % OF G.P. 13.92% 18.79% 20.73% THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED T HAT GROSS PROFIT IN TRADING GOODS IS LESS AS COMPARED TO GROSS PROFIT IN MANUFACTURING. THE G.P. RATE TURNED TO BE LOWER WHEN TURNOVER HAD INCREASED, BECAUSE IN ORDER TO ACHIEVE HIGHER TURNO VER, THE ASSESSEE HAS TO SALE THE GOODS AT LOW GROSS PROFIT. THIS IS ALSO EVIDENT FROM THE FACT TH AT GROSS PROFIT IN THE ASSESSMENT YEAR 1999-2000 5 WAS 20.73%, WHICH WAS REDUCED TO 18.79% IN THE ASSE SSMENT YEAR 2000-01. IN THE ASSESSMENT YEAR 2001-02, IT WAS 13.92%. DESPITE OF THIS, IN TH E IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ADDITION TO THE E XTENT OF RS.1,50,000/-. THEREFORE, THE LD. COUNSEL OF THE ASSESSEE SUGGESTED THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 14. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ACTION OF A.O. REJECTING TH E BOOKS OF ACCOUNTS BY INVOKING PROVISIONS CONTAINED IN SECTION 145 OF THE INCOME TAX ACT, 196 1. ONCE THE BOOKS OF ACCOUNTS ARE REJECTED, THE A.O. HAS NO OPTION BUT TO ESTIMATE THE INCOME. FROM THE DETAILS OF TURNOVER AND GROSS PROFIT OF THE LAST THREE YEARS, WHICH IS STATED BY US IN P ARA 12 (SUPRA), IT CAN BE SEEN THAT SALES IN THE ASSESSMENT YEAR UNDER APPEAL ARE DOUBLE THAN IT WAS IN THE IMMEDIATELY PRECEDING ASSESSMENT YEARS. ON THIS ACCOUNT, THE POSSIBILITY OF LOW GROS S PROFIT CANNOT BE RULED OUT. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ELECTRI CAL PANELS, ELECTRIC BOARDS, ELECTRIC INSTALLATIONS CONTRACT (WITH MATERIAL) AND TRADING OF ELECTRICAL ITEMS. IN TRADING OF ELECTRICAL ITEMS , THE RATE OF GROSS PROFIT IS ALWAYS LOWER THAN GROSS PROFIT IN MANUFACTURING. THE A.O. MADE NO EFFORTS TO FIND OUT THE TURNOVER IN MANUFACTURING I TEM AND IN TRADING ITEMS. THE A.O. SIMPLY APPLIED GROSS PROFIT @ 20% AND MADE THE ADDITION OF RS.6,10,405/-. IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RESTRIC TED THE SAME TO RS.1,50,000/-. NOW ONLY QUESTION BEFORE US IS WHETHER AD HOC ADDITION TO TH E EXTENT OF RS.1,50,000/- SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS ADEQ UATE TO COVER THE VARIOUS DEFECTS AND DISCREPANCY POINTED OUT BY THE A.O. IN THE ASSESSME NT ORDER. IT IS TRUE THAT STOCK REGISTER ON REGULAR BASIS WAS NOT MAINTAINED BY THE ASSESSEE IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, CORRECT QUANTITATIVE TALLY IS NOT POSSIBLE. HOWEVER, RECORDS IN RESPECT OF THE PURCHASES AND SALES ARE AVAILABLE WE ALSO FOUND CONSIDERABLE FORCE IN THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) THAT BY APPLYING ONLY STANDARD G.P. EACH MONTH, CORRECT POSITION OF CLOSING STOCK AT THE END OF EACH MONTH CANNOT BE OBTAINED. BEFORE THE A.O., IT WAS SUBMITTED THAT MANUFACTURIN G AND SALES WERE HIGHER IN THE ASSESSMENT YEAR 2001-02 AT RS.18,60,588/- AS AGAINST RS.13,61, 117/- IN THE ASSESSMENT YEAR UNDER APPEAL AND PROFITS ARE HIGHER IN MANUFACTURING AND SALES. ONE OF THE REASONS STATED BY THE A.O. IS THAT 6 CLAIM OF EXPENSE OF RS.2,63,000/- (BUILDING EXPENSE S) REMAINS UNEXPLAINED. PRIMA FACIE IT APPEARS THAT NO EXPLANATION REGARDING THIS UNEXPLAI NED ITEM WAS SUBMITTED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THEREFORE, KEE PING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR OPINION, ADDITION TO THE EXTENT OF RS.1,50,000/- SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER IS ON LOWER SIDE. WE FEEL THAT IT WILL MEET THE END OF JUSTICE IF ADDITION OF RS.2,00,000/- IS SUSTAINED OUT OF TOTAL ADDITION O F RS.6,10,405/- MADE BY THE A.O. WE ORDER ACCORDINGLY . 15. GROUND NO. 2 IS AGAINST DELETING THE ADDITION O F RS.2,41,280/- MADE BY THE A.O. ON ACCOUNT OF UNACCOUNTED INVESTMENT. 16. IN THE IMPUGNED ORDER, THE A.O. MADE THIS ADDIT ION ON THE GROUND THAT RA BILL DATED IIIRD RA BILL, THE WORK HAS BEEN COMPLETED ON 19.09.2001. THE ITEM IS ITEM NO. 1.2. RS.6,25,000/-. SUPPLY INSTALLATION, CONNECTING AN TESTING OF 11KV 400 AMP, 750 KVA VACCUM CIRCUIT BREAKER AS PER SPECIFICATION FOR INDOOR INSTALLATION. AS P ER THE COST WORKING GIVEN BY THE ASSESSEE, THE MAIN RAW MATERIAL, INTER ALIA, INCLUDE PURCHASES MA DE FROM ALSTOM VIDE BILL NO. 22136 DATED 16.03.2002 FOR RS.2,41,280/-. THE A.O. ASKED THE AS SESSEE TO CLARIFY THE DISCREPANCY. BEFORE THE A.O., THE ASSESSEE STATED THAT MATERIAL RECEIVED FR OM M/S. ALSTON LTD. DATED 12.03.2002 WAS SUPPLIED TO GUJARAT MARITIME BOARD VIDE BILL DATED 22.03.02. AFTER CONSIDERING THE SUBMISSION, THE A.O. MENTIONED THAT THE ASSESSEE HAD EARLIER ST ATED THAT ITEM NO. 1.2 SHOWN WITH THE MATERIAL PURCHASED RA BILL DATED IIIRD RA BILL CLEARLY INDIC ATES THAT WORK OF ITEM NO. 1.2 WAS DONE ON 19.09.2001. ACCORDINGLY, THE VALUE OF THE ITEM OF 1 1 KV 400AMP. 750 VACCUM CIRCUIT BREAKER WORTH RS.2,41,280/- WAS CONSIDERED AS UNEXPLAINED, WHICH WAS ADDED BY THE A.O. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS), THE ASSESSEE SUBMITTED XEROX COPY OF BILLS NO. 20814 DAT3D 16.8.01 AND XEROX COPY OF BILL NO. 22136 DATED 16.3.2002 AND CONTENDED THAT THE A.O. HAS NOT CORRECTLY VERIFIED THE BILLS AND ARRIVED AT WRONG CONCLUSION THAT RS.2,41,280/- IS CONSIDERED AS UNEXPLAINED INVESTME NT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE, WHICH REQUIRES TO BE DELETED. 7 17. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADD ITION FOR THE DETAILED REASONS GIVEN IN PARA 4.3 ON PAGE 7, WHICH IS AS UNDER :- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, SUBMISSION MADE BY THE LD. COUNSEL AND XEROX COPY OF BILLS PRODUCED BY THE APPELLANT. ON VERIFICATION OF THE BILLS PRODUCED BY THE APPELLANT , IT IS FOUND THAT THE CLAIM OF THE APPELLANT IS CORRECT. AS IT HAS BEEN C LARIFIED FROM RECORDS, THREE IS NO ANY PURCHASE OF RS.2,41,280/- IN SEPTEM BER, 2001. THERE IS NO ANY MENTION OF WORK WORTH RS.2,41,280/- IN THE WORK SHEET. IN THE MONTH OF SEPTEMBER, 2001, IT IS A PURCHASE OF RS.24,128/- ONLY AND NOT OF RS.2,41,280/-. HENCE, THE A.O. WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.2,41,280/- CONSIDERED AS UNEXPLAINED INVESTMENT. THIS ADDITION OF RS.2,41,280/- IS, THEREFORE, DELETED. 18. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 19. AT THE TIME OF HEARING, THE LD. D.R. POINTED OU T THAT THE ADDITION WAS RIGHTLY MADE BECAUSE BEFORE THE A.O. THE ASSESSEE COULD NOT EXPL AIN THE DISCREPANCY. IF IN CASE THERE WAS PURELY A MISTAKE ON THE PART OF A.O., THE ASSESSEE COULD HAVE POINTED OUT THE SAME TO THE A.O. SINCE THIS WAS NOT DONE, THE LEARNED COMMISSIONER O F INCOME TAX(APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDITION. 20. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE SUPPORTED THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 21. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IN TH E IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER VERIFYING THE WORK SHE ETS CAME TO THE CONCLUSION THAT THERE IS NO MENTION OF WORK WORTH RS.2,41,280/- IN THE MONTH OF SEPTEMBER, 2001, THE ASSESSEE MADE THE PURCHASES OF RS.24,128/- ONLY AND NOT RS.2,41,280/- . THE POWER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS CO-TERMINUS WITH THE A.O. TH EREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) DELETING THE ADDITION OF RS.2,41,280/-. IN ANY CASE, ONCE A.O. HAS ESTIMATED THE GROSS PROF IT, NO SEPARATE ADDITION CAN BE MADE. ON THIS 8 GROUND ALSO, THE VIEW TAKEN BY THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS) IS UPHELD AND THIS GROUND OF APPEAL IS REJECTED. 22. THE LAST GROUND OF APPEAL IS AGAINST DELETING T HE DISALLOWANCE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITED IN THE BANK ACCOUNT AMOUNTING TO RS. 25,000/-. 23. WE HAVE HEARD BOTH THE PARTIES. IT IS PERTINENT TO NOTE THAT IN THE RETURN OF INCOME, THE ASSESSEE HAS DECLARED THE AGRICULTURAL INCOME OF RS .22,681/-. IN OUR OPINION, THE SAID AMOUNT IS SUFFICIENT TO COVER THE DEPOSIT OF RS.25,000/- MADE BY THE A.O. IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE HAS PRODUCED 7/12 UTARA AS EVIDENCE THAT H E OWNS AGRICULTURAL LAND DURING THE ASSESSMENT PROCEEDINGS. THE CROP OF AGRICULTURAL PR ODUCT WAS SOLD IN CASH AND CASH REALIZATION WAS DEPOSITED IN BANK ACCOUNT. THEREFORE, THE LEARN ED COMMISSIONER OF INCOME TAX(APPEALS) WAS LEGALLY AND FACTUALLY CORRECT IN DELETING THE A DDITION OF RS.25,000/-. WE DECLINE TO INTERFERE. 24. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED AS INDICATED ABOVE. THE ORDER PRONOUNCED IN THE COURT ON 06.11.2009 SD/- SD/- (D.C. AGARWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 06 / 11 / 2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT 3) CIT(A) CONCERNED; (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMED ABAD LAHA/SR.P.S.