KEDAR NATH SONI, BHARATPUR V. ITO, BHARATPUR

ITA 906/JPR/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7195 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 12-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: S S GOGRA; V K GO GRA
• Keywords: Business income; Opportunity of being heard
• Section: 133A

Judgement Text

1 ITA 906(3)-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 906, 907 & 908/JP/2010 ASSTT. YEAR : 2002-03, 04-05 & 06-07. SHRI KEDAR NATH SONI, VS. THE INCOME-TAX OFFICER , PROP. M/S.CHANDRA PAL KEDAR NATH, WARD-2, BADA BAZAR, DEEG, BHARATPUR. BHARATPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.S. GOGRA & SHRI V.K. GO GRA RESPONDENT BY : SHRI D.K. MEENA ORDER DATE OF ORDER : 12/08/2011. PER R.K. GUPTA, J.M. THESE ARE THREE APPEALS BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEARS 2002-03, 2004-05 AND 2006-07. 2. COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, THEY ARE BEING DISPOSED OFF TOGETHER. 3. THE LD. COUNSEL OF THE ASSESSEE HAS FILED WRITT EN SUBMISSIONS. ON THE OTHER HAND, LD. D/R PLACED RELIANCE ON THE ORDERS OF AO AND LD. CIT (A). 4. IN THIS CASE A SURVEY WAS CONDUCTED DURING THE A SSESSMENT YEAR 2006-07 I.E. ON 29.3.2006. THEREFORE, WE WILL TAKE FIRST THE APPEA L OF THE ASSESSEE FOR ASSESSMENT YEAR 2006-07. 5. GROUND NO. 1 IS AGAINST CONFIRMING THE TRADING A DDITION OF RS. 48,896/-. 6. A SURVEY UNDER SECTION 133A WAS CONDUCTED ON 29. 3.2006 AND IT WAS FOUND THAT ASSESSEE INVOLVED IN SALES OUT OF BOOKS OF ACCOUNT. A DIARY WAS FOUND SHOWING 2 UNRECORDED SALES OF RS. 1,57,508/-. THE AO ESTIMATE D SALES AT RS. 3,70,000/- AND BY APPLYING A G.P. RATE OF 31.05% MADE AN ADDITION OF RS. 48,889/-. THE LD. CIT (A) WAS SATISFIED WITH THE ORDER OF AO, ACCORDINGLY HE CONF IRMED THE ADDITION. 7. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE ORDERS OF LOWER AUTHORITIES, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROU ND IN PART. WE NOTED THAT IN EARLIER YEAR GROSS PROFIT RATE SHOWN BY ASSESSEE WAS 27.18%. TH EREFORE, KEEPING IN MIND THE PAST HISTORY OF THE CASE, WE ARE OF THE VIEW THAT IF GRO SS PROFIT RATE OF 28% IS APPLIED ON THE RECORDED SALES FOUND DURING THE COURSE OF SURVEY TH EN IT WILL MEET THE ENDS OF JUSTICE. THE UNRECORDED SALES WERE FOUND FOR WHOLE OF THE YE AR AS SURVEY WAS CONDUCTED ON LAST DAY OF THE FINANCIAL YEAR I.E. 29.3.2006. THEREFOR E, IN OUR VIEW THERE IS NO JUSTIFICATION IN ENHANCING THE SALES FURTHER. ACCORDINGLY, WE DIREC T THE AO TO ADOPT THE SALES AS FOUND UNRECORDED IN THE LIST FOUND DURING THE COURSE OF S URVEY. WE ORDER ACCORDINGLY. THIS GROUND OF THE ASSESSEE IS ALLOWED. 8. NEXT ISSUE IS AGAINST CONFIRMING THE ADDITION OF RS. 3,30,174/- ON ACCOUNT OF EXCESS STOCK FOUND. 9. DURING THE COURSE OF SURVEY THE EXCESS STOCK WAS NOTED BY THE SURVEY PARTY AT RS. 3,30,174/-. THE STOCK AS PER BOOKS OF ACCOUNT WAS RS. 2,30,567/-. IN THIS WAY THE BENEFIT OF ADDITION OF RS. 48,889/- WAS ALLOWED BY THE AO A S MADE ON ACCOUNT OF UNRECORDED SALES. IN THIS WAY THE EXCESS STOCK CONSIDERED BY T HE DEPARTMENT WAS RS. 3,30,174/-. DURING THE ASSESSMENT PROCEEDINGS IT WAS SUBMITTED THAT THE STOCK OF RS. 2,30,567/- BELONG TO THE ASSESSEE AND STOCK OF RS. 3,60,543/- BELONG TO THE SON OF THE ASSESSEE SHRI SUNIL KUMAR ALIAS BHOLA SONI WHO OPERATES HIS BUSIN ESS ACTIVITY FROM THE SAME PREMISES. IT WAS EXPLAINED DURING THE ASSESSMENT PROCEEDINGS THAT THOUGH DURING SURVEY 3 PROCEEDINGS THIS BIFURCATION COULD NOT BE TAKEN UND ER WRONG IMPRESSION AS ASSESSEE WAS UNDER THE IMPRESSION THAT SURVEY PARTY WAS ASKING T HE EXPLANATION ABOUT THE ENTIRE STOCK FOUND. AN AFFIDAVIT WAS ALSO FILED BEFORE AO THAT T HE STOCK OF RS. 3,60,543/- RELATES TO HIS SON. HOWEVER, AO DID NOT ACCEPT THE CONTENTION AND, THEREFORE, THE ADDITION OF RS. 3,70,174/- ON ACCOUNT OF EXCESS STOCK WAS ADDED IN THE HANDS OF THE ASSESSEE. THE LD. CIT (A) HAS ALSO CONFIRMED THE ADDITION. 10. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A) AND THE WRITTEN SUBMISSIONS, WE FIND THAT ASSESSEE DESERVES TO SUCC EED IN THIS GROUND IN PART. THERE IS NO EXPLANATION IN REGARD TO DIFFERENCE IN STOCK OF RS. 18,520/-. THEREFORE, TO THIS EXTENT THE ADDITION HAS TO BE SUSTAINED. HOWEVER, REGARDING R EMAINING STOCK OF RS. 3,60,543/-, IT WAS SUBMITTED THAT THIS STOCK BELONGED TO THE SON O F THE ASSESSEE. THE BALANCE SHEET OF THE SON OF THE ASSESSEE WAS FILED BEFORE AO AS WELL AS BEFORE LD. CIT (A) AND COPY OF THE SAME IS FILED IN THE COMPILATION AND IT IS SEEN THA T TO THIS EXTENT THE STOCK HAS BEEN SHOWN IN THE HANDS OF THE SON OF THE ASSESSEE. THE SON O F THE ASSESSEE IS REGULARLY ASSESSED TO TAX. HE HAS FILED HIS SEPARATE RETURN OF INCOME FO R ASSESSMENT YEARS 2004-05 TO 07-08 AND IN THE CLOSING STOCK OF ASSESSMENT YEAR 2006-07 THE STOCK OF RS. 3,60,543/- HAS BEEN SHOWN. THEREFORE, IN OUR CONSIDERED VIEW THE AO SH OULD HAVE EXAMINED THIS ASPECT AND SHOULD NOT HAVE DRAWN ANY ADVERSE INFERENCE ONLY ON THE BASIS OF STATEMENT RECORDED DURING THE SURVEY PROCEEDINGS. STATEMENT RECORDED D URING THE SURVEY PROCEEDINGS CANNOT BE RELIED UPON SOLELY ON THE BASIS OF STATEMENT. T HERE SHOULD BE SOME CORROBORATIVE EVIDENCE ALSO. THE CORROBORATIVE EVIDENCE IS IN FA VOUR OF THE ASSESSEE BY WHICH IT HAS BEEN EXPLAINED THAT TO THIS EXTENT THE STOCK RELATE S TO THE SON OF THE ASSESSEE. THEREFORE, IN OUR VIEW THE ADDITION MADE AND SUSTAINED BY LD. CIT (A) ON ACCOUNT OF STOCK RELATING 4 TO SON OF THE ASSESSEE WAS NOT JUSTIFIED. ACCORDIN GLY THE SAME IS DELETED AND THE REMAINING DIFFERENCE IN STOCK OF RS. 18,520/- IS SU STAINED. 11. NEXT ISSUE RELATES TO CONFIRMING THE ADDITION O F RS. 53,340/- ON ACCOUNT OF EXCESS CASH FOUND AT THE TIME OF SURVEY. 12. CASH OF RS. 61,090/- WAS FOUND DURING THE COURS E OF SURVEY. CASH AS PER BOOKS OF ACCOUNT WAS RS. 7,750/-. IN THIS WAY THE EXCESS STO CK WAS OF RS. 53,340/-. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF CASH FOUND DU RING THE COURSE OF SURVEY. AN AFFIDAVIT OF SHRI HABIB MEV WAS FILED BY WHICH IT WAS STATED THAT A SUM OF RS. 50,000/- WAS GIVEN TO THE ASSESSEE AS ADVANCE. HOWEVER, THE AO WAS NO T SATISFIED WITH THE EXPLANATION. ACCORDINGLY HE MADE THE ADDITION OF RS. 53,340/-. THE LD. CIT (A) CONFIRMED THE SAME. 13. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THIS ISSUE NEEDS RE-VERIFICATION. THE AO AS W ELL AS LD. CIT (A) HAVE CATEGORICALLY MENTIONED IN THEIR ORDERS THAT SHRI HABIB MEV WAS N OT PRODUCED. THE LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE ASSESSEE IS READY TO P RODUCE SHRI HABIB MEV IF THE MATTER IS SENT BACK TO THE AO. ACCORDINGLY WE SET ASIDE THE MATTER TO THE FILE OF AO TO PASS AFRESH ORDER AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 14. NEXT ISSUE RELATES TO CONFIRMATION THE ADDITION OF RS. 46,500/- ON ACCOUNT OF PAWNING BUSINESS. 15. A LIST OF PAWNING BUSINESS WAS PREPARED DURING THE COURSE OF SURVEY AND AS PER THIS LIST, THE INVESTMENT OF RS. 46,500/- WAS ARRIV ED AT. THE EXPLANATION OF THE ASSESSEE THAT INVESTMENT IN THE PAWNING BUSINESS WAS OUT OF UNRECORDED SALES, AND THE PROFIT ON ACCOUNT OF UNRECORDED SALES WAS AVAILABLE WITH THE ASSESSEE, WHICH WAS INVESTED IN THE 5 PAWNING BUSINESS. PROFIT ON ACCOUNT OF UNRECORDED SALES HAVE ALREADY BEEN SHOWN, WAS NOT ACCEPTED BY THE AO. THE LD. CIT (A) ALSO CONFI RMED THE ACTION OF THE AO. 16. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT AN INCOME OF RS. 50,000/- HAS ALREADY BEEN SHO WN ON ACCOUNT OF UNRECORDED SALES BY THE ASSESSEE WHILE FILING THE RETURN AFTER SURVEY A ND THIS AMOUNT WAS AVAILABLE WITH THE ASSESSEE FOR DOING THE PAWNING BUSINESS. IF THE AC TION OF THE AO IS SUSTAINED THEN IT WILL TANTAMOUNT TO DOUBLE ADDITION. ACCORDINGLY WE DELE TE THIS ADDITION. 17. NEXT ISSUE RELATES TO CONFIRMING THE ADDITION O F RS. 29,353/- MADE ON ACCOUNT OF INTEREST ON PAWNING BUSINESS. 18. THE AO CALCULATED THE INTEREST YEAR-WISE AND MA DE ADDITION OF RS. 29,353/-. THERE WAS NO EVIDENCE FOUND DURING THE COURSE OF SURVEY S HOWING ANY INTEREST ON ACCOUNT OF PAWNING BUSINESS. THEREFORE, IN OUR CONSIDERED VIE W ON PRESUMPTION BASIS THE ADDITION MADE BY AO AND CONFIRMED BY LD. CIT (A) IS NOT JUST IFIED. WE HAVE ALREADY DELETED THE ADDITION ON ACCOUNT OF PAWNING BUSINESS. THEREFORE , IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DELETE THE ADDITION OF RS. 29,353 /- ALSO. 19. NEXT ISSUE RELATES TO CONFIRMING THE ADDITION O F RS. 25,342/- MADE ON ACCOUNT OF INCOME OF WIFE SMT. BIRMABATI DEVI. 20. THE AO ADDED THE INCOME OF THE WIFE OF THE ASSE SSEE IN THE HANDS OF THE ASSESSEE. ADVERSE INFERENCE WAS DRAWN BY THE AO ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SURVEY THAT SHE DOES NOT HAVE ANY INCOME, WHEREAS THE WIFE OF THE ASSESSEE IS FILING RETURN FOR THE LAST 20 YEARS AND THE DEPARTM ENT HAS ACCEPTED THE RETURN FILED BY THE WIFE OF THE ASSESSEE. THE ADDITION MADE IN THE HAN DS OF THE ASSESSEE WAS ON ACCOUNT OF INCOME OF ASSESSEES WIFE CONFIRMED BY LD. CIT (A). 6 21. AFTER CONSIDERING THE SUBMISSIONS, WE FIND THAT THIS ADDITION IS ALSO LIABLE TO BE DELETED AS WIFE OF THE ASSESSEE IS REGULARLY ASSESS ED TO INCOME-TAX FOR LAST SO MANY YEARS AND RETURN FOR THE YEAR UNDER CONSIDERATION HAS ALS O BEEN FILED BEFORE THE DEPARTMENT WHICH HAS BEEN ACCEPTED ALSO. THEREFORE, IN OUR VI EW THE ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS NOT JUSTIFIED. IT IS ALSO A MATTE R OF FACT THAT AN AFFIDAVIT WAS FILED BY THE WIFE OF THE ASSESSEE STATING THE TRUE FACT THAT SHE IS EARNING INCOME AND FILING REGULAR RETURN. ACCORDINGLY, WE DELETE THIS ADDITION ALSO. 22. NEXT ISSUE RELATES TO CONFIRMING THE ADDITION O F RS. 3,75,000/- ON ACCOUNT OF UNDISCLOSED SOURCES PAID TO SHRI GOPI RAM FOR COMPR OMISE OF LEGAL CASE. 23. AN ADDITION OF RS. 3,75,000/- HAS BEEN MADE BY THE AO ON THE BASIS OF STATEMENT OF SHRI GOPI RAM SONI WHO WAS WORKING IN THE VICINI TY OF THE ASSESSEE. STATEMENT OF SHRI GOPI RAM WAS RECORDED AND IT WAS STATED THAT A SSESSEE HAS GIVEN HIM A SUM OF RS. 3,75,000/- FOR SETTLEMENT/COMPROMISE OF THE CASE LO DGED AGAINST HIM IN THE COURT. DURING THE ASSESSMENT PROCEEDINGS, AN AFFIDAVIT OF SHRI KE DAR NATH SONI WAS ALSO FILED BY WHICH IT WAS STATED THAT THE ASSESSEE WAS NOT INVOLVED IN THE CASE IN WHICH FIR WAS FILED AGAINST ASSESSEE. THE COURT HAS ALSO NOT TAKEN ANY COGNIZ ANCE AGAINST THE ASSESSEE AS IT HAS BEEN STATED THAT THE PERSON WHO COMMITTED SUICIDE HAS CO MMITTED ON HIS OWN. THE DECEASED CUSTOMER WAS SHRI PERMANAND. HOWEVER, THE AO WAS N OT SATISFIED, THEREFORE, HE MADE THE IMPUGNED ADDITION. THE LD. CIT (A) ALSO CONFIR MED THE ACTION OF THE AO. 24. AFTER CONSIDERING THE ORDERS OF AUTHORITIES BEL OW AND WRITTEN SUBMISSIONS, WE FIND THAT THIS ADDITION HAS NO LEG TO STAND. THE ADDITI ON HAS BEEN MADE SOLELY ON THE BASIS OF STATEMENT OF A THIRD PERSON RECORDED DURING THE COU RSE OF SURVEY AND AT THE BACK OF THE ASSESSEE. INSPITE OF REPEATED REQUEST, NO OPPORTUN ITY FOR CROSS EXAMINATION WAS ALLOWED 7 TO THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CASE OF KISHINCHAND CHELLARAM, 125 ITR 713 HAS HELD THAT WITHOUT ALLOWING CROSS EXAMIN ATION TO THE ASSESSEE ANY ADDITION MADE IS NOT TENABLE/JUSTIFIED. THERE ARE VARIOUS O THER DECISIONS ALSO WHICH HAVE BEEN MENTIONED IN THE WRITTEN SUBMISSIONS. SINCE THE HO NBLE SUPREME COURT HAS HELD IN CASE OF KISHINCHAND CHELLARAM (SUPRA) AND WE HAVE TAKEN INTO CONSIDERATION THE DECISION, THEREFORE, WITHOUT GOING INTO MERIT FURTHER, WE HOL D THAT THIS ADDITION MADE AND CONFIRMED BY LOWER AUTHORITIES WAS NOT JUSTIFIED. EVEN THERE IS NOT AN IOTA OF EVIDENCE FOUND DURING THE COURSE OF SURVEY THAT ANY AMOUNT HAS BEEN GIVE N BY THE ASSESSEE TO SHRI GOPI RAM SONI FOR ANY SETTLEMENT. WITHOUT ANY CORROBORATIVE EVIDENCE AND WITHOUT ALLOWING CROSS EXAMINATION OF THE THIRD PARTY ON THE BASIS OF WHOS E STATEMENT ADDITION HAS BEEN MADE CANNOT BE SUSTAINED. ACCORDINGLY, THE SAME IS DELE TED. 25. REMAINING ISSUE IS AGAINST CONFIRMING ADDITION OF RS. 15,000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL. 26. THE ASSESSEE HAS SHOWN HOUSEHOLD WITHDRAWAL OF RS. 35,000/-. THE AO HAS ESTIMATED THE SAME AT RS. 50,000/-. THEREFORE, AN A DDITION OF RS. 15,000/- WAS MADE BY THE AO. THE LD. CIT (A) HAS CONFIRMED THE ADDITION . 27. AFTER CONSIDERING THE WRITTEN SUBMISSION, IT IS FOUND THAT THE WIFE OF THE ASSESSEE HAS SHOWN AN WITHDRAWAL OF RS. 12,000/- WHO IS ALSO ASSESSED TO TAX REGULARLY. THE AMOUNT OF RS. 12,000/- SHOULD HAVE ALSO TAKEN INTO CONSIDERATION BY THE AO WHILE ESTIMATING THE HOUSEHOLD EXPENSES. THE REMAINING AM OUNT OF RS. 3,000/- IS A PETTY AMOUNT AND WHICH IS ALSO ON THE BASIS OF ESTIMATION . THEREFORE, WE DELETE THE ENTIRE ADDITION OF RS. 15,000/-. 28. NOW WE WILL TAKE THE APPEAL FOR ASSESSMENT YEAR 2004-05. 8 29. FIRST ISSUE IS AGAINST CONFIRMING THE TRADING A DDITION OF RS. 32,189/-. 30. THE ASSESSMENT IN THIS CASE WAS REOPENED UNDER SECTION 147/148 AS DURING THE COURSE OF SURVEY ON 29.3.2006 CERTAIN UNRECORDED PU RCHASES WERE FOUND AND UNRECORDED PURCHASES RELATES TO ASSESSMENT YEAR 2004-05 AND 20 02-03. THEREFORE, ASSESSMENTS FOR THESE TWO YEARS WERE REOPENED. THEREAFTER THE AO M ADE AN ADDITION OF RS. 38,189/- BY INVOKING PROVISIONS OF SECTION 145(3) AND ESTIMATED THE TOTAL SALES OF THE ASSESSEE AT RS. 3,00,000/- WHICH INCLUDED UNRECORDED SALES OF RS. 2 ,26,053/- AND APPLIED A GROSS PROFIT RATE OF 15%. AFTER CONSIDERING THE SUBMISSIONS, TH E LD. CIT (A) FOUND THAT GROSS PROFIT RATE APPLIED AT 15% IS ON HIGHER SIDE, THEREFORE, T HE AO WAS DIRECTED TO APPLY GROSS PROFIT RATE OF 13% WHICH RESULTED IN A TRADING ADDITION OF RS. 32,189/- AGAINST TRADING ADDITION OF RS. 38,189/- MADE BY THE AO. 31. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE ORDERS OF THE AO AND LD. CIT (A), WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN T HIS GROUND IN PART. THERE IS NO DISPUTE THAT UNRECORDED SALES FOR WHOLE OF THE YEAR WERE FO UND AT RS. 2,26,053/- AND ASSESSEE HAS NO OBJECTION IN APPLYING GROSS PROFIT RATE ON THIS SALES. HOWEVER, THE ASSESSEE IS OBJECTING APPLICATION OF GROSS PROFIT RATE AT 13% A GAINST GROSS PROFIT SHOWN BY ASSESSEE AT 10.69%. SINCE ALL THE UNRECORDED PURCHASES WERE FO UND LISTED IN A DIARY, THEREFORE, THERE WAS NO QUESTION OF ESTIMATING SALES FURTHER. THERE FORE, WE DIRECT THE AO TO TAKE THE FIGURE OF UNRECORDED SALES OF RS. 2,26,053/- AGAINS T ESTIMATION OF RS. 3,00,000/- AND TAKING INTO CONSIDERATION THE GROSS PROFIT RATE SHO WN BY THE ASSESSEE AND APPLIED BY LD. CIT (A), WE ARE OF THE VIEW THAT IF A GROSS PROFIT RATE OF 12% IS APPLIED THEN IT WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE AO IS DIRECT ED TO RE-COMPUTE THE PROFIT. 9 32. GROUND NOS. 2 & 3 RELATE TO CONFIRMING THE ADDI TION OF RS. 16,000/- ON ACCOUNT OF PAWNING BUSINESS AND CONFIRMING ADDITION OF RS. 12, 294/- ON ACCOUNT OF INTEREST FROM PAWNING BUSINESS. 33. THE AO MADE ADDITION OF RS., 16,100/- ON ACCOUN T OF INVESTMENT IN PAWNING BUSINESS AND ADDITION OF RS. 12,294/- ON ACCOUNT OF ACCRUED INTEREST ON PAWNING BUSINESS. THE LD. CIT (A) HAS CONFIRMED THE SAME. 34. AFTER CONSIDERING THE SUBMISSIONS, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND. TRADING ADDITION HAS ALREADY BEEN SUS TAINED AND THAT AMOUNT WAS AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENT IN PAWNING BUSINESS, IF ANY. THE INTEREST INCOME HAS ALREADY BEEN SHOWN BY THE ASSESSEE WHILE FILING HIS RETURN . THEREFORE, IN OUR VIEW THERE WAS NO REASON TO MAKE ANY FURTHER ADDITION TH AT TOO WITHOUT ANY MATERIAL FOUND DURING THE COURSE OF SURVEY RELATING TO ACCRUAL OF INTEREST INCOME FOR THE YEAR UNDER CONSIDERATION. THIS APPEAL OF THE ASSESSEE IS ALLO WED IN PART. 35. NOW WE WILL TAKE UP THE APPEAL FOR ASSESSMENT Y EAR 2002-03. 36. FIRST ISSUE IS AGAINST CONFIRMING TRADING ADDIT ION OF RS. 97,835/-. 37. WE HAVE ALREADY DISCUSSED THE SIMILAR ISSUE IN THE APPEAL FOR ASSESSMENT YEAR 2004-05. THE AO MADE AN ADDITION OF RS. 1,13,635 B Y INVOKING PROVISIONS OF SECTION 145(3) AND ESTIMATED THE TOTAL SALES OF THE ASSESSE E AT RS. 8,10,000/- WHICH INCLUDES UNRECORDED SALES OF RS.7,31,846/- AND APPLIED A GRO SSS PROFIT RATE OF 15%. THE LD. CIT (A) REDUCED THE TRADING ADDITION TO RS. 97,855/- BY DIR ECTING TO APPLY A GROSS PROFIT RATE OF 13%. 38. SIMILAR ISSUE WAS INVOLVED IN THE ASSESSMENT YE AR 2004-05 WHEREIN WE HAVE ALREADY DIRECTED THE AO TO TAKE THE FIGURE OF UNREC ORDED SALES FOUND RECORDED IN THE DIARY 10 DURING THE COURSE OF SURVEY. THERE WAS NO REASON T O ESTIMATE THE SALES FURTHER AS ENTIRE UNRECORDED SALES WERE FOUND RECORDED IN A DIARY. WE HAVE DIRECTED TO APPLY GROSS PROFIT RATE AT 12% FOR ASSESSMENT YEAR 2004-05. THEREFORE, IN THE SAME BASIS WE DIRECT THE AO TO APPLY GROSS PROFIT RATE OF 12% ON THE UNRECORDED SALES FOUND RECORDED IN THE DIARY AND RE-COMPUTE THE TRADING ADDITION ACCORDINGLY. 39. SECOND ISSUE RELATES TO CONFIRMING THE ADDITION OF RS. 13,100/- ON ACCOUNT OF PAWNING BUSINESS AND RS. 9851/- ON ACCOUNT OF INTER EST FROM PAWNING BUSINESS. 40. SIMILAR ADDITIONS WERE MADE AND CONFIRMED FOR A SSESSMENT YEAR 2004-05. WE HAVE ALREADY DELETED THE ADDITIONS. ON THE SAME RE ASONING, WE DELETE BOTH THE ADDITIONS HERE ALSO I.E. ON ACCOUNT OF PAWNING BUSINESS AND I NTEREST FROM PAWNING BUSINESS. 41. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 42. IN SUMMARY, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED IN PART. 43. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 12 .8.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SHRI KEDAR NATH SONI, DEEG, BHARATPUR. THE ITO WARD-2, BHARATPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 906(3)/JP/2010) BY ORDER, AR ITAT JAIPUR. 11