M/S. SHAH FOILS LTD.,AHMEDABAD V. THE ITO, WARD-4(1)(3), AHMEDABAD

ITA 1852/AHD/2019

AI Insights

The case involves M/s. Shah Foils Ltd., which faced reassessment under Section 147 of the Income Tax Act, 1961, based on information from the Director General of Central Excise Intelligence (DGCEI) about unaccounted cash transactions. The Income Tax Officer (ITO) made an addition of Rs. 7,51,35,438 under Section 69A, treating these as undisclosed income. The Commissioner of Income Tax (Appeals) (CIT(A)) partly allowed the appeal by deleting a substantial portion of this addition but confirmed Rs. 45,08,126. Both the assessee and the Revenue filed cross-appeals against the CIT(A)'s decision. The Tribunal upheld the CIT(A)'s decision, agreeing that only the profit from these unaccounted sales should be taxed, not the entire sales amount.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29960 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Other Referred Cases: CIT vs. Durga Prasad More, Sumati Dayal vs. CIT, Collector of Customs vs. D. Bhoormull, President Industries vs. CIT, Panna Corporation vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A. P. SINGH
• Assessee Lawyers: K.C. THAKER
• Keywords: Business income; Reassessment proceedings; Document seized; Documents seized; Principle of natural justice; Reason to believe; Tangible material
• Section: 147; 148; 143(3); 143(1); 13; 69A

Judgement Text

" आयकर अपीलीय अिधकरण,अहमदाबाद \u0011ायपीठ “सी“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ C ” BENCH, AHMEDABAD \u0015ी टी.आर. से\u0018\u0019ल क ुमार, \u0011ाियक सद\u001b एवं \u0015ी मकरंद वसंत महादेवकर, लेखा सद\u001b क े सम!। ] ] BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER 1. आयकर अपील सं /ITA No.1852/Ahd/2019 2. आयकर अपील सं /ITA No.1922/Ahd/2019 िनधा \u0012रण वष\u0012 /Assessment Year : 2011-12 1. M/s.Shah Foils Ltd. 26, Block-B, Galaxy Signature, Science City Rd Sola, Ahmedabad-380 060 2. The ITO, Ward-4(1)(3) Ahmedabad-380 015 बनाम/ v/s. 1. The ITO, Ward-4(1)(3) Ahmedabad-380 015 2. M/s.Shah Foils Ltd. 26, Block-B, Galaxy Signature, Science City Rd Sola, Ahmedabad-380 060 \u0016थायी लेखा सं./PAN: AAICS 0490 F (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Shri K.C. Thaker, AR Revenue by : Shri A.P. Singh, CIT-DR सुनवाई की तारीख/Date of Hearing : 28/01/2025 घोषणा की तारीख /Date of Pronouncement: 31/01/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: These cross-appeals by the Assessee and the Revenue are directed against the order of the Commissioner of Income Tax (Appeals)-8, Ahmedabad [hereinafter referred to as “CIT(A)”], dated 23.10.2019, arising out of the assessment order dated 29.12.2017 passed under Section 143(3) read ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 2 with Section 147 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”], for Assessment Year (AY) 2011-12 by the Income Tax Officer, Ward 4(1)(3), Ahmedabad [hereinafter referred to as “AO”]. Since common issues are involved, both the appeals are being disposed of by this consolidated order for the sake of convenience. Facts of the Case: 2. The assessee filed its return of income on 31.08.2011, declaring a total income of Rs.6,48,57,662/-, which was processed under Section 143(1) of the Act. Subsequently, based on information received from the Director General of Central Excise Intelligence (DGCEI) regarding unaccounted cash transactions, the case was reopened under Section 147 of the Act, and an assessment order was passed making an addition of Rs.7,51,35,438/- under Section 69A of the Act, treating the alleged unaccounted cash receipts as undisclosed income. 3. The assessee filed an appeal before CIT(A) against the order of AO, who partly allowed the assessee’s appeal by deleting a substantial portion of the addition but confirmed an addition of Rs.45,08,126/-. 4. Aggrieved by the order of CIT(A), both the Assessee and the Revenue have filed cross-appeals with following respective grounds: ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 3 Grounds of Assessee’s appeal in ITA No.1852/AHD/2019 1. The learned CIT-(A) has erred in law and on facts in not quashing the proceedings u/s. 147 of the Act as invalid and in not annulling the reassessment made in pursuance of invalid proceedings u/s. 147 of the Act. 2. The learned CIT-(A) has also erred in law and on facts in not deleting the entire addition made u/s. 69A of the Act ofRs.7,51,35,438/- and in partly confirming the addition of Rs.45,08,126/-. 3. On the facts and in the circumstances of the case and in law the learned CIT (A) ought to have quashed the proceedings u/s. 147 of the act, and annulled the reassessment made and ought to have deleted the entire addition u/s. 69A of the Act of Rs.7,51,35,438/-. 4. It is therefore prayed that the proceedings u/s. 147 may be quashed, the reassessment may be annulled, and the entire addition u/s. 69A of the Act of Rs.7,51,35,438/- may be deleted. 5. Your appellant craves leave to add, amend, alter or withdraw any ground of appeal at the time of hearing. Grounds of Revenue’s appeal in ITA No.1922/AHD/2019 1. Whether the La. CIT(A) was correct in partly deleting the addition of Rs. 7,51,35,438/- U/s. 69A of the Income-Tax Act, 1961 when the assessee has failed to demonstrate that corresponding purchases were accounted for against the unaccounted sales made. Ground relating to challenging the reassessment proceedings u/s 147 of the Act: 5. Based on incriminating evidence obtained during the search, the DGCEI concluded that M/s. Shah Foils Ltd. had made unaccounted sales of Rs.7,51,35,458/- and received sale consideration in cash during the period April 2010 to 20.10.2011. A summary of observations made by the AO on the basis of a search conducted by the Director General of Central Excise ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 4 Intelligence (DGCEI) on 20.01.2011 at the factory cum office premises of M/s. Paras Bhavani Steel Pvt. Ltd. is given below : 5.1. The seized diary marked as A/8 contained entries of cash payments made by M/s. Paras Bhavani Steel Pvt. Ltd. to the assessee, Shah Foils Ltd., against clandestine procurement of SS Strips. During the investigation, responsible persons of M/s. Paras Bhavani Steel Pvt. Ltd. admitted that they had made cash payments totalling Rs. 7.51 crores to M/s. Shah Foils Pvt. Ltd. These payments were recorded in a seized diary (marked as A/8). Statement of Shri Kartikbhai Rameshbhai Shah, Director of the assessee company was recorded on 03.01.2012 by the Superintendent, DGCEI, Ahmedabad Zonal Unit, under Section 14 of the Central Excise Act, 1944. He confirmed details about Shah Foils Ltd.’s business activities, including manufacturing SS Cold Rolled Coils/Strips. Kartikbhai Shah confirmed that Shah Foils Ltd. had regular business dealings with M/s. Paras Bhavani Steel Pvt. Ltd. since 2008. Although the seized diary (A/8) showed cash payments, Kartikbhai Shah denied receiving any cash amounts from Bhavani Steel Pvt. Ltd. However, the DGCEI investigation revealed that the cash payments were linked to unaccounted sales of SS Strips. The DGCEI cross-examined records such as Panchanama dated 20.01.2011 at M/s. Paras Bhavani Steel Pvt. Ltd. premises and statements of various officials from M/s. Paras Bhavani Steel Pvt. Ltd., confirming cash payments. 5.2. A statement of Shri Jayeshbhai Anilbhai Khandhar (who was a commission agent/sales agent of M/s. Paras Bhavani Steel Pvt. Ltd., and was allegedly involved in making unaccounted cash payments to M/s. Shah Foils ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 5 Ltd. for the clandestine purchase of SS Strips) was also recorded during the DGCEI investigation on 09.03.2011. Jayeshbhai Khandhar admitted that cash payments were made by M/s. Paras Bhavani Steel Pvt. Ltd. for purchasing SS Strips without bills from M/s. Shah Foils Ltd. He confirmed the details of cash transactions recorded in the seized diary (A/8). He stated that wherever the term \"Jayeshbhai, Mumbai\" appeared in the seized diary, it referred to cash amounts given by him to the Mumbai office of Shah Foils Ltd. He also confirmed that these cash payments were made through the Mumbai office, and in some cases, they were routed through M/s. Purnima Angadia Service. His statement corroborated the depositions of other individuals, including Shri Kalubhai Jivaji Desai (Accountant of M/s. Paras Bhavani Steel Pvt. Ltd.) and Shri Parasmal Shremal Bohra (Managing Director of M/s. Paras Bhavani Steel Pvt. Ltd.). These individuals had also confirmed that cash payments were made for the clandestine procurement of SS Strips from Shah Foils Ltd. The statement was compared with entries in the seized diary (A/8), which recorded 176 transactions totalling Rs.7,51,35,438/- as cash payments to Shah Foils Ltd. Jayeshbhai Khandhar was shown these entries and acknowledged their accuracy. While Kartikbhai Rameshbhai Shah (Director of Shah Foils Ltd.) denied receiving cash, he could not provide evidence to disprove the seized diary entries or the statements of Jayeshbhai Khandhar and others. 5.3. Based on the seized documents and statements recorded by the DGCEI, the AO had reasons to believe that income to the extent of Rs.7,51,35,458/- had escaped assessment, thereby justifying reopening under Section 147 of the Act. The AO issued a notice under Section 148 of the Act on 30.03.2017, reopening the assessment based on information from DGCEI ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 6 regarding alleged unaccounted sales. The assessee, vide letter dated 07.04.2017, responded by stating that the return filed on 31.08.2011 may be treated as its return in response to the notice under Section 148. The assessee also requested the reasons for reopening, which were provided on 05.05.2017. The assessee, vide submission dated 28.08.2017, submitted details along with the sales register, purchase register, and other ledger accounts. The assessee also stated that the income equivalent to cash payments recorded in the seized diary (A/8) was wrongly treated as unaccounted sales and there was no direct evidence of unaccounted cash receipts. The assessee also stated that the company was a registered excise unit, maintaining proper stock records, sales records, and statutory books, which were duly audited by tax and excise authorities. The assessee further stated that the reassessment was based on mere third-party statements, which could not be relied upon without corroboration. 6. The AO carefully considered but did not accept the assessee statements and relied on the search proceedings conducted by DGCEI, where seized diaries (A/8) from M/s. Paras Bhavani Steel Pvt. Ltd. contained details of cash payments to Shah Foils Ltd. The AO issued a letter to the assessee on 15-12-2017 seeking evidence that sales of Rs.7,51,35,438/- has been accounted for or show cause why the same should not be added to the income of the assessee. 6.1. In response to the AO’s findings, the assessee reiterated its argument that no unaccounted sales were made, and the alleged cash payments recorded in the seized diary did not belong to it. The assessee stated that it ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 7 had recorded total sales of Rs.13,06,56,313/-, and all sales were properly accounted for in books of account. The assessee also stated that no additional sales were made beyond the accounted figures, and no cash was received outside the banking channels. The assessee again reiterated that there was no direct evidence proving unaccounted sales, and the entire addition was based on third-party documents, which were not reliable evidence. 6.2. The AO rejected the assessee’s statements and relied on corroborative evidence such as seized materials, third-party statements, and judicial precedents to justify the addition under Section 69A of the Act. 7. The CIT(A) held that the AO was justified in reopening the assessment based on information received from DGCEI and the information revealed cash transactions linked to unaccounted sales, which provided the AO with prima facie \"reason to believe\" that income had escaped assessment. The CIT(A) examined the assessee’s submissions and correspondence with the AO (letter dated 28.08.2017). It was concluded that the assessee had NOT formally objected to the reassessment proceedings but instead filed submissions on merits of the case. The CIT(A) observed that the AO had relied on multiple pieces of evidence, including seized diaries (A/8), third- party statements, and search findings of DGCEI which constituted fresh tangible material, which justified the initiation of reassessment proceedings u/s 147 of the Act. The CIT(A) also rejected the assessee’s claim of violation of natural justice, noting that the reasons for reopening were provided to the assessee on 05.05.2017 and the assessee had the opportunity to respond and filed detailed submissions on merits. Based on the above findings, CIT(A) ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 8 dismissed Grounds relating to validity of reassessment proceedings u/s 147 of the Act. 8. During the course of hearing before us, the Authorized Representative (AR) of the assessee reiterated the facts and circumstances and submitted that the validity of the proceedings be adjudicated based on independent scrutiny of the reasons as the assessee do not press the contentions taken before lower authorities. 9. The DR relied on the order of lower authorities. 10. Having considered the rival submissions and perused the material on record, we are of the view that the lower authorities have rightly concluded that the information from DGCEI—evidencing cash payments through seized diary (A/8), corroborated by multiple statements—constituted fresh tangible material. This suffices to form the requisite “reason to believe” that income had escaped assessment, thereby justifying the issuance of notice under Section 148 of the Act. The assessee has not demonstrated any procedural infirmity or shown that the AO’s belief was based on mere suspicion or conjecture. On the contrary, the facts clearly indicate that the AO acted on specific, credible information of unaccounted transactions. Further, we note that the assessee did not press earlier objections before us, focusing instead on the merits of the addition. Under these circumstances, we find no reason to interfere with the well-reasoned findings of the CIT(A) in upholding the validity of the reassessment proceedings. ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 9 11. In light of the foregoing, the ground challenging the reassessment proceedings under Section 147 stands dismissed. On the Grounds relating to addition of Rs.7,51,35,438/- u/s 69A of the Act: 12. Both the assessee and the revenue have contested the addition made under Section 69A. The assessee argues that the entire addition of Rs.7,51,35,438/- is unjustified, as it is based solely on third-party statements and seized documents from M/s. Paras Bhavani Steel Pvt. Ltd., without any direct evidence of unaccounted cash receipts. It contends that all transactions were duly recorded in audited books, as it is a registered excise unit maintaining proper stock and sales records. On the other hand, the revenue challenges the partial relief granted by CIT(A), asserting that the seized diary (A/8) and corroborative statements clearly establish unaccounted cash transactions, which the assessee failed to rebut with credible evidence. The revenue seeks restoration of the entire addition, while the assessee prays for complete deletion of the addition. 13. The AO after considering the submissions of the assessee, rejected the assessee’s contentions and upheld the addition of Rs.7,51,35,438/- under Section 69A of the Act. The AO relied on the Corroborative Evidence in the form of Seized diary (marked as A/8) recovered from M/s. Paras Bhavani Steel Pvt. Ltd. contained 176 entries of cash payments made to Shah Foils Ltd. and statements of Shri Jayeshbhai Anilbhai Khandhar (commission agent), Shri Kalubhai Jivaji Desai (authorized signatory of M/s. Paras Bhavani Steel Pvt. Ltd.), and Shri Parasmal Shremal Bohra (Managing Director of M/s. ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 10 Paras Bhavani Steel Pvt. Ltd.) confirming the cash payments for clandestine purchases of SS Strips. The AO applied the principles laid down in the case(s) of CIT vs. Durga Prasad More (82 ITR 540) (SC) and Sumati Dayal vs. CIT (214 ITR 801) (SC), emphasizing that mere denial by the assessee cannot override strong circumstantial evidence. The transaction, being in cash, had no formal documentation, which aligned with the nature of unaccounted transactions. Invoking Section 106 of the Evidence Act, and Collector of Customs vs. D. Bhoormull (1974 AIR 859), the AO held that once circumstantial evidence establishes unaccounted sales, the burden shifts to the assessee to disprove it. The AO noted that no substantive evidence was produced by the assessee to counter the findings. The AO rejected the assessee’s argument that it maintained proper excise records, citing that clandestine transactions do not pass through official records. Finally, the AO concluded that the assessee had concealed its income by engaging in unaccounted sales. 14. The CIT(A) agreed with the Assessing Officer (AO) that the assessee, prima facie, engaged in unaccounted sales. This conclusion was based on Diary A/8 seized from M/s. Paras Bhavani Steel Pvt. Ltd., recording a series of cash payments to the assessee, statements of key personnel at M/s. Paras Bhavani Steel Pvt. Ltd., who admitted to making those cash payments and assessee’s regular business relationship with M/s. Paras Bhavani Steel Pvt. Ltd., indicating that there was opportunity for such transactions. However, relying on judicial precedents, such as, President Industries (258 ITR 654) and Panna Corporation (2012) 82 CCH 0266 (Guj.), the CIT(A) held that the entire amount of unaccounted sales could not be taxed as income. Instead, ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 11 only the profit component embedded in those unaccounted sales should be brought to tax. The assessee’s declared profit rate was approximately 3%. Observing that unaccounted transactions typically involve reduced expenses, the CIT(A) deemed it reasonable to apply a higher rate of 6% to the unaccounted sales figure. Consequently, the CIT(A) restricted the addition to 6% of Rs. 7,51,35,438/-, i.e., Rs. 45,08,126/-. 15. The AR reiterated the submission made before lower authorities and stated that the AO has not carried out any independent inquiry. The AR also stated that the accounts of the assessee are not doubted by the AO. The AR placed reliance on decision of Hon’ble High Court of Delhi in case of CIT Vs. Vimal Moulders (india) Ltd. IT Appeal No. 1418 of 2009 and decision of Hon’ble High Court of Madras in case of CIT Vs. Vignesh Kumar Jewellers Tax Case (Appeal) No. 374 of 2008, where it was held that the AO must conduct an independent inquiry and bring corroborative evidence on record and mere reliance on third-party findings, without further verification, is insufficient to justify an addition under the Act. 16. In case of Revenue’s appeal on the solitary ground, the DR stated that the details of cash payments recorded in the diary and the statements recorded in the search by DGCEI have been discussed by the AO in detail. The DR further stated that the CIT(A) has erred in confirming only profit margin of 6% by giving deduction for corresponding purchases and expenses which are also unaccounted. ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 12 17. We have carefully considered the submissions of both parties, the assessment order, the order of the CIT(A), and the material placed on record. The core issue before us pertains to the addition made under Section 69A on account of alleged unaccounted sales. The Revenue has challenged the restriction of the addition to 6% of unaccounted sales, arguing that no deduction for corresponding purchases and expenses should have been allowed since the entire transaction was outside the books of account. 17.1. The assessment in this case is primarily based on evidence gathered by the DGCEI, including seized diary entries (marked A/8), third-party statements, and cash trail analysis. The AO relied on these materials, holding that the assessee engaged in clandestine transactions involving cash payments for unaccounted sales of SS Strips. The CIT(A), after a detailed examination, upheld the existence of unaccounted sales but restricted the addition to 6% of the total turnover, treating it as the embedded profit in such transactions. 17.2. It is settled law that mere third-party statements cannot form the sole basis of an addition unless corroborated by independent evidence. In the present case, the AO has relied on multiple sources of evidence, including the statements of responsible persons from M/s. Paras Bhavani Steel Pvt. Ltd., which aligned with the seized diary entries detailing cash payments to the assessee. The assessee denied receipt of cash; however, it failed to disprove the contents of the seized diary or produce any counterevidence. The AO also rightly applied Section 106 of the Indian Evidence Act, shifting the burden ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 13 onto the assessee to explain the nature and source of the cash receipts, which it failed to do. 17.3. It is a well-accepted principle that transactions conducted in cash, particularly those intended to remain outside the purview of taxation, generally lack formal documentation. The AO rightly observed that the absence of such documentation is intrinsic to unaccounted transactions and that the assessee’s argument of maintaining proper excise and stock records does not negate the possibility of clandestine sales. The absence of a transaction in official records does not imply its non-existence, especially when corroborative evidence exists in the form of seized materials and third- party admissions. 17.4. The AO’s rejection of the assessee’s contention is supported by judicial precedents where unaccounted transactions are inferred from circumstantial evidence and cash trail analysis. The acceptance of such indirect evidence, particularly in cases involving tax evasion, is consistent with the principle laid down by the Hon’ble Supreme Court in the case of Sumati Dayal vs. CIT (214 ITR 801) and Collector of Customs vs. Bhoormull (1974 AIR 859), which emphasize that the test of human probabilities must be applied in determining the nature of unexplained income. 17.5. The Revenue has contended that since the entire transaction was unaccounted, the assessee should not be given the benefit of deductions for corresponding purchases and expenses, and the entire sum should be taxed as income. However, it is a settled legal principle that only the profit element ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 14 in unaccounted turnover can be subjected to tax, not the entire sales figure. The Hon’ble Gujarat High Court in the case(s) President Industries (258 ITR 654) and Panna Corporation (2012) 82 CCH 0266 has held that when unaccounted turnover is detected, only the embedded profit is taxable. 17.6. The CIT(A) adopted a profit margin of 6% based on the assessee’s reported financials and general industry trends. However, it is noted that the CIT(A) has not examined whether the profit margin of 6% is reflective of the actual earnings from such clandestine transactions. The CIT(A) has not analyzed profit margins over multiple years nor compared them with industry benchmarks. Further, considering that the assessee was involved in such transactions as claimed by DGCEI, there exists a possibility that the corresponding purchases and expenses relating to these unaccounted sales are recorded in the books under different accounting heads, effectively reducing the actual profit margin. Had such purchases been unaccounted as well, the profit percentage would have been significantly higher. However, in the absence of any detailed verification of the industry’s actual margins and considering that the CIT(A) has relied on the financials within the accounting period under review, we find the estimation of 6% profit to be a reasonable and fair approximation of the assessee’s profit from these unaccounted sales. 17.7. We, therefore, conclude that the existence of unaccounted sales is confirmed, and the reliance on seized documents, third-party statements, and corroborative evidence is justified. The Revenue’s contention that the entire sum should be taxed as income is rejected, as only the profit embedded in ITA Nos.1852/Ahd/2019 (By Assessee) & ITA No.1922/Ahd/2019 (By Revenue) M/s.Shah Foils Ltd. vs. ITO Asst. Year : 2011-12 15 such sales is taxable. The profit margin of 6% adopted by CIT(A) is found to be reasonable, as the possibility of corresponding purchases being accounted for has not been ruled out, and no further analysis has been conducted to ascertain a higher margin. The addition under Section 69A is upheld at Rs.45,08,126/- 18. In the combined result, the assessee’s appeal is partly allowed and the Revenue’s appeal is dismissed. Order pronounced in the Open Court on 31st January, 2025 at Ahmedabad. Sd/- Sd/- (T.R. SENTHIL KUMAR) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 31/01/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की %ितिलिप अ&ेिषत/Copy of the Order forwarded to : 1. अपीलाथ' / The Appellant 2. %(थ' / The Respondent. 3. संबंिधत आयकर आयु) / Concerned CIT 4. आयकर आयु) ) अपील ( / The CIT(A)-8, Ahmedabad 5. िवभागीय %ितिनिध , अिधकरण अपीलीय आयकर , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u0012 फाईल / Guard file. आदेशानुसार/ BY ORDER, स(ािपत %ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad "