Shri Harihar D. Nima, Ahmedabad v. The Income Tax Officer Ward-2(1), Ahmedabad

ITA 107/AHD/2004 | 1998-1999
Pronouncement Date: 12-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 10720514 RSA 2004
Assessee PAN AATPN1927C
Bench Ahmedabad
Appeal Number ITA 107/AHD/2004
Duration Of Justice 6 year(s) 2 month(s)
Appellant Shri Harihar D. Nima, Ahmedabad
Respondent The Income Tax Officer Ward-2(1), Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 12-03-2010
Date Of Final Hearing 09-03-2010
Next Hearing Date 09-03-2010
Assessment Year 1998-1999
Appeal Filed On 12-01-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. N. PAHUJA AM) ITA NOS.107 AND 108/AHD/2004 A. Y.: 1998-99 AND 1999-2000 SHRI HARIHAR D. NIMA 502 SHAILRAJ TOWER NEAR MANAGEMENT ENCLAVE VASTRAPUR AHMEDABAD-9 PA NO.AATPN 1927C VS THE INCOME TAX OFFICER WARD-2(1) AHMEDABAD (APPELLANT) (RESPONDENT) ITA NO.432/AHD/2004 A.Y.: 1999-2000 THE INCOME TAX OFFICER WARD-2(1) AHMEDABAD VS SHRI HARIHAR D. NIMA 502 SHAILRAJ TOWER NEAR MANAGEMENT ENCLAVE VASTRAPUR AHMEDABAD-9 PA NO.AATPN 1927C (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI T. P. HEMANI AR DEPARTMENT BY SHRI GOVIND SINGHAL DR O R D E R PER BHAVNESH SAINI: ALL THE ABOVE APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST DIFFERENT ORDE RS OF THE CIT(A)-VI AHMEDABAD DATED 08-12-2006 FOR ASSESSMENT YEARS 1998-99 AND 1999-2000. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL AVAILABLE ON RECORD. ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 2 ITA NO.107/AHD/2004 (ASSESSEES APPEAL) 3. ON GROUND NO.1 THE ASSESSEE CHALLENGED THE ADDI TION OF RS.14 00 913/- ON ACCOUNT OF ESTIMATE OF SALES AND GROSS PROFIT RATE. BRIEFLY THE FACTS OF THE CASE ARE THAT SURVEY U/S 133A OF THE IT ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 17 TH MARCH 1999. PHYSICAL STOCK WORTH OF RS.23 51 352/- AND CASH OF RS.55 800/- WERE REPORTED TO BE FOUND. THE BOOKS OF ACCOUNTS WERE IM POUNDED. STATEMENT OF THE ASSESSEE WAS RECORDED. STATEMENT O F SHRI BABULAL PARTNER OF M/S. MINERWA STONE & GRANITES SHRI INDR AVADAN DAVE EMPLOYEE SHRI V. RAMESHBHAI PANDYA EMPLOYEE WAS AL SO RECORDED. THE ASSESSEE IS HAVING SISTER CONCERN NAMELY M/S. MINER WA GRANITE AND STONE WHEREIN HIS WIFE SMT. ANITA H. NIMA AND HIS B ROTHER SHRI PRANJIVAN D. NIMA ARE PARTNERS. THE ASSESSEE IS TRA DING IN THE BUSINESS OF MARBLE KOTA STONE AND TILES AND ALSO SUPPLYING THE MATERIALS AFTER SIZING ACCORDING TO NEED OF THE PURCHASES. DURING T HE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE HAS SHOWN GROSS PR OFIT OF RS.18 71 137/- @13.36% ON TOTAL SALES OF RS.1 40 04 760/-. THE AO NOTED THAT THE ASSESSEE WAS CONCEALING INCOME FROM MARBLE BUSINESS BY USING THE FOLLOWING MEANS:- (I) SALES ARE SHOWN AT LOWER AMOUNT THAN THE ACTUAL BILL AMOUNT (II) ASSESSEE ISSUING TWO BILLS OF THE SAME NUMBER AND R ECORDING ONLY ONE BILL IN THE BOOKS OF ACCOUNT AND NOT RECOR DING THE OTHER BILL AND (III) THE EXPENDITURE IS NOT RECORDED IN THE BOOKS OF ACCOUNT. THE AO IN PARA 5 OF THE ASSESSMENT ORDER NOTED THE GIST OF SALES NOT FULLY RECORDED BY THE ASSESSEE AND SOME OF THE SALE BILLS WERE ACCOUNTED AT LOWER AMOUNT THAN THE ACTUAL SALE AMOUNT. THE SEIZE D PAPER ANNEXURE A-36 SHOWS THAT THE ASSESSEE HAD NOT ACCOUNTED FOR EXPENDITURE OF ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 3 EXHIBITION OF RS.26 633/-. STOCK STATEMENT AS ON 31 ST MARCH 1998 FURNISHED WITH BANK OF INDIA SHOWS THE STOCK OF RS. 39 92 109/- AND THE CLOSING STOCK DISCLOSED IN THE BOOKS OF ACCOUNT OF M/S. MINERWA MARBLE SHOWS RS.37 32 884/-. THUS THERE WAS DISCREPANCY I N THE CLOSING STOCK OF RS.2 59 275/- WHICH WOULD SHOW THAT THE ASSESSEE HAS NOT DISCLOSED FULL SALES. THE STATEMENT OF THE ASSESSEE WAS ALSO RECORDED IN WHICH HE HAS ADMITTED THAT SALES ARE MADE OF THE PRODUCTS AN D PAYMENTS ARE RECEIVED THROUGH CHEQUES AND SOME PAYMENTS ARE ALSO RECEIVED IN CASH. THE AO THEREFORE INFERRED THAT THE ASSESSEE HAS M ADE 10% ON THE CASH SALES WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUN T. TENTATIVE TRADING ACCOUNT WAS RECASTED SHOWING 10% CASH SALES ON THE BASIS OF ESTIMATE MADE AS PER THE PURCHASES. THE AO ACCORDINGLY REJEC TED THE BOOKS RESULTS U/S 145 OF THE IT ACT AND ESTIMATED THE SAL ES AT RS.1 55 00 000/- AND APPLIED GROSS PROFIT RATE OF 21.11% AND MADE AD DITION OF RS.14 00 913/-. 4. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED C IT(A) AND IT WAS SUBMITTED THAT THE ASSESSEE MADE PURCHASES WHICH AR E MAINLY FROM OUTSIDE GUJARAT. RAW MARBLE ROCKS ETC. ARE PURCHAS ED AND CUT INTO SPECIFIC SIZE AS PER THE REQUIREMENT OF THE CUSTOME RS. THE ASSESSEE EXPLAINED THE DISCREPANCIES POINTED OUT BY THE SURV EY OFFICIALS BUT THE AO DID NOT CONSIDER IT PROPERLY AND REJECTED THE BO OK RESULTS. NO DEFECT HAS BEEN FOUND IN THE BOOKS OF ACCOUNT. THERE WAS N O BASIS TO ARRIVE AT THE CONCLUSION THAT THE ASSESSEE WAS MAKING CASH SA LES TO THE EXTENT OF 10% WHICH WERE NOT RECORDED IN THE BOOKS. AS REGARD S THE DIFFERENCE IN THE AMOUNT MENTIONED IN THE SALE BILL AND THE ACCOU NT OF COLLECTION SHOWN AGAINST SUCH SALE BILLS IT WAS EXPLAINED THA T IT WAS DUE TO THE REASON THAT THE CUSTOMERS AT THE TIME OF MAKING PAY MENT USED TO BARGAIN FOR SOME CONCESSION AND NORMALLY THE AMOUNT WAS PAID BY THEM IN ROUND FIGURE WHICH WAS OBVIOUSLY LESS THAN THE A MOUNT MENTIONED IN THE SALE BILLS. IT WAS ACCORDINGLY SUBMITTED THAT T HE ADDITION MAY BE ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 4 DELETED. THE LEARNED CIT(A) ON CONSIDERING SUBMISSI ON OF THE ASSESSEE CONFIRMED THE ADDITION AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. HIS FINDINGS ARE REPRODUCED AS UNDER: 3.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARN ED COUNSEL AND I HAVE ALSO PERUSED THE MATERIAL ON REC ORD. I HAVE ALSO GONE THROUGH THE REPLY OF THE APPELLANT SUBMIT TED BY HIM BEFORE THE ASSESSING OFFICER VIDE HIS LETTER DTD. 2 2.5.2001 ALONG WITH ENCLOSURES THERETO. I HAVE ALSO GONE THR OUGH THE VARIOUS DETAILS FURNISHED BY THE APPELLANT BEFORE T HE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCE EDINGS. FROM A PERUSAL OF THE MATERIAL ON RECORD IT CLEARL Y EMERGES THAT THE APPELLANT HAS NOT MAINTAINED DAY-TO-DAY ST OCK REGISTER AND QUANTITATIVE DETAILS AND THEREFORE T HE TRADING RESULTS SHOWN CANNOT BE TAKEN AS VERIFIABLE. THE ST OCK FOUND AT THE TIME OF SURVEY WAS MUCH LESS THAN THE STOCK WORKED OUT AS PER BOOKS MEANING THEREBY THAT THE APPELLANT WAS MAKING SALES OUTSIDE BOOKS ALSO. THE APPELLANT HAS ALSO NOT BEEN ABLE TO EXPLAIN SATISFACTORILY THE DIFFERENCE IN THE AMOUNT AS MENTIONED IN THE SALE BILL AND THE AMOUNT SHOWN AS COLLECTED AGAINST THAT SALE BILL. THE ARGUMENT OF T HE APPELLANT THAT THE DIFFERENCE IN THESE TWO AMOUNTS AROSE ON A CCOUNT OF THE FACT THAT THE CUSTOMERS AT THE TIME OF SETTLEME NT OF BILL USED TO MAKE PAYMENT OF LESS AMOUNT THAN THAT SHOWN IN THE BILL IS ALSO NOT CORRECT BECAUSE IN MOST OF THE CAS ES THE AMOUNT SHOWN AS COLLECTED IS MORE THAN THE AMOUNT MENTIONE D IN THE SALE BILL. THE APPELLANT ALSO COULD NOT EXPLAIN THE DISCREPANCY AS TO WHY THE SALE BILLS OF SAME NUMBER WERE ISSUED TO TWO OR MORE CUSTOMERS INDICATING THEREIN DIFFERENT QUANTIT IES AND DIFFERENT AMOUNTS. NO EXPLANATION WAS FURNISHED AS REGARDS DIFFERENCE IN THE STOCK AS SHOWN IN THE STATEMENT S UBMITTED TO THE BANK AND THE STOCK REFLECTED IN THE BOOKS AS ON 31.3.1998. FROM THE ABOVE FACTS IT IS CLEAR THAT THE BOOKS MA INTAINED BY THE APPELLANT DID NOT REFLECT THE TRUE STAT OF AFFA IRS OF THE APPELLANTS BUSINESS. IN THE CIRCUMSTANCES THE AS SESSING OFFICER WAS JUSTIFIED IN REJECTING THE BOOKS OF ACC OUNT AND IN APPLYING THE PROVISIONS OF SECTION 145(3) TO DETERM INE THE PROFITS OF THE APPELLANTS BUSINESS AND HIS FINDING S IN THIS REGARD ARE UPHELD. THE ESTIMATION OF SALES AT RS.1 55 00 000/- AS AGAINST THE SALES SHOWN AT RS.1 40 04 760/- IS ALSO REASONABLE LOOKING TO THE FACT THAT FULL SALE AMOUNT WAS NOT RECORDED IN THE BOOKS. IN THE APPELLANTS LINE OF BUSINESS THE MARGIN OF PROFIT AS DISCLOSED BY MARBLE DEALERS IN KISANGARH IN RAJASTHAN NORMAL LY ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 5 RANGES FROM 30% TO 40%. SINCE THE APPELLANT HAS TO PURCHASE RAW MARBLE ROCKS FROM RAJASTHAN AND THE TRANSPORTAT ION COST BORNE BY HIM IS HIGHER AS COMPARED TO THE DEALERS I N KISANGARH THE MARGIN OF PROFIT IN HIS CASE SHOULD NOT HAVE BEEN LESS THAN 25% TO 30%. THE ASSESSING OFFICER HA S APPLIED THE GROSS PROFIT RATE AT 21.11% ONLY WHICH CANNOT B E CONSIDERED AS EXCESSIVE OR UNREASONABLE. IN THE CIRCUMSTANCES THE ESTIMATION OF SALES AT RS.1 55 0 0 000/- AND APPLICATION OF GROSS PROFIT RATE AT 21.11% ARE UPHELD. ACCORDINGLY THE ADDITION OF RS.14 00 913/- MADE IN THE TRADING RESULT ON ACCOUNT OF LOW GROSS PROFIT IS CO NFIRMED. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRING TO P ARA 5.2 OF THE ASSESSMENT ORDER SUBMITTED THAT BILL OF DATED 15-10 -1998 FALL IN THE NEXT ASSESSMENT YEAR AND WITH REGARD TO OTHER GILLS HE H AS REFERRED TO THE REPLY FILED BEFORE THE AUTHORITIES BELOW PB -48 IN WHICH IT WAS ALSO EXPLAINED THAT SALE INVOICE TO ABHISHEK ENGINEERING WAS CANCELLED AND IT WAS NOT ACCOUNTED FOR. THE SALE TO JMC PROJECT LTD. WAS PROPERLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. HIGHER VALUE OF THE SALES HAS BEEN SHOWN FOR BILL NO.237. FOR BILL NO.346 IT WAS EXPL AINED THAT SINCE THE ASSESSEE RECEIVED RS.5 000/- ONLY. THEREFORE DIFFE RENCE WAS OF RS.1 793/- WHICH WAS NOT RECEIVED BY THE ASSESSEE. THEREFORE CONCLUSION OF THE AO IS INCORRECT THAT ACTUAL SALE AMOUNT IS NOT RECORDED IN THE BOOKS OF ACCOUNT. HE HAS SUBMITTED THAT THER E WAS NO STOCK DIFFERENCE IN THE QUANTITY BUT IT WAS DIFFERENCE ON ACCOUNT OF STOCK STATEMENT FURNISHED TO THE BANK AND THE STOCK MENTI ONED IN THE BOOKS OF ACCOUNT WHICH WAS THE PRACTICE TO INFLATE THE STOCK IN ORDER TO GET MORE FINANCE FROM THE BANK. IN SUPPORT OF HIS SUBMISSION HE HAS REFERRED TO PB -23 TO SHOW THAT THERE WAS NO DISCREPANCY IN THE STOCK IN QUANTITY BUT IT WAS DISPUTE OF VALUATION ONLY. HE HAS SUBMIT TED THAT NO REASONS ARE GIVEN TO REJECT THE BOOK RESULTS AND THAT IN TH E STATEMENT OF THE ASSESSEE CASH PAYMENT OF THE SALES WAS ACCEPTED BUT IN FACT NO SALES HAVE BEEN MADE IN CASH OUTSIDE THE BOOKS OF ACCOUNT . HE HAS SUBMITTED THAT THE AO RECASTED THE TRADING ACCOUNT BY TAKING 10% AS CASH SALES ON THE BASIS OF PURCHASES MADE AND SIMILARLY SALES HAV E BEEN ENHANCED. AS ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 6 REGARDS EXPENSES OF RS.26 633/- INCURRED ON EXHIBIT ION IT WAS SUBMITTED THAT THE AMOUNT WAS SPENT BY THE PRINCIPAL FOR EXHI BITION AND SINCE NO AMOUNT WAS INCURRED BY THE ASSESSEE ADDITION IS UN JUSTIFIED AS WELL AS FOR THE PURPOSE OF REJECTING T HE BOOK RESULTS. THE LEARNED COUNSEL FOR THE ASSESSEE THEREFORE SUBMITTED THAT METHOD OF THE E STIMATE IS ERRONEOUS. HE HAS RELIED UPON THE DECISION OF THE HONBLE BOMB AY HIGH COURT IN THE CASE OF R. B. ABIRCHAND SPINNING AND WEAVING MILLS VS CIT 75 ITR 260 (BOM.) IN WHICH IT WAS HELD THAT AOS RIGHT FOR REJ ECTION OF THE BOOK RESULT ARISES ONLY AFTER HIS FINDING IS RECORDED AS TO THE UNACCEPTABILITY OF THE METHOD AND IRREGULARITIES OF THE ACCOUNTS KEPT. HE HAS ALSO RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT VS PADAMCHAND RAMGOPAL 76 ITR 719 (SC) IN WHICH IT WAS HELD THAT ON THE FACTS THAT THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDI NG THAT THE ADDITIONS MADE BY THE INCOME-TAX OFFICER WERE IN ACCORDANCE W ITH LAW. THE ADDITIONS WERE ARBITRARILY MADE. THE TWO MISTAKES W ERE INSIGNIFICANT AND THEY AFFORDED NO BASIS FOR REJECTING THE ACCOUNTS F OR THE SUBSEQUENT YEARS. FURTHER THE METHOD ADOPTED FOR DETERMINING THE ESCAPED INCOME WAS HIGHLY CAPRICIOUS. 5. ON THE OTHER HAND THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SURVEY WHICH WAS CONFRON TED TO THE ASSESSEE BUT THE ASSESSEE COULD NOT EXPLAIN THE SAME. PART O F THE SALES IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. DUPLICATE BILLS WERE ISSUED BY THE ASSESSEE FOR SALES. THE ASSESSEE ADMITTED LARGE SCA LE UNACCOUNTED SALES NOT RECORDED IN THE BOOKS OF ACCOUNTS AND ALSO ADMI TTED CASH SALES MADE BY THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNT. THE A SSESSEE HAS NOT PRODUCED ANY EVIDENCE FOR CANCELLATION OF THE SALE BILLS. THE ASSESSEE HAS ALSO NOT PRODUCED ANY EVIDENCE THAT NO AMOUNT WAS I NCURRED ON EXHIBITION. THE LEARNED DR SUBMITTED THAT EXPENSES ARE NOT PROPERLY RECORDED IN THE BOOKS OF ACCOUNT. THEREFORE AUTHOR ITIES BELOW WERE ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 7 JUSTIFIED IN ESTIMATING BOOK RESULTS DECLARED BY TH E ASSESSEE. THE LEARNED DR RELIED UPON THE DECISION OF THE HONBLE BOMBAY H IGH COURT IN THE CASE OF NATIONAL PLASTICS INDUSTRIES VS ITO 309 ITR 191 (BOM.) IN WHICH IT WAS HELD DISMISSING THE APPEAL THAT ONCE THE AUTHORITIES HA D COME TO THE CONCLUSION THAT THE BOOKS OF ACCOUNT WERE NOT P ROPERLY MAINTAINED AND SUFFERED FROM DEFICIENCIES THE ASSESSING OFFICER W AS JUSTIFIED IN COMPUTING INCOME ON A REASONABLE BASIS IN AN APPROPRIATE MANN ER. THE ASSESSING OFFICER BESIDES NOTICING THE DEFICIENCIES IN THE BO OKS F ACCOUNT HAD ALSO FORMED AN OPINION THAT THERE WERE INSTANCES OF LEAK AGE OF REVENUE IN THE BOOKS OF ACCOUNT AND THE METHOD OF ACCOUNTING APPLI ED WAS NOT PROPER . 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON AVAILABLE ON RECORD. DURING THE COURSE OF SURVEY PH YSICAL STOCK DID NOT FOUND TALLY WITH THE STOCK RECORDED IN THE BOOKS OF ACCOUNT. THE SURVEY PARTY NOTICED THAT THE ASSESSEE WAS ISSUING TWO BIL LS OF THE SAME NUMBER AND RECORDED ONLY ONE BILL IN THE BOOKS OF ACCOUNT AND NOT RECORDED THE OTHER BILL. THIS FACT IS NOT DISPUTED BY THE ASSESS EE AND THIS FACT ALSO FINDS MENTIONED IN THE ORDER DATED 18 TH MARCH 1999 IMPOUNDING THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY. TWO SE TS OF SALE BILLS WERE FOUND AND SEIZED ALONG WITH SEVERAL LOOSE PAPERS TO SHOW THAT THE BOOK RESULT OF THE ASSESSEE WAS NOT RELIABLE. THOUGH THE LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDED THAT THE BILL DATED 15 TH OCTOBER 1998 PERTAINS TO THE NEXT ASSESSMENT YEAR BUT NO EVIDENC E OF CANCELLATION OF THE BILL IN THE NAME OF ABHISHEK ENGINEERING WAS PR ODUCED BEFORE THE AUTHORITIES BELOW. SIMILARLY FOR BILL NO.346 IN TH E NAME OF M/S. M. S. KHURANA THE AO NOTED THAT SALE BILLS WERE ACCOUNTE D AT LOWER AMOUNT THAN THE ACTUAL SALE AMOUNT BECAUSE IN THIS CASE R S.5 000/- WAS RECORDED IN THE BOOKS OF ACCOUNT AS AGAINST SALE BI LL OF RS.6 793/-. THERE WAS A DIFFERENCE OF RS.1 793/-. ACCORDING TO THE LE ARNED COUNSEL FOR THE ASSESSEE ENTIRE AMOUNT OF SALE PROCEEDS WAS NOT REC OVERED FROM THE PARTY. THEREFORE WHATEVER AMOUNT WAS RECOVERED WAS MENTIONED IN THE ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 8 BOOKS OF ACCOUNT BY THE ASSESSEE. THE AO HAS HOWEVE R MENTIONED IN THE ASSESSMENT ORDER THE AMOUNT OF RS.6 793/- ON THE BA SIS OF ACTUAL BILL AS PER THE COLLECTION DOCUMENT. THE LEARNED COUNSEL FO R THE ASSESSEE DURING THE COURSE OF ARGUMENTS ADMITTED THAT THE AM OUNT OF BILL AS PER COLLECTION DOCUMENT (ACTUAL BILL) WAS FOUND DURING THE COURSE OF SURVEY. IT WOULD THEREFORE SHOW THAT AS PER THE ACTUAL AM OUNT THE SALE FIGURE WAS SOMETHING ELSE AND REALIZATION WAS MENTIONED AT LOWER FIGURE. NO CONFIRMATION FROM THE SAME PARTY IS FILED TO EXPLAI N THE ABOVE DISCREPANCY. IT WOULD THEREFORE PROVE THE FINDING S OF THE AUTHORITIES BELOW THAT THE ASSESSEE WAS SHOWING THE SALES AT LO WER AMOUNT THAN THE ACTUAL BILL AMOUNT. THE ASSESSEE ALSO USED TO MAINT AIN TWO SETS OF BILLS OF SALES THROUGH WHICH SALES ARE MADE BUT SHOWING DIFF ERENT FIGURES. IT WOULD ALSO SUPPORT THE FINDINGS OF THE AO THAT THE ASSESSEE WAS NOT RECORDING PROPER SALES IN THE BOOKS OF ACCOUNT. SIM ILARLY FOR RS.26 633/- NO AMOUNT HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT DE SPITE MATERIAL SEIZED DURING THE COURSE OF SURVEY TO SHOW THAT THE ASSESSEE HAD MADE PAYMENT FOR EXPENDITURE ON EXHIBITION OF RS.26 633/ - BUT NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THIS WOULD ALSO SUPPOR T THE FINDINGS OF THE AO THAT THE EXPENDITURE HAS NOT BEEN PROPERLY ACCOU NTED FOR IN THE BOOKS OF ACCOUNT. THE ASSESSEE ALSO CLAIMED THAT PR INCIPAL HAS INCURRED EXPENDITURE FOR EXHIBITION BUT NO SUCH EVIDENCE WAS FILED BEFORE THE AUTHORITIES BELOW. THERE WAS ALSO DISCREPANCY IN TH E STOCK SHOWN TO THE BANK AND AS PER BOOKS OF ACCOUNT BUT ULTIMATELY IN THE NEXT ASSESSMENT YEAR IT WAS FOUND THAT STOCK DO NOT TALLY AS PER TH E BOOKS OF ACCOUNT WHICH WAS FOUND DURING THE COURSE OF SURVEY. THE AB OVE FACTS WERE THEREFORE SUFFICIENT TO HOLD THAT THE BOOK RESULTS OF THE ASSESSEE ARE NOT CORRECT AND COMPLETE. THE DISCREPANCIES ABOVE NOTED BY THE AO HAVE NOT BEEN EXPLAINED THROUGH ANY MATERIAL OR EVIDENCE ON RECORD. HOWEVER WE MAY NOTE AS REGARDS CASH SALES MADE BY THE ASSESSEE THE AO HEAVILY RELIED UPON THE STATEMENT OF THE ASSESSEE RECORDED AT THE TIME OF SURVEY IN WHICH THE ASSESSEE AGREED TO HAVE RECEIVED PAYME NT IN CASH OF THE ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 9 SALES BUT SUCH WAS GENERAL STATEMENT MADE BY THE AS SESSEE WITHOUT HAVING ANY CORROBORATIVE EVIDENCE ON RECORD. IN THE ABSENCE OF ANY SPECIFIC MATERIAL ON RECORD FOR MAKING CASH SALES B Y THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNT THE AUTHORITIES BELOW WERE NO T JUSTIFIED IN RELYING UPON THE STATEMENT OF THE ASSESSEE RECORDED AT THE TIME OF SURVEY TO ENHANCE GROSS PROFIT BY TREATING THE SALES INC ASH MADE OUT OF BOOKS OF ACCOUNT. THEREFORE THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN REJECTING THE BOOK RESULTS ON THIS REASON. HOWEVER WE FIND T HAT LEARNED DR WAS JUSTIFIED IN CONTENDING THAT SINCE THE EXPENDITURE WERE NOT PROPERLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND THAT THE EXPENDITURE WERE NOT SUPPORTED BY ANY MATERIAL OR EVIDENCE THEREFORE T HIS ITSELF IS A SUFFICIENT REASON TO REJECT THE BOOK RESULTS OF THE ASSESSEE. WE THEREFORE CONSIDERING THE INCRIMINATING EVIDENCES AND EXPLANA TION OF THE ASSESSEE IN TOTAL HOLD THAT THE BOOK RESULTS OF THE ASSESSEE HAVE BEEN RI GHTLY REJECTED BY THE AUTHORITIES BELOW U/S 145 OF THE ACT. THE DISCR EPANCIES POINTED OUT BY THE AO IN THE ASSESSMENT ORDER AND INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SURVEY CLEARLY INDICATED THAT THE SAME DEFICIENCIES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE VITAL A ND SIGNIFICANT TO REJECT THE BOOK RESULTS. HOWEVER CONSIDERING THE ABOVE FACT AND THE FACT TH AT THERE WAS NO BASIS TO MAKE THE ADDITION ON THE BASI S OF CASH SALES OUTSIDE THE BOOKS OF ACCOUNT WE ARE OF THE VIEW TH AT THE ADDITION IS ON EXCESSIVE SIDE. HONBLE PRIVY COUNCIL IN THE CASE O F CIT CENTRAL AND UNITED PROVINCES VS LAXMINARAYAN BADRIDAS 5 ITR 170 HELD THAT ESTIMATE OF INCOME SHOULD BE FAIR. AO SHOULD NOT AC T DISHONESTLY OR VINDICTIVELY. ALL KNOWLEDGE PREVIOUS HISTORY LOCA L KNOWLEDGE AND CIRCUMSTANCES OF THE ASSESSEE TO BE CONSIDERED TO A RRIVE AT FAIR AND PROPER ESTIMATION OF INCOME. THE ASSESSEE IN THE EARLIER ASSESSMENT YEAR HAS SHOWN GROSS PROFIT RATE OF 13.24% AND IN SUBSEQ UENT ASSESSMENT YEAR 1999-2000 HE HAS DISCLOSED GROSS PROFIT RATE OF 19. 99%. THEREFORE CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES IT WOU LD BE REASONABLE AND PROPER TO ESTIMATE THE INCOME OF THE ASSESSEE BY ESTIMATING THE TOTAL SALES AT ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 10 RS.1 50 00 000/- AND DIRECT THE AO TO APPLY GROSS P ROFIT RATE AT 18% AND ACCORDINGLY CALCULATE THE TAXABLE INCOME OF THE ASS ESSEE. AS A RESULT WE MODIFY THE ORDERS OF THE AUTHORITIES BELOW TO THAT EXTENT AND DIRECT THE AO TO CALCULATE THE INCOME ACCORDINGLY ON THE SALES OF RS.1 50 00 000/- BY APPLYING GROSS PROFIT RATE OF 18%. AS RESULT GR OUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED PARTLY. 7. ON GROUND NO.2 THE ASSESSEE CHALLENGED THE ADDI TION ON ACCOUNT OF COMMISSION PAYMENT WORTH RS.70 000/-. COMMISSION WAS PAID TO SHRI HARIHAD D. NIMA HUF AND PRANJEEVANDAS D. NIMA HU F. THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT(A) THAT DISALLOWAN CE OF THE COMMISSION IS NOT JUSTIFIED BECAUSE SHRI PRANJEVANDAS D. NIMA WHO IS PARTNER IN THE FIRM M/S. MINERWA GRANITES ENGAGED IN THE TRADING D ECORATIVE FLOORING MATERIALS GLASS BRICKS ETC. ATTENDING THE FACTORY OF THE ASSESSEE TO SUPERVISE THE WORK CUTTING AND SUPPLYING OF STONES AND MARBLES ETC. IT WAS SUBMITTED THAT SHRI H. D. NIMA ALSO RENDERED SI MILAR SERVICES TO THE ASSESSEE. THEREFORE COMMISSION PAID TO THEM SHOULD BE ALLOWED AS EXPENDITURE. THE LEARNED CIT(A) HOWEVER DID NOT AC CEPT THE CONTENTION OF THE ASSESSEE AND REJECTED THIS GROUND OF APPEAL OF THE ASSESSEE BECAUSE THEY ARE FULLTIME PARTNERS IN OTHER FIRMS AND HAD N O TIME TO ATTEND THE BUSINESS OF THE ASSESSEE AND NO MATERIAL/EVIDENCE A RE PRODUCED TO SHOW THAT THE ABOVE SERVICES WERE RENDERED BY THEM. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PB -53 PARA 6.1 IN THIS EXPLANATION IS GIVEN ON THIS ISSUE THAT THEY HAVE ATTENDED THE BUSINESS ACT IVITY OF THE ASSESSEE AND RENDERED SERVICES IN THE BUSINESS OF THE ASSESS EE. ON THE OTHER HAND THE LEARNED DR SUBMITTED THAT NO EVIDENCE OF ACTUAL SERVICES RENDERED BY THEM HAVE BEEN FILED BEFORE THE AO AND THAT H. D. NIMA HUF IS OF THE ASSESSEE ONLY AND THERE IS NO DIFFER ENCE BETWEEN INDIVIDUAL OR HUF THROUGH KARTA. HE HAS SUBMITTED THAT P. D. N IMA HAS NOT RENDERED ANY SERVICES FOR THE ASSESSEE. THEREFORE ADDITION IS CORRECTLY MADE. ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 11 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE AR E OF THE VIEW THAT THE ADDITION IS RIGHTLY MADE BY THE AUTHORITIES BEL OW. H. D. NIMA HUF IS OF THE ASSESSEE BECAUSE ASSESSEE INDIVIDUAL IS THE KARTA OF HIS HUF. THEREFORE WHAT INDIVIDUAL HAS TO DO FOR HIS BUSINE SS IS EXPLAINED TO BE DONE BY THE KARTA OF THE HUF. THE LEARNED DR IS TH EREFORE JUSTIFIED IN CONTENDING THAT NO SPECIFIC SERVICES HAVE BEEN REND ERED BY THE HUF. SIMILARLY P. D. NIMA HUF PERTAIN TO HIS BROTHER A ND NO EVIDENCE IS FILED AS TO WHAT SERVICES HAVE BEEN RENDERED BY THEM IN T HE BUSINESS OF THE ASSESSEE. MERE EXPLANATION IS GIVEN THAT HE WAS INV OLVED IN SUPERVISING CUTTING AND SUPPLYING OF STONES MARBLES ETC. FOR T HE ASSESSEE FOR WHICH NO EVIDENCE IS FILED. IN THE ABSENCE OF ANY EVIDENC E ON RECORD THAT THEY HAVE RENDERED ANY ACTUAL SERVICES FOR THE ASSESSEE WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE A UTHORITIES BELOW. WE CONFIRM THE FINDINGS AND DISMISS THIS GROUND OF APP EAL OF THE ASSESSEE. 9. ON GROUND NO.3 THE ASSESSEE CHALLENGED THE ADDI TION OF RS.26 633/- ON ACCOUNT OF UNRECORDED EXPENDITURE IN CURRED ON EXHIBITION . SINCE WE HAVE CONFIRMED THE FINDING OF THE AUTHORITIES BELOW ON THIS ISSUE ON GROUND NO.1 THEREFORE THIS ADDIT ION WOULD REMAIN SUSTAINED. THE LEARNED COUNSEL HOWEVER RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS ST AR BUILDERS 294 ITR 338 (GUJ) AND SUBMITTED THAT IF THE ADDITION IS MAD E ON ACCOUNT OF UNEXPLAINED INCOME IN INVESTMENT THAT WILL GIVE RI SE TO THE COST AND ADDITION WILL REMAIN ZERO. HOWEVER WE MAY NOTE THA T SINCE THIS ADDITION IS CONSIDERED ON THE ISSUE OF ESTIMATE OF GROSS PRO FIT THEREFORE NO SEPARATE ADDITION IS REQUIRED TO BE MADE. AO IS TH EREFORE DIRECTED NOT TO TAKE INTO ACCOUNT THE ADDITION OF RS.26 633/- SEPAR ATELY. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY DISPOSED OF. 10. ON GROUND NO.4 THE ASSESSEE CHALLENGED THE ADD ITION OF RS.69 600/- BEING INCOME FROM TRUCK. THE AO NOTED THAT THE ASSESSEE IS ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 12 HAVING ONE TRUCK ONE TATA 407 AND LOADING RICKSHAW . DURING THE COURSE OF SURVEY A BLANK TRANSPORT RECEIPT BOOK OF M/S. ADITYA TRANSPORT WAS FOUND. ONE COPY OF THIS LR WAS INVENTORISED VID E PAGE NO.73 TO 75 OF D-12. NO INCOME FROM TRANSPORT BUSINESS WAS SHOW N BY THE ASSESSEE. THE ASSESSEE WAS DIRECTED AS TO WHY INCOME FROM THE SE VEHICLES BE NOT CALCULATED AS PER PROVISIONS OF SECTION 44AE OF THE IT ACT. THE ASSESSEE EXPLAINED THAT THE ABOVE PROVISIONS IS APPLICABLE IN THE BUSINESS OF PLYING HIRING OR LEASING OF GOODS CARRIAGE BUT IN FACT VEHICLES ARE ENGAGED IN CARRYING GOODS OF THE ASSESSEE. THE AO DID NOT A CCEPT THE EXPLANATION OF THE ASSESSEE BECAUSE BLANK LR BOOK IN THE NAME O F ADITYA TRANSPORT WAS FOUND DURING THE COURSE OF SURVEY. FURTHER ON VERIFICATION OF THE PURCHASE BILLS IT WAS NOTICED THAT LR AND LORRY NUM BER IS NOT SHOWN IN THE BILL OF THE PURCHASES WHICH DO NOT MATCH WITH T HE REGISTRATION NUMBER OF THE VEHICLES OWNED BY THE ASSESSEE. THUS REGISTRATION NUMBERS OF THE VEHICLES MENTIONED IN THESE BILLS AR E NOT THE VEHICLES OWNED BY THE ASSESSEE. THE AO THEREFORE NOTED THA T THE ASSESSEE WAS DOING BUSINESS OF HIRE OF GOODS IN THE NAME OF ADIT YA TRANSPORT FOR WHICH NO INCOME IS OFFERED. THE AO BY INVOKING THE PROVIS IONS OF SECTION 44AE OF THE IT ACT CALCULATED THE INCOME AT RS.69 600/-. ADDITION WAS ACCORDINGLY MADE. THE LEARNED CIT(A) ON THE SAME BA SIS CONFIRMED THE ADDITION. 11. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED T O PB -52 WHICH IS EXPLANATION FILED BEFORE THE AUTHORITIES BELOW AND PB-61 AND 63 TO SHOW THAT ALL PURCHASE BILLS THE NUMBERS OF VEHICLES OF THE ASSESSEE ARE MENTIONED AS PER THE REGISTRATION. HE HAS SUBMITTED THAT THE ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF PLYING TRUCKS. T HEREFORE ADDITION IS UNJUSTIFIED. ON THE OTHER HAND THE LEARNED DR RELI ED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT BLANK TRAN SPORT RECEIPT BOOK IN THE NAME OF ADITYA TRANSPORT WAS FOUND FROM THE POS SESSION OF THE ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 13 ASSESSEE WHICH WOULD SHOW THAT THE ASSESSEE WAS DOI NG THE BUSINESS OF TRANSPORT FOR WHICH NO INCOME IS OFFERED FOR TAXATI ON. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL AVAILABLE ON RECORD AND DO NOT FIND ANY JUSTIFICATION TO INTE RFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. TRANSPORT RECEIPT IN THE NAM E OF ADITYA TRANSPORT WAS FOUND FROM THE POSSESSION OF THE ASSESSEE WHICH WAS SEIZED AND INVENTORISED. ADMITTEDLY ASSESSEE IS HAVING ONE TR UCK ONE TATA 407 AND ONE LOADING RICKSHAW. THE ASSESSEE HAS FAILED TO EX PLAIN POSSESSION OF TRANSPORT RECEIPT BOOK IN THE NAME OF ADITYA TRANSP ORT. RECOVERY OF THE INCRIMINATING MATERIAL SHOWS THAT ASSESSEE WAS ENGA GED IN THE BUSINESS OF CARRYING GOODS HIRING OR LEASING OF GOODS AS P ER SECTION 44AE OF THE IT ACT. SINCE THE ASSESSEE WAS PLYING GOODS CARRIAG E AS PER THE SEIZED MATERIAL THEREFORE AUTHORITIES BELOW WERE JUSTIFI ED IN CALCULATING THE TAXABLE INCOME AS PER SECTION 44AE OF THE IT ACT. A S A RESULT THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 13. ON GROUND NO.5 ASSESSEE CHALLENGED THE ORDER O F THE LEARNED CIT(A) IN NOT ALLOWING DEPRECIATION TO THE EXTENT O F LOADING RICKSHAW. THE LEARNED CIT(A) NOTED THAT DEPRECIATION ON LOADI NG RICKSHAW IS ADMISSIBLE BECAUSE THE ASSESSEE USED THE SAME FOR I TS BUSINESS PURPOSE. THE AO WAS OF ACCORDINGLY DIRECTED TO ALLOW DEPRECI ATION ON LOADING RICKSHAW. SINCE RELIEF HAS ALREADY BEEN GRANTED BY THE LEARNED CIT(A) THEREFORE NO FURTHER FINDING IS REQUIRED. GROUND N O.5 OF THE APPEAL OF THE ASSESSEE IS ACCORDINGLY DISPOSED OF. 14. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUND NOS. 6 AND 7 ARE GENERAL. THESE ARE ACCORDINGLY DISMISSE D. 15. AS A RESULT APPEAL OF THE ASSESSEE PARTLY ALLO WED. ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 14 ITA NO.108/AHD/2004 (ASSESSEES APPEAL) ITA NO.432/AHD/2004 (DEPARTMENTAL APPEAL) 16. ON GROUND NOS. 1 2 AND 3 OF THE APPEAL OF THE ASSESSEE THE ASSESSEE CHALLENGED ESTIMATION OF INCOME BY REJECTI NG BOOK RESULTS. THE REVENUE ON GROUND NO.1 CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN GRANTING RELIEF IN A SUM OF RS.7 10 000/-. THIS ISS UE IS SAME AS IS CONSIDERED ON GROUND NO.1 IN THE APPEAL OF THE ASSE SSEE FOR ASSESSMENT YEAR 1998-99. IN THIS YEAR THE ASSESSEE HAS SHOWN GROSS PROFIT OF RS.39 10 286/- @ 19.99% ON THE TOTAL SALES OF RS.1 95 56 621/-. SURVEY WAS CONDUCTED ON 17 TH MARCH 1999 WHICH PERTAINING TO ASSESSMENT YEAR UNDER APPEAL. THE PHYSICAL STOCK DID NOT TALLY WITH THE BOOK RESULTS. THE MARGIN IN THE ACTUAL SALES AND [PURCHASES WAS ALSO FOUND VARIED FROM 2.77% TO 37.93%. SEVERAL DISCREPANCIES WERE NOTED A S WE NOTED IN THE PRECEDING ASSESSMENT YEAR. THE PHYSICAL STOCK COULD NOT BE RECONCILED WITH THE BOOK RESULTS. THERE WERE DIFFERENCE IN THE ACTUAL SALES AND THE ACTUAL AMOUNT OF SALES RECORDED IN THE BOOKS OF ACC OUNT. CERTAIN EXPENDITURE WAS ALSO NOT FOUND RECORDED IN THE BOOK S OF ACCOUNT. THE AO ACCORDINGLY REJECTED THE BOOK RESULTS. CASH SALES W ERE ALSO FOUND OUTSIDE THE BOOKS OF ACCOUNT AS PER THE STATEMENT OF THE AS SESSEE. THE AO ACCORDINGLY ESTIMATED TOTAL SALES AT RS.2 00 00 000 /- AND APPLIED GROSS PROFIT RATE OF 31.05% AND MADE ADDITION OF RS.22 9 9 714/-. SIMILAR SUBMISSIONS WERE MADE BEFORE THE LEARNED CIT(A) AS WERE MADE IN THE PRECEDING ASSESSMENT YEAR. THE LEARNED CIT(A) CONFI RMED THE FINDINGS OF THE AO IN REJECTING THE BOOK RESULTS. HOWEVER THE GROSS PROFIT RATE WAS REDUCED TO 27.5% AS AGAINST 31.05% APPLIED BY THE A O. THE ESTIMATED SALES REMAINED SAME AT RS.2 00 00 000/-. ADDITION OF RS.15 89 714/- WAS ACCORDINGLY CONFIRMED AND THE ASSESSEE WAS GRAN TED RELIEF IN A SUM OF RS.7 10 000/-. LEARNED REPRESENTATIVES OF BOTH T HE PARTIES REITERATED THEIR SUBMISSIONS AS HAVE BEEN MADE IN THE ASSESSME NT YEAR 1998-99. ON CONSIDERATION OF THE ABOVE FACTS WE ARE OF THE VIEW THAT THIS ISSUE IS IDENTICAL AS IS CONSIDERED IN ASSESSMENT YEAR 1998- 99. BY FOLLOWING THE ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 15 SAME REASONS FOR DECISION WE CONFIRM THE FINDINGS OF THE AUTHORITIES BELOW IN REJECTING THE BOOK RESULTS OF THE ASSESSEE . HOWEVER WE FIND THAT APPLICATION OF GROSS PROFIT RATE IS STILL ON HIGHER SIDE. WE ACCORDINGLY MODIFY THE ORDERS OF THE AUTHORITIES BELOW AND DIRE CT THE AO TO APPLY GROSS PROFIT RATE OF 24% AGAINST ESTIMATED SALES OF RS.2 00 00 000/- AND WORK OUT THE GROSS PROFIT ACCORDINGLY. AS A RESULT THE APPEAL OF THE ASSESSEE ON THIS GROUND IS PARTLY ALLOWED. DEPARTME NTAL APPEAL STANDS DISMISSED. 17. ON GROUND NOS. 4 AND 6 THE ASSESSEE CHALLENGED THE ADDITION ON ACCOUNT OF UNACCOUNTED PAYMENT MADE TO SHRI ASHARAM PATEL OF RS.15 000/- SHRI BANVARI OF RS.36 500/- SHRI SAND HEEPBHAI OF RS.20 000/- AND DEVENDRABHAI OF RS.25 000/-. IN ALT ERNATE SUBMISSIONS IT IS STATED THAT EFFECT OF THE ADDITION WOULD BE N EUTRALIZED IN VIEW OF THE PROVISIONS OF SECTION 69C OF THE IT ACT. THE LEARNE D CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE AT THE ASSES SMENT STAGE THE ASSESSEE HIMSELF ADMITTED THAT THESE PAYMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNT AND AGREED FOR ADDITION TO HIS TOT AL INCOME ON ACCOUNT OF SUCH UNRECORDED PAYMENTS. THE LEARNED CIT(A) FUR THER NOTED THAT SINCE THE ASSESSEE AGREED TO SUCH ADDITIONS THEREF ORE THE ASSESSEE PREVENT ED THE DEPARTMENT FROM INVESTIGATING INTO T HE MATTER FURTHER AT THE ASSESSMENT STAGE. THEREFORE THE ASSESSEE CANNO T BE ALLOWED TO RETRACT FROM SUCH SURRENDER. THIS GROUND OF APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISMISSED. 18. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PB -110 WHICH IS REPLY OF THE ASSESSEE AND SUBMITTED THAT IN CASE THE ADDI TION IS CONFIRMED THE SAME MAY BE TELESCOPED ON ACCOUNT OF ADDITION IF AN Y MADE TOWARDS GROSS PROFIT. ON THE OTHER HAND THE LEARNED DR REL IED UPON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 16 19. ON CONSIDERATION OF THE ABOVE FACTS WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THIS MATTER. THE AO A T THE ASSESSMENT STAGE CONFRONTED THE MATERIAL COLLECTED DURING THE COURSE OF SURVEY TO THE ASSESSEE AND SOUGHT EXPLANATION. THE ASSESSEE AGREE D TO THESE SEIZED MATERIALS FOR THE PURPOSE OF ADDITION AND OFFERED T HE SAME FOR THE PURPOSE OF TAXATION. SINCE THE ASSESSEE FAILED TO E XPLAIN THE MATERIAL FOUND DURING THE COURSE OF SURVEY THEREFORE THERE IS NO INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW IN MAKING OR CONFIR MING THE ADDITION. WE ACCORDINGLY DO NOT FIND ANY JUSTIFICATION TO INTER FERE WITH THE ORDERS OF THE AUTHORITIES BELOW. HOWEVER WE HAVE CONFIRMED T HE ADDITION ON QUANTUM AND THEREFORE THIS ADDITION WOULD BE TELE SCOPED FROM THE ADDITION MADE ON ACCOUNT OF GROSS PROFIT. NO SEPARA TE ADDITION SHALL BE MADE OF THE SAME AMOUNT WHILE CALCULATING THE TAXAB LE INCOME. GROUND NOS. 4 AND 6 OF THE APPEAL OF THE ASSESSEE ARE ACCO RDINGLY DISPOSED OF. 20. ON GROUND NO.5 THE ASSESSEE CHALLENGED THE ADD ITION ON ACCOUNT OF TRUCK BUSINESS AND RS.67 200/- U/S 44AE OF THE I T ACT. LEARNED CIT(A) CONFIRMED THE ADDITION BY FOLLOWING HIS ORDE R FOR ASSESSMENT YEAR 1998-99 IN WHICH WE HAVE DISMISSED THE APPEAL OF TH E ASSESSEE. BY FOLLOWING THE SAME ORDER WE CONFIRM THE ADDITION A ND DISMISS T HIS GROUND OF APPEAL OF THE ASSESSEE. 21. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUND NOS. 7 AND 8 ARE GENERAL. THESE ARE ACCORDINGLY DISMISSED. THERE IS NO OTHER GROUND IN THE APPEAL OF THE ASSESSEE. 22. IN THE DEPARTMENTAL APPEAL GROUND NO.2 IS RAIS ED TO CHALLENGE THE DELETION OF ADDITION OF RS.4 25 000/- ON ACCOUNT OF UNDISCLOSED INCOME FROM MOLDING WORKS. THE LEARNED CIT(A) NOTED THAT M OLDING WORKS OF MARBLE SLABS ETC. IS ASSESSEES PART BUSINESS ON WH ICH GROSS PROFIT IS MADE. THEREFORE NO SEPARATE ADDITION IS REQUIRED T O BE MADE ON THIS AMOUNT. WE FIND NO INFIRMITY IN THE ORDER OF THE LE ARNED CIT(A) IN ISSUING ITA NO.107 108 AND 432/AHD/2004 SHRI HARIHAR D. NIMA 17 SUCH DIRECTION. WE ACCORDINGLY DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 23. AS A RESULT APPEAL OF THE ASSESSEE IS PARTLY A LLOWED AND DEPARTMENTAL APPEAL IS DISMISSED. 24. AS A RESULT OF THE ABOVE DISCUSSIONS BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND THE DEPARTMENTAL AP PEAL IS DISMISSED. ORDER PRONOUNCED ON 12-03-2010 SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 12-03-2010 LAKSHMIKANT/- 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 D Y. REGISTRAR ITAT AHMEDABAD