Tribunal partially allows appeal, deletes profit estimation addition, upholds disallowance under section 80U, and affirms CIT(A)'s decision.

The tribunal partly allowed the appeal, deleting the addition made on the estimation of profit issue due to lack of incriminating material. However, the disallowance of deduction claimed under section 80U was upheld as the appellant withdrew the claim during assessment proceedings. The tribunal dismissed the appellant's arguments, affirming the CIT(A)'s decision in this regard.

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Issues involved:
1. Addition of income based on estimation of profit.
2. Disallowance of deduction claimed under section 80U.

Analysis:

Issue 1: Addition of income based on estimation of profit
The appellant, engaged in the trading scrap business, filed the original return for the assessment year 2002-03 admitting a taxable income. Subsequently, search and seizure operations were conducted, leading to the filing of a revised return. The assessing officer made additions to the income, including a specific amount on account of estimation of profit due to lack of supporting bills for purchase and sales. The appellant contended that the addition was not based on incriminating material and should be deleted. However, the CIT(A) upheld the addition, stating that the appellant failed to provide sufficient evidence regarding purchases and sales. The appellant argued that a similar issue was decided in their favor in a previous year's case. The tribunal, considering the lack of incriminating material and following the precedent, deleted the addition, stating that in the absence of such material, the addition cannot be made on an estimate basis under section 153A of the Income Tax Act.

Issue 2: Disallowance of deduction claimed under section 80U
Regarding the disallowance of deduction claimed under section 80U, the appellant submitted a certificate in support of the claim during the assessment proceedings. However, upon questioning the genuineness of the certificate, the appellant withdrew the claim. The CIT(A) upheld the disallowance, noting that the appellant withdrew the claim during the assessment. The appellant argued that the issue was decided in their favor in a previous year's case. The tribunal, considering the withdrawal of the claim by the appellant, upheld the CIT(A)'s decision, stating that since the appellant withdrew the claim, the disallowance was justified. Therefore, the tribunal dismissed the grounds raised by the appellant in this regard, upholding the CIT(A)'s order.

In conclusion, the tribunal partly allowed the appeal of the assessee, deleting the addition made on the estimation of profit issue based on lack of incriminating material but upholding the disallowance of deduction claimed under section 80U due to the appellant's withdrawal of the claim during assessment proceedings.

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