Appeals allowed, double taxation prevented, profit estimation upheld, section 68 addition deleted.

The ITAT allowed the assessee's appeal and dismissed the revenue's appeal. The ITAT emphasized that the same amount cannot be taxed twice, upheld the CIT(A)'s profit estimation for suppressed sales, and directed the deletion of the addition under section 68. The cross-objection of the assessee was dismissed as infructuous.

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Issues Involved:
1. Reopening of Assessment under section 147/148 of the Income Tax Act.
2. Addition under section 68 of the Income Tax Act for unexplained cash credits.
3. Addition for alleged suppressed sales.
4. Claim of double addition and the principle of telescoping.

Detailed Analysis:

I. Reopening of Assessment:
- The CIT(A) held that the assessee is barred from challenging the reopening of assessment under section 147/148 of the Act. The assessee contended that the reopening should have been decided on merits, considering the facts and provisions of law. However, the assessee did not press this ground before the ITAT, and it was dismissed as not pressed.

II. Addition under Section 68:
- The CIT(A) confirmed the addition of Rs. 3,75,39,177 as unexplained cash credit under section 68 and further enhanced it by Rs. 1,04,876, totaling Rs. 3,76,44,053. The assessee argued that section 68 does not apply as the amount represents sales realization, not deposits, and pertains to a different assessment year (1996-97).
- The revenue's inquiry revealed that the parties to whom sales were shown did not exist. The AO treated 33% of the total sales as unexplained cash credit due to the non-production of books of accounts, which were allegedly seized by the Excise Department.
- The ITAT noted that the amount of sales was already offered to tax and cannot be taxed again under section 68. The ITAT directed the AO to delete the addition, as the same amount cannot be taxed twice.

III. Addition for Alleged Suppressed Sales:
- The AO made an addition of Rs. 3,44,10,000 for suppressed sales based on the difference in the sale price of PTY products. The CIT(A) reduced this to Rs. 36,54,000, considering only the profit element on suppressed sales, as per the precedent set by the Gujarat High Court.
- The ITAT upheld the CIT(A)'s decision, noting that once books of accounts are rejected, profit estimation on a scientific basis is required. The ITAT found no reason to interfere with the CIT(A)'s estimation of profit.

IV. Claim of Double Addition and Telescoping:
- The assessee argued that the addition of cash credit and unaccounted/suppressed sales results in double addition, which is against equity and justice. The ITAT agreed, noting that the same amount cannot be taxed twice and directed the deletion of the addition under section 68.

Conclusion:
- The appeal of the assessee was allowed, the appeal of the revenue was dismissed, and the cross-objection of the assessee was dismissed as infructuous. The ITAT emphasized that the same amount cannot be taxed twice and upheld the CIT(A)'s profit estimation for suppressed sales while directing the deletion of the addition under section 68.

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