Estimated gross-profit additions require evidentiary support and valid comparables; unsupported enhancement raises no substantial legal question.

Deletion of an estimated gross-profit addition after rejection of books did not raise a substantial question of law where the enhanced rate lacked supporting search material, comparable cases, or a justified basis to reject the assessee's comparables. The declared gross-profit rate was consistent with other years and exceeded rates reported by comparable carpet-manufacturing concerns, while the revenue identified no special circumstance supporting the higher estimate. The analysis states that deletion of the addition stands in favour of the assessee.

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Issues: Whether deletion of the estimated addition to gross profit, made after rejection of the books of account, gave rise to a substantial question of law.

Analysis: The addition based on enhancement of the gross-profit rate lacked supporting material found during search and was not founded on comparable cases or a justified basis for rejecting the comparables furnished by the assessee. The assessee's declared gross-profit rate was also consistent with its results in other years and higher than the rates disclosed by comparable carpet-manufacturing concerns. The revenue identified no special circumstance warranting the higher estimated rate.

Conclusion: The deletion of the gross-profit addition did not give rise to a substantial question of law and stands in favour of the assessee.

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