Trading addition based on comparable cases deleted where disclosed net profit rate was already higher than cited benchmarks.

The sustained trading addition in the liquor account was deleted because the assessee's disclosed net profit rate was higher than the comparable cases relied on by the revenue, and the assessee's own comparables also showed lower accepted profit rates. On that material, the estimate used to enhance the trading result was found insufficient to support the addition, so the assessee succeeded.

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Issues: Whether the sustained addition of Rs. 5,000 in the liquor account was justified on the basis of estimated trading results and comparable cases.

Analysis: The assessee's disclosed net profit rate was higher than the rates shown in the comparable cases relied upon by the revenue. The comparable instances cited by the assessee also indicated lower accepted profit rates. The basis adopted for enhancing the trading result was therefore not found sufficient to sustain the addition.

Conclusion: The addition sustained by the first appellate authority was not justified and was deleted. The issue was decided in favour of the assessee.

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