Consistency in tax findings and statutory refund-linked business profits supported deletion of the addition and section 80-IB deduction.

An addition for alleged unrecorded silver sales was deleted because the same test report and reasoning had already been rejected in the assessee's own earlier year, with no new material to justify a different view; the principle of consistency was applied and the deletion was upheld. Excise duty refund relating to the Agartala unit was also treated as part of business profits for deduction under section 80-IB, because the duty was paid and refunded under the same statutory clearance mechanism and the accounting entries were neutral. The refund was therefore regarded as arising directly from the industrial undertaking, and the deduction was allowed without reducing that amount.

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Issues: (i) Whether the addition on account of alleged sale of silver outside the books was rightly deleted; (ii) Whether refund of excise duty relating to the Agartala unit formed part of profits derived from the industrial undertaking for deduction under section 80-IB.

Issue (i): Whether the addition on account of alleged sale of silver outside the books was rightly deleted.

Analysis: The addition was based on the same test report and the same line of reasoning that had already been rejected in the assessee's own earlier year. No new material or distinguishing facts were brought on record. The principle of consistency was applied, and the earlier decision deleting the addition was followed.

Conclusion: The deletion of the addition was upheld and the issue was decided in favour of the assessee.

Issue (ii): Whether refund of excise duty relating to the Agartala unit formed part of profits derived from the industrial undertaking for deduction under section 80-IB.

Analysis: The excise duty was paid only as part of the notified procedure for clearance of goods and was later refunded under the same notification. The book entries showing debit of duty and credit of refund neutralised each other, so the refund did not represent a separate profit disconnected from the manufacturing activity. The effective source of the receipt lay in the statutory exemption-cum-refund mechanism governing the industrial unit.

Conclusion: The refund was treated as part of the unit's business profits and deduction under section 80-IB was allowed without reduction of that amount, in favour of the assessee.

Final Conclusion: Both grounds raised by the Revenue failed, and the order granting relief to the assessee was sustained.

Ratio Decidendi: Where a receipt arises directly from a statutory exemption and refund mechanism connected with the industrial activity, and the accounting entries merely reflect a neutral pass-through, the receipt is includible in business profits for deduction purposes; a repeated challenge without new material also warrants consistency with the earlier decision.

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