Mistaken unit comparison cannot sustain unaccounted production addition without independent incriminating material.

An addition for alleged unaccounted production was held unsustainable where it rested on a mistaken comparison of production figures with sales records in different units of measurement. The department treated tablets and capsules as strips, creating an artificial mismatch, while records for other products tallied and no independent incriminating material showed excess raw material purchases, unaccounted labour or manufacturing, or receipt of unaccounted sale consideration. On these facts, the adverse inference was not justified, the deletion of the addition stood, and no substantial question of law arose.

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Issues: (i) Whether the addition for alleged unaccounted production at the Vapi unit was justified on the basis of the seized material and the comparison of production and sales records.

Issue (i): Whether the addition for alleged unaccounted production at the Vapi unit was justified on the basis of the seized material and the comparison of production and sales records.

Analysis: The addition was founded on a comparison between production figures supplied by the production manager and the sales data maintained in strips. The concurrent factual finding was that the department treated tablets and capsules as strips without accounting for the difference in units, which led to an erroneous and artificial mismatch. The records of other products matched, and there was no cogent material showing excess purchase of raw materials, unaccounted labour or manufacturing , or receipt of unaccounted sale consideration despite search action. On these facts, the adverse inference drawn by the Assessing Officer was not sustainable, and no substantial question of law arose from the deletion of the addition.

Conclusion: The addition for alleged unaccounted production was not justified, and the issue is decided in favour of the assessee.

Final Conclusion: The appeal fails because the disputed addition rested on an erroneous unit comparison and was unsupported by independent incriminating evidence, leaving no substantial question of law for interference.

Ratio Decidendi: Where an addition in search assessment is based on a mistaken comparison of different units of measurement and is unsupported by independent incriminating material, concurrent factual findings deleting the addition will not give rise to a substantial question of law.

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