TaxTMI 
TaxTMI 
2011 (1) TMI 943
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....A) dated 30th October, 2006. 2. The respondent is engaged in the business of manufacturing of silicon carbide waterproof paper. In pursuance of the survey conducted under Section 133A of the Act, the respondent (assessee) offered income for taxation and made three surrenders, namely, (i) Rs.7,69,509/- on account of unexplained cash found, (ii) Rs.2,90,925/- on account of excess stock found, and (iii) Rs.4,40,000/- on account of unexplained investments made in machinery and tools. The assessee filed return declaring income of Rs.21,78,910/-. Vide letter dated 21.03.2005, the assessee was asked to explain as to why the books of accounts should not be rejected under Section 145(3) of the Act. In the assessment proceedings, the Assess....
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.... • Better trading results are shown as regards the quantity as well as the financial Gross Profit ratio also improved. The reason of decline in sale was also explained. • The calculation of the Assessing Officer was giving wrong impression, i.e., increase in consumption rate of raw material per rim manufactured, whereas there was more production and material consumed actually decline during the year. • The working of difference in closing stock on the basis of monthwise sales and purchases was incorrect. This mistake was pointed out and the exact calculation has been submitted. • The presumption of diesel purchase (no evidence was given) from different places was satisfactor....
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....over at Rs.1.20 crore instead of Rs.85,04,823/- as declared by the assessee. Based on this conclusion, the CIT(A) ordered for deletion of addition of Rs.34,95,177/- made by the AO. 5. This is a pure question of fact examined by the CIT(A) and confirmed by the ITAT. We do not find any infirmity in the order of the ITAT in this regard. 6. With regard to the addition of Rs.3,65,000/- made by the AO on account of unexplained unsecured loans, the AO noted that the assessee had shown unsecured loan to the tune of Rs.3.65 lakh from three persons. The AO recorded that the assessee had filed confirmations of these persons but failed to explain the source of amount advanced by these persons. The assessee in reply to the notice by ....
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....use the facts are different. We find that in the present case, the assessee has furnished sufficient documents to prove not only the identity of the loan creditors but also the creditworthiness and genuineness of these transactions. The source is also explained by the Assessee in the hands of the loan creditors because loans are given by these persons to the assessee out of refund received by those loan creditors from one Shri Satish Jindal. In the light of these facts, we are of the considered opinion that no interference is called for in the order of the Ld. CIT(A) on this issue and hence we uphold the same. This ground of the revenue is also rejected." 9. On this account also, we do not find anything wrong in the findings of th....