2013 (4) TMI 518

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.... ? (C) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 24 lacs on account of undisclosed cash deposits in bank ?" 2. We have heard Mr. Varun K. Patel, learned counsel appearing for the Revenue. 3. The assessee had been engaged in the business of manufacturing and trading of educational material and office equipment like steel cupboard, chairs, tables, racks etc. and the assessee supplies the said items on rate contracts mainly to the Educational Department of the Government. 3.1 With reference to the first question, the relevant facts may be noticed. A survey was carried out under section 133A of the Income Tax Act, 1961 (for short 'the Act') on 5.3.2004. The Books of Accounts were exa....

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....1,94,913/-. It has been observed by the Appellate Commissioner that the assessee had declared gross profit of 10.27% during the year, and applying the same rate of gross profit, the profit of the appellant on the lesser stock of the CRC would work-out to Rs. 61,917/- on the basis of 10.27% gross profit to the shortfall figure of Rs. 6,02,883/-. The assessee had admitted excess stock of Rs. 14,000/- on account of steel cupboard. Accordingly, the CIT (A) restricted the addition the total of Rs. 75,916/- (Rs. 61916/- plus Rs. 14,000/). 3.4 In the impugned order, the Tribunal has upheld the order of the CIT(A) on the said issue by recording the following observations and findings : "We find that the assessee has agreed that shortfall for ....

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....ts received from ten different parties and on that basis Rs. 1,90,000/- was added to the income. 4.1 The CIT(A) upheld the addition to the extent of Rs. 75,916/- on the following reasons : "There, however, appears to be a substance in the alternative plea taken by the appellant that addition confirmed if any in the trading results should be allowed to be set off against the unaccounted income of Rs. 1,90,000/- introduced in the grab of cash deposits. In para 2.3 above, I have already upheld the addition in the trading account to the extent of Rs. 75,916/-. It would in the interest of fair play and justice if the telescoping effect of the same addition is allowed because the same income can be said to have been introduced in the books ....