DCIT-CC-4(2),MUMBAI, MUMBAI vs. NARSIRAM NATHARAMJI CHOUDHARY, MUMBAI

These fourteen cross appeals filed by the assessee and the Revenue concern assessment years 2015–16 to 2021–22. They arise from the separate orders dated 08.11.2025 passed by the Commissioner of Income Tax (Appeals)-52, Mumbai. The assessments dated 31.03.2022 for assessment years 2015–16 to 2020–21 were made under section 153A read with section 143(3) of the Income-tax Act, 1961 (“the Act”); the assessment for assessment year 2021–22 was made under section 143(3). Since the appeals arise from the same search and involve common facts, we have heard them together and dispose of them by this consolidated order. Assessment year 2015–16 is taken as the lead case.

The grounds raised by the assessee in ITA No.638/Mum/2026 for assessment year 2015–16 are reproduced below:

The grounds raised by the Revenue in ITA No.382/Mum/2026 for assessment year 2015–16 read as under:

The assessee is engaged in the business of mobile accessories under the name 3G Gold. A search was conducted on 17.03.2021 in the Rubberwala Group and connected cases, including the assessee. Statements, bank records, loose papers and digital material were collected during the search and post-search proceedings. The Assessing Officer attributed bank deposits standing in the names of two employees to out-of-books sales of the assessee and made year-wise additions. He also added alleged cash salaries and payments relating to flats and shops. Assessment year 2021–22 involves additional issues concerning cash sales, cash found, suppliers and stock. The assessee carried the assessments in appeal, and the CIT(A) granted partial relief.

In the lead year, the assessee had filed his original return on 11.02.2016 declaring total income of Rs.11,23,770. Following the search at his residence on 17.03.2021, notice under section 153A was issued on 25.10.2021. A return in response was filed on 11.01.2022. Notices under sections 143(2) and 142(1) followed, and the Assessing Officer confronted the assessee with the bank accounts, the salary workings and the papers concerning Nathani Heights. The assessment was completed on 31.03.2022.

During investigation, five accounts were identified in the names of Shri Harchandram Devaramji and Shri Hanjaram Choudhary or their proprietary concerns Sapna Enterprises, Bhagwati Enterprises, Aditya Enterprises and National Traders. The aggregate credits in these accounts for the six assessment years were worked out at Rs.70,83,37,429. The two persons stated on 17.07.2021 that they had worked with 3G Gold and that cash was deposited and withdrawn under the assessee’s instructions. The statement of the assessee was recorded on 02.08.2021; the Assessing Officer relied on it as an admission that the deposits represented sales of mobile accessories and the withdrawals were used for purchases. The assessee subsequently filed a retraction affidavit and contested the attribution of the accounts.

The Assessing Officer allocated the bank credits year-wise as Rs.21,56,89,065 for 2015–16, Rs.27,23,14,922 for 2016–17, Rs.18,59,12,316 for 2017–18, Rs.89,43,817 for 2018–19, Rs.1,68,61,666 for 2019–20 and Rs.86,15,643 for 2020–21. She nevertheless added each year’s entire turnover as unexplained money. The CIT(A) accepted the connection of the accounts with the assessee’s business but held that the whole of the deposits could not be business profit, and applied 8% to the turnover.

Loose Paper Folder 1, pages 1 to 212, recovered during the search contains employee salary workings over several years. The Assessing Officer treated the cash amounts as separate unexplained expenditure. A different loose-paper folder recovered from the assessee’s premises included page 11 relating to proposed flats numbered 5701 to 5704 in Nathani Heights. The assessment order read the totals at the foot of the sheet as cash paid to the builder. For the subsequent years, loose papers and data recovered in the Rubberwala search were also relied upon for proposed shops in Platinum Mall. The assessee disputed actual cash payment in both property transactions.

In assessment year 2021–22, the original return disclosed income of Rs.21,13,990. The Assessing Officer made additions for salary, the shop transaction, two sets of cash sales, cash found at Markvision Technology Pvt. Ltd., alleged payments to Chinese suppliers and stock 7 found in the godowns. The CIT(A) dealt with the seven years together, adopting the lead-year reasoning where applicable. He sustained 8% of each distinct sales figure and 8% of the full physical-stock value for 2021– 22, while deleting the other additions specified in the following chart.

For clarity, the following issue-wise chart sets out the additions made by the Assessing Officer and the amounts sustained by the CIT(A). Figures are in rupees.

We first take the cross appeals for assessment year 2015–16. The legal grounds raised by the assessee, including grounds 1 and 2 concerning the proceedings under section 153A and grounds 6 and 7 concerning cross-examination, were not argued before us. Accordingly, 8 these grounds are not being dealt with, and we express no opinion on their merits. We proceed to decide the substantive issues argued by the parties.

The assessee’s ground 8 and the Revenue’s ground 1 concern deposits of Rs.21,56,89,065 in assessment year 2015–16. The Assessing Officer treated the entire sum as unexplained money under section 69A. The CIT(A), relying on the Department’s own characterization of the deposits as sales of 3G Gold’s mobile accessories, restricted the addition to 8%, or Rs.1,72,55,125. The authorised representatives submitted that the receipts could not arise without purchase of goods and trading expenditure and that the regular business gross profit estimated by Ld CIT(A) is excessive . The learned CIT-DR urged restoration of the full addition, emphasizing the control exercised over the employee accounts and the lack of a complete contemporaneous account of these sales.

The existence of out-of-books sales is borne out by the accounts, statements and the very basis adopted by the Assessing Officer in his year-wise working. This does not make the entire turnover income. In CIT v. President Industries, 258 ITR 654 (Guj), the High Court approved the finding that unrecorded sale proceeds cannot in their entirety be treated as profit in the absence of a separately established outside investment. The Bombay High Court in CIT v. Hariram Bhambhani, ITA No.313 of 2013, also dealt with taxation of the profit element in unaccounted receipts. The principle applies to the identified trading turnover here. It does not preclude an addition for a distinct investment if such investment is independently proved.

The rival positions must be distinguished. The assessee contends that the bank accounts belong to other named persons and, alternatively, that any deposits attributable to him are sale proceeds on which only 9 profit is taxable. The Revenue contends that the employee names were used at the assessee’s instance and that the lack of regular sale invoices justifies addition of the deposits in full. The CIT(A)’s finding on the business character of the receipts is supported by the nature of the goods traded, the statements about application of withdrawals to purchases and the Assessing Officer’s own description of the deposits as turnover. Once the receipts are found to be sales, treating their full amount as income without allowing the cost of mobile accessories would contradict that finding.

We have also considered the Revenue’s reliance on the retraction and on the presumptions under sections 132(4A) and 292C. The retraction does not, without supporting evidence, establish that the bank records were unrelated to the assessee. Conversely, an admission that money moved through the employee accounts does not answer the separate question of the taxable profit earned from those transactions. The statutory presumptions aid examination of a seized document; they do not turn a gross sale into net income. A reasonable rate must account for purchases and the regular expenses of the activity, while recognising that the unrecorded books do not permit an exact computation.

For assessment years 2018–19, 2019–20 and 2020–21, the CIT(A) noted audited net-profit ratios of 6.75%, 10.04% and 3.82%, respectively, and an average of 6.87%. The results fluctuate. The scale and nature of the unrecorded transactions require an estimate that allows the cost of the goods and expenditure incurred to sell them. Taking the disclosed business results and the material in this case together, we fix the taxable profit at 5% of the unrecorded sales. Accordingly, in assessment year 2015–16, the Assessing Officer shall substitute 5% of Rs.21,56,89,065 for the 8% sustained by the CIT(A), subject to arithmetical rounding. The assessee’s ground 8 is partly allowed and the Revenue’s ground 1 is dismissed.

The Revenue’s ground 2 relates to Rs.13,25,995 added for cash salaries. For the cash salary issue, the search material is not disregarded. Pages 1 to 212 of Loose Paper Folder 1 identify the staff and amounts. The assessee’s statement of 28.07.2021, referred to by the CIT(A), recognised that these papers concerned salary of 3G Gold employees. The Revenue is therefore entitled to rely on the material as evidence of cash outgo. The remaining question is whether the outgo is an independent addition after the profit of the very same trading operation has been estimated. The CIT(A) answered it in the negative; the Revenue challenges that conclusion.

The salary details found during the search relate to employees engaged in the same mobile accessories trade. The authorised representatives submitted that these payments are part of the expense of earning the sales whose profit has been estimated; the learned CIT- DR relied on the seized salary workings and employee statements to seek a separate addition under section 69C. The authenticity of an expense and whether it gives rise to further taxable income are separate questions. The estimate of 5% represents profit after considering the associated trading costs. No distinct source of cash for a separate transaction has been established. We therefore uphold the deletion of the salary addition. The Revenue’s ground 2 is dismissed.

The assessee’s grounds 3 to 5 and the Revenue’s ground 3 concern the alleged cash investment in the Nathani Heights flats. The Assessing Officer added Rs.25,30,01,000 in assessment year 2015–16. The seized sheet refers to Flat Nos.5701 to 5704, containing area, agreed price, cheque and cash columns. The CIT(A) found no buyer name, booking or 11 builder ledger for Flat 5701. For Flat Nos.5702 to 5704, the cash columns total Rs.10,00,30,973; after giving credit of Rs.1,72,55,125 for estimated business income, he sustained Rs.8,27,75,848. The assessee challenges the underlying cash allegation; the Revenue seeks restoration of the addition of Rs.25,30,01,000 .

The seized Nathani sheet names a buyer, flat area, rate, total price, agreement value and a cash column. The separate writing at its lower right was read by the Assessing Officer as Rs.25,30,01,000. The CIT(A) observed that this figure does not agree with the sum of the flat-wise cash columns: even including Flat 5701, the latter sum was Rs.14,41,50,058; for Flat Nos.5702 to 5704 it was Rs.10,00,30,973. He excluded Flat 5701 because no buyer, booking or corresponding builder ledger was identified for it. The discrepancy in totals is material when the sheet is invoked as proof of actual payment.

The builder’s ledgers produced in response to the enquiry record cheque transactions corresponding to the bookings by the named purchasers. The CIT(A) considered the precise match of the recorded cheque component with the sheet to be corroboration of the entire payment structure. That match shows that the tabulation related to real booking discussions; its evidentiary reach concerning the cash column remains to be assessed separately. The sheet does not specify a date of payment against each alleged cash amount. No receipt for that cash or assertion by the alleged recipient that it received the cash from this assessee is shown in the material discussed by the lower authorities.

The authorised representatives submitted that the agreements relating to three flats were cancelled for non-payment and that the flats were thereafter sold to other purchasers at the same recorded prices. They emphasized that Nathani Parekh Constructions did not confirm 12 receipt of the alleged cash and that no dated cash payment or corresponding receipt was produced. The learned CIT-DR relied on the seized sheet, the builder’s confirmation under section 133(6) of the bookings and cheque transactions, and the statements of persons connected with the proposed purchases. In the Revenue’s submission, the exact agreement and cheque figures corroborate the cash column as well.

We note an important distinction in the ownership evidence: Flat 5702 was booked in the name of Smt. Leradevi Choudhary, Flat 5703 in the name of Smt. Surekha Vijay Mahajan, and Flat 5704 was a joint booking involving Smt. Mafaridevi and the assessee. The case therefore cannot be decided on the premise that no booking mentioned the assessee. Equally, a joint booking or matching cheque payments establish no more than the recorded transaction unless there is reliable material proving actual payment of the disputed cash by the assessee. The builder’s ledger and response corroborate the cheque side, but no admission by the builder of receipt of the alleged on-money is shown.

The fact that the assessee was a joint proposed purchaser of Flat 5704 has been weighed against his denial. It is neither ignored nor treated as an automatic answer to section 69. The explanation of cancellation and resale is a specific factual response to the suggestion that cash had been paid. If the cash component had already been discharged, the treatment of that amount on cancellation would ordinarily call for some record of refund or adjustment. None is identified. The Department’s enquiry established the booking and the cheque trail, but not a corresponding cash trail. The other two bookings stood in the names of different persons and cannot become the assessee’s personal investment merely because they are related or associated with him.

The cancellation for non-payment and the subsequent sales at the same stated prices are material circumstances against an inference that the proposed cash component was discharged. The seized sheet has no dates of alleged cash payments. The Assessing Officer’s figure of Rs.25,30,01,000 also differs considerably from the flat-wise cash columns. The first cheque paid on 30.01.2015 cannot, by itself, place every alleged cash payment in assessment year 2015–16. Although sections 132(4A) and 292C permit presumptions concerning seized documents, they do not eliminate the need to consider contrary facts and to identify the person, payment and year of an alleged investment. On the evidence as a whole, the cash investment alleged under section 69 has not been established. We delete the Rs.8,27,75,848 sustained by the CIT(A), dismiss the Revenue’s ground 3, and allow the assessee’s grounds 3 to 5.

The Revenue’s grounds 4 to 6 concern the cumulative effect of the evidence, the retraction and the statutory presumptions. We have considered the seized documents, the bank and builder records and the statements according to their relevance to each transaction. The conclusion on sales accepts the trading activity shown by that material; the conclusion on the flats turns on the absence of proof of actual cash payment notwithstanding the documented bookings. No separate addition follows from these general grounds, which are dismissed. The assessee’s lead appeal is partly allowed, while the Revenue’s lead appeal is dismissed.

We now take the appeals for the subsequent assessment years. The common issues concerning profit on unaccounted sales and cash salary expenses are governed by our decision for assessment year 2015– 16. The year-wise issues and directions are set out below; only the additional issues require separate discussion. 14

For assessment year 2016–17, in ITA Nos.639 and 383/Mum/2026, the common issues concern bank credits of Rs.27,23,14,922 and cash salary expenses of Rs.16,62,496. Following our decision for assessment year 2015–16, the profit on the identified unaccounted sales shall be restricted to 5%, and the deletion of the separate cash salary addition is upheld. The assessee’s appeal is partly allowed and the Revenue’s appeal is dismissed.

For assessment year 2017–18, in ITA Nos.640 and 384/Mum/2026, the common issues concern bank credits of Rs.18,59,12,316 and cash salary expenses of Rs.27,14,378. Following our decision for assessment year 2015–16, the Assessing Officer shall restrict the trading-profit addition to 5% of the identified turnover. The deletion of the separate salary addition is upheld. The assessee’s appeal is partly allowed and the Revenue’s appeal is dismissed.

For assessment year 2018–19, in ITA Nos.641 and 385/Mum/2026, the common issues concern bank credits of Rs.89,43,817 and cash salary expenses of Rs.32,07,430. Following our decision for assessment year 2015–16, profit shall be estimated at 5% of the identified turnover and the deletion of the separate salary addition is upheld. The additional issue concerns Rs.2,60,00,000 alleged to have been paid in cash for Platinum Mall shops. This issue is considered below along with the corresponding issue for assessment year 2019–20.

For assessment year 2019–20, in ITA Nos.642 and 386/Mum/2026, the common issues concern bank credits of Rs.1,68,61,666 and cash salary expenses of Rs.64,41,304. Following our decision for assessment year 2015–16, profit shall be restricted to 5% of the identified turnover and the deletion of the separate salary addition is upheld. The additional issue concerns Rs.2,59,73,650 alleged to have been paid for Platinum 15 Mall shops. The facts and the rival submissions on this additional issue are common to assessment years 2018–19 and 2019–20.

The CIT(A) traced the assessment to pages 172 to 176 of Loose Paper Folder 3 recovered from the assessee’s residence and an Excel workbook recovered from Shri Imran Ansari, an employee of the Rubberwala Group. The workbook contained columns for the buyer, registered owner, shop area, total consideration, agreement amount, cheque and cash received, and balances. The Assessing Officer allocated an alleged total of Rs.5,44,73,650 to assessment years 2018–19, 2019– 20 and 2021–22. Thus, the material could not simply be dismissed as an unidentified scribble. The question raised by the parties is whose payment each particular entry represents.

The ld. CIT(A), while examining the entries in the Excel workbook, compared the names of the buyers with the persons in whose names the shops were registered. He noted that additions relating to certain purchasers had been considered in their respective assessments. The issue in the present appeals is whether the material establishes that the assessee made the particular cash payments attributed to him by the Assessing Officer.

The learned Departmental Representative relied upon the seized documents and the statements recorded during the search and post- search proceedings. It was submitted that these records disclosed cash payments towards the shops and that the ld. CIT(A) was not justified in deleting the additions. The learned authorised representatives supported the order of the ld. CIT(A) and submitted that the records related to several purchasers. Only one shop was connected with the assessee, and that booking had subsequently been cancelled. They denied that the assessee had paid the cash amounts attributed to him and relied upon the documents concerning cancellation of the booking.

We have considered the rival submissions and perused the material on record. The particulars of several shops appearing in a common workbook cannot, by themselves, establish that the assessee purchased all those shops or paid the cash amounts recorded against them. The entries have to be examined with reference to the individual purchaser and the payment alleged to have been made by that person. The reference to the assessee’s business or group name does not establish that every payment in the workbook was made by him.

As regards the one shop connected with the assessee, the booking was subsequently cancelled. Cancellation alone would not conclusively disprove an earlier cash payment. However, it is a relevant circumstance to be considered with the assessee’s denial and the absence of corroborating evidence of the disputed payment. No confirmation from the alleged recipient or other independent material establishing payment of the impugned cash amounts by this assessee has been identified. On the material before us, the basis for attributing those payments to the assessee has not been established. We also note that ITAT Mumbai Bench in ITA No 3842 & 3841/Mum/2023 in Rajesh Jain and in series of judgments has deleted the addition of on money made on same documents relating to Rubberwala Group of cases

Accordingly, we find no infirmity in the deletion of Rs.2,60,00,000 for assessment year 2018–19 and Rs.2,59,73,650 for assessment year 2019–20 by the ld. CIT(A). The Revenue’s grounds concerning the Platinum Mall additions for both years are dismissed. In view of this conclusion and our findings, the assessee’s appeals for these two years are partly allowed and the Revenue’s appeals are dismissed. 17

For assessment year 2020–21, the cross appeals are ITA No.643/Mum/2026 filed by the assessee and ITA No.387/Mum/2026 filed by the Revenue. The common issues concern bank credits of Rs.86,15,643 and cash salary expenses of Rs.69,58,537. Following our decision for assessment year 2015–16, the Assessing Officer is directed to restrict the addition on account of profit from the identified unaccounted sales to 5% of the turnover. The deletion of the separate addition for cash salary expenses is upheld for the reasons recorded in the lead year. The assessee’s appeal is partly allowed and the Revenue’s appeal is dismissed.

We now take up the cross appeals for assessment year 2021–22, being ITA No.644/Mum/2026 filed by the assessee and ITA No.388/Mum/2026 filed by the Revenue. The grounds raised by the parties are reproduced below. The common issues are dealt with by following our findings for the earlier years, while the additional issues arising in this year are considered separately.

The assessee has raised the following grounds in ITA No.644/Mum/2026 for assessment year 2021–22:

The Revenue’s grounds in ITA No.388/Mum/2026 for assessment year 2021–22 are as follows:

The search conducted on 17.03.2021 falls in the previous year relevant to assessment year 2021–22. Loose Paper Folders A1 to A4 recovered from Shri Bhimaram Choudhary, an employee, contained particulars of cash sales. Images and WhatsApp material recovered from his mobile phone were relied upon for another set of sales. The Assessing Officer treated these receipts as unaccounted sales of mobile accessories and added the entire amounts. He also made additions for cash salary expenses, the Platinum Mall booking, cash found at the premises of Markvision Technology Pvt. Ltd., payments to Chinese suppliers and stock found in the godowns. The ld. CIT(A) granted relief on certain issues and restricted the additions relating to sales and stock by applying a rate of 8%. Both parties are in appeal against the respective findings.

The legal grounds raised by the assessee, namely grounds 1 to 3 and the objection to the admissibility of electronic material in ground 5, were not argued before us. We, therefore, do not examine those grounds or express any opinion on their merits. We proceed to consider the issues argued by the parties.

The assessee’s grounds 4 and 6 and the Revenue’s grounds 4 and 6 concern unaccounted sales of Rs.3,66,45,117 and Rs.2,60,95,254. The first amount was derived from the employee’s loose papers and the second from the mobile-phone images and messages. The ld. CIT(A) held that the receipts represented trading turnover and restricted the additions to 8%, amounting to Rs.29,31,609 and Rs.20,87,620, respectively. The learned authorised representatives sought restriction of 21 the profit rate, as in the earlier years. The learned Departmental Representative relied upon the seized material and sought restoration of the entire additions made by the Assessing Officer.

We have considered the rival submissions. The material relied upon by the Assessing Officer identifies the receipts as sales arising from the same mobile accessories business. The issue of taxing the profit embedded in such sales, and the appropriate rate of estimation, is covered by our decision for assessment year 2015–16. Following that decision, the Assessing Officer is directed to apply 5% to Rs.3,66,45,117 and Rs.2,60,95,254 in place of 8% sustained by the ld. CIT(A). Any duplication of the same sale demonstrated from the existing record shall be excluded so that it is not brought to tax twice. The assessee’s grounds 4 and 6 are partly allowed and the Revenue’s grounds 4 and 6 are dismissed.

The Revenue’s ground 1 concerns the deletion of cash salary expenses of Rs.53,95,259. Following our findings for assessment year 2015–16, we uphold the deletion of this separate addition, since the expenses relate to the same business whose profit has been estimated. The Revenue’s grounds 2 and 3 concern the alleged cash payment of Rs.25,00,000 for the Platinum Mall booking. This is part of the same transaction considered while adjudicating on money to Rubberwala group. Following those findings, we uphold the deletion of this addition also. The Revenue’s grounds 1 to 3 are dismissed.

The Revenue’s ground 5 concerns the deletion of Rs.33,94,000 added under section 69A on account of cash found at the business premises of Markvision Technology Pvt. Ltd. The Assessing Officer relied upon the statement of Shri Bhimaram Choudhary that the cash belonged to his “boss”. The assessee explained Rs.32,95,139 by reference to the 22 company’s cash records and the balance of Rs.98,861 by reference to the cash sales and realisations of 3G Gold. The ld. CIT(A) examined the company’s accounts and its assessment and accepted the explanation. The learned Departmental Representative relied upon the employee’s statement and questioned the explanation furnished after the search. The learned authorised representatives supported the findings of the ld. CIT(A).

We have considered the rival submissions. The description of the cash as belonging to the employee’s “boss” does not, by itself, establish that the entire cash represented unexplained money of the assessee in his individual capacity. The ld. CIT(A) found Rs.32,95,139 accounted for in the records of Markvision Technology Pvt. Ltd., and the treatment of that cash was accepted in the company’s assessment. The balance of Rs.98,861 was explained with reference to 3G Gold’s cash sales and realisations. Having regard to these findings and the taxation of the profit from the related trading receipts, no basis has been shown for treating the same cash as a separate unexplained amount in the assessee’s hands. We uphold the deletion and dismiss the Revenue’s ground 5.

The Revenue’s ground 7 concerns the deletion of Rs.98,01,469 added under section 69C for alleged cash payments to Chinese suppliers. The Assessing Officer relied upon pages 168 and 170 of Loose Paper Folder 3 and corresponding names appearing in images recovered from Shri Bhimaram Choudhary’s mobile-phone backup. In his statement dated 12.07.2021, Shri Bhimaram Choudhary identified the persons as Chinese suppliers. The ld. CIT(A) treated the payments as relating to procurement of goods for the same mobile accessories business. The learned Departmental Representative submitted that the evidence of cash payments warranted a separate addition. The learned authorised representatives submitted, in the alternative, that the purchases formed part of the cost of the sales on which profit had already been estimated.

We have considered the rival submissions. The material relied upon identifies the payments as purchases from suppliers of goods dealt in by the assessee. The addition has not been shown to relate to expenditure outside the trading activity whose profit has been estimated. Once the profit from that activity is determined by allowing for the cost of goods and the related business expenses, a separate addition for the same purchase expenditure would duplicate the amount brought to tax. On the facts of this case, we accept the assessee’s alternative submission and uphold the deletion of Rs.98,01,469. The Revenue’s ground 7 is dismissed.

The assessee’s grounds 7 and 8 and the Revenue’s ground 8 relate to the addition for stock. The physical stock was valued at Rs.2,67,91,400 by applying the estimated item-wise rates subsequently furnished by the assessee. The book stock aggregated to Rs.2,50,17,076, comprising Rs.1,13,47,836 in 3G Gold and Rs.1,36,69,240 in Markvision Technology Pvt. Ltd. The difference between the physical-stock valuation and the aggregate book value was thus Rs.17,74,324. The Assessing Officer added the entire physical-stock value, whereas the ld. CIT(A) sustained 8% of that value, amounting to Rs.21,43,312.

The learned authorised representatives submitted that the difference arose from the approximate rates used for valuation. The personnel present at the godowns could not furnish reliable purchase rates at the time of search, and the assessee was then in DRI custody. In his statement dated 28.07.2021, the assessee supplied approximate item-wise rates on the basis of which the physical stock was valued. The book-stock working furnished on 08.06.2021 reflected the value as at 24 16.03.2021. The learned Departmental Representative supported the assessment order and submitted that the subsequent working did not satisfactorily explain the stock found during search.

We have considered the rival submissions. The aggregate book stock of Rs.2,50,17,076, belonging partly to 3G Gold and partly to Markvision Technology Pvt. Ltd., cannot be treated afresh as unexplained investment of the assessee. Accordingly, neither addition of the entire physical-stock value nor estimation of profit on that entire value is justified. The amount remaining for consideration is the valuation difference of Rs.17,74,324. Having regard to the approximate rates adopted and the unaccounted trading activity, we restrict the addition to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the ld. CIT(A). If the existing record demonstrates that the same profit element has already been included in the estimation on sales, the corresponding duplication shall be excluded while giving effect to this order. The assessee’s grounds 7 and 8 are partly allowed and the Revenue’s ground 8 is dismissed.

The Revenue’s grounds 9 and 10 concern the absence of a remand report and the cumulative effect of the evidence. The findings on the individual issues above take into account the seized material, the assessment and appellate orders and the rival submissions. No specific additional document relied upon in violation of the applicable procedure has been identified for our consideration. These grounds do not establish a separate basis for interference with the relief granted by the ld. CIT(A). Accordingly, grounds 9 and 10 are dismissed. The general ground reserving the assessee’s right to amend the grounds requires no separate decision.

The Assessing Officer shall give effect to the findings recorded for each assessment year. Profit on the identified unaccounted sales shall be computed at 5% on the respective turnover figures, subject to exclusion of any duplication established from the existing record. The separate cash-expense and property additions shall be dealt with in accordance with our issue-wise findings. For assessment year 2021–22, the stock addition is restricted to Rs.88,716, subject to the limited adjustment specified in paragraph 54 above. Consequential computation of interest shall follow in accordance with law.

In the result, the assessee’s appeals for assessment years 2015– 16 to 2021–22 are partly allowed in the terms indicated above, and the Revenue’s appeals for those assessment years are dismissed.