ITO-19(2)(4), MUMBAI vs. PATDIAM JEWELS, MUMBAI

Per : Narender Kumar Choudhry, Judicial Member:

This appeal has been preferred by the Revenue Department against the order dated 22.10.2024, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short “Ld. Commissioner”) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2018-19.

2. In the instant case, the case of the Assessee was selected for complete scrutiny on the following issue: “Exemption for undertaking in FTZ/SEZ (section 10A & 10AA)”.

2.1 Consequently, statutory notice u/s 142(1) of the Act was issued to the Assessee, in response to which the Assessee furnished copy of financial statements for the year under consideration, on perusing the same, it was observed by the Assessing Officer (AO) that the Assessee is engaged in the business of manufacturing of diamond studded gold jewellery, diamonds and exporting the same from Unit No. 702, Tower 1, Seepz, Andheri East, Mumbai and has claimed exemption u/s 10AA of the Act. The Assessee has also filed a letter of approval dated 07.08.2018 issued by the Department, Commissioner, SEEPZ-SEZ and copy of certificate issued by the Assistant Commissioner dated 12.07.2010 confirming the commencement of production activities w.e.f. 15.06.2010. This A.Y. is 7th year of its business and therefore the Assessee has claimed the deduction u/s 10AA of the Act being eligible for 50% deduction of such eligible profits and gains.

2.2 On perusing the reply, audit report etc. furnished by the Assessee during the course of assessment proceedings, certain discrepancies were noticed by the AO. Accordingly, the AO vide notice dated 18.02.2021 sought certain clarification/explanation/ justification as mentioned in para no.3 of the assessment order.

2.3 The Assessee, in response to the said show cause notice furnished its reply on dated 23.02.2021 which was looked into and considered by the AO. The relevant portion of the reply is reproduced herein below:

“1. The main nature of business of the firm continues to be & consists of Export out of India of Studded (diamonds and precious stones) Gold Jewellery from its undertaking situated at Unit No. 702, Tower 1, Seepz++, Andheri (E), Mumbai 400096.

2. There are no Domestic Sales of any item during the year except permitted Inter unit transfers of goods & stock within SEZ limit.

4. Schedule I of sales forming part of Profit & loss account shows the sale figure as under:

Export of Jewellery 17,72,77,591 Add: Exchange difference gain 19,77,169 Total 17,92,54,760 Exchange difference gain forms part of Turnover & accordingly, in form 3CD, the said figure of Rs 17,92,54,760/- is adopted to arrive at accounting ratios like, GP ratio, NP ratio and Stock in Trade to Turnover ratio to reflect correct presentation even though it reduces the % (as denominator is higher).

1. Above quantities may please be treated as under one broad head of sale of finished goods ite Jewellery. Financial records make this very clear.

2. As already stated there are no domestic sale within India of loose diamonds or gold, etc, except permitted inter unit transfer within SEZ limit.

1. Schedule K to P&L account gives working of raw materials consumed at actual cost Incurred figures of various raw materials (including polished diamonds) and are summarized as under:

ITEM RS. Opening Stock 01.04.2017 4,60,58,871 Add: Import from out of India 5,51,20,742 Add: Local Purchases. 10,13,89,706 Add: Inter Unit Purchase 84,50,599

21,10,19,918 Less: Inter Unit Transfers 22,53,294

20,87,66,624 Less: Closing Stock on 31.03.2018 6,40,08,768 Total cost of Raw material Consumed 14,47,57,856 The above figures are actual cost of material consumed and no figure is on estimates or at probable international rate more particularly of gold as envisaged.

The above actual figures alone have been applied for working out accounting ratio of material consumed to finished goods against Clause 40 of form 3CD.

Chart Giving quantities as well as respective values for opening stock, purchases, consumption, sale & closing stock embodying all Items in form 3CD also explain this fact & figure of Rs 14,47,57,856/-, The figure of Diamond consumed is not a derived balancing figure of Rs 9,28,96,762/-, but actual figure of Rs.9,39,28,936/- included In Rs.14,47,57,856/-.

As stated above material consumed does not consist only of diamond and gold findings but also gold, silver, alloys etc & figures also take account of inter unit transfers.

3. The aforesaid reply of the Assessee was considered and looked into with regard to the details/explanation furnished by the Assessee, however, the same was not found satisfactory by the AO for the following reasons:

“(i) The Assessee's business, as per above reply is "Export out of India of studded (Diamonds and Precious Stones) Gold Jewellery from its undertaking situated at Unit No.702, Tower-1, SEEPZ++, Andheri (E) Mumbai (ii) There are no Finished Goods corresponding to the description 18, 14 or 10 Carat Gold Jewellry studded with Diamonds cr precious stones.

The Assessee's explanation is- Cost of Raw Material Consumed 14,47,57,856 Add Manufacturing expenses 54,37,392 Finished Goods 15,01,95,248 Less: Actual Cost of Gold Consumed 31,15,477 Gold Finding 24 KT 853 gms 4,76,44,200 Gold 24 KTS net 16084.39 gms 5,07,59,677 The difference of finished goods less Gold 24 KT consumed is 9,94,35,571 which is the cost of Diamond consumed- However, the Caratage is not apparent.

The Audit Report does not state the amount of finished Diamonds purchased or Import, issued for consumption, received as Jewellry finished goods and any description of sale of finished goods as "Gold Jewellery Studded with Diamonds and Precious Stones".

Thus, Actual consumption of Diamonds is not discernible.

(iii) Further, Gold Findings of 853 gms at 31,15,477 would imply 24 KT Gold Rate at 36,52,376 whereas 24 Carat Gold is 31000 per 10 gm or 31,00,000 per Kg. Thus, the cost is in excess, not reconciled. (iv) From the Details submitted,

Locally purchased Diamonds from a related entity Patdiam Jewellery Ltd. 7,52,30,297 Imported Diamonds 3,70,61,601 11,22,91,896 The reconciliation, submitted by Assessee, Value of Diamond consumed, difference of 14,47,57,856 and Gold- 5,07,59,677- is 9,94,35,571 (As per details)

Thus, apparently, difference in Diamond consumed at Rs.11,22,91,896 and as per reconciliation value of Diamond consumed is Rs.9,985,571/- comes to Rs. 1,28,56,325/-.

Thus, Audit-Report does not report Diamond consumption nor sales of Gold Jewellery studded with Diamond and Precious Stones.

(v) Unlike Import bills from Jewellery Television, with precise dissention of Gold content, Diamond content, Caratage, the Assessee, in its sale invoices and shipping bills submitted, does not provide the Gold dissention and the Diamond dissention in the "Gold Jewellery studded with Diamonds" exported.

Thus, it is not possible to discern, from the sale invoices, a ratio of- Rs.5,07,59,677 - Gold consumed : Diamond Consumed at 9,94,35,571 1 : 1.95 The Diamond value is tense the value of Gold. (vi) The Diamond purchases, as per Form 3CD- Finished Goods is -Polished Diamonds Carats Purchases- 11,233 Carats Whereas as per details submitted of local and Imported Diamonds consumed-(4645.96-271.83) and (8695.06-1877 Carats) is 11,172.19.

Thus, difference = 11,233-11,172.19= 60.81 Carats Thus, even the Diamond consued as per details does not tally with Form 3CD figures.

Thus, consumption figures are not reconciled.

(vii) Further, the Assessee has not replied to the Query of reconciliation of Turnover at Rs. 17,72,77,591/- with PCFC credit availed at Rs.24,47,26,907/- and Post shipment credit awaited without PCFC credits, Thus, figures of turnover are not reconciled with the extant of packing credit availed (export orders and credit on executed orders) which are in excess of Rs.25 Crores.

The Assessee seeks to explain difference in caratage at 60.8 Carats by way of Import of Diamond suited jewellery from "Jewellery Television at 0.5 Kg (10 Carat Gold) import valued at USD 3900 i.e. 2,94,917 because of "Scrap-Diamonds" and "Further sale of Diamond scrap at 128.83 Carats as sold to Jewellery Television- Details might not have been submitted earlier but duly accounted in quantity and value".

(viii) Thus, difference in caratage is sought to be explained by Import of 0.5 Kg (with Scrap Diamonds) and sale of (Scrap Diamond- studded jewellery) both to Starlight Jewellery- (whereas, apparently import of scrap Diamonds is for remarking and polishing) which does not explain sale of scrap Diamonds at 128.83 Carats.

(x1) Further, the import bills, are 10,14,18 Carat Gold Earrings, Rings, No. of pieces with description of Gold and Diamond and Export of similar items to the said party is 584.34 gms +91.58 gm + 96 gms + 73.51 gms + 41.24 gms + 39.37gms + 0.5 gms.

This weight of Gold and caratage of Diamond and further sales of such jewellery back to the same party further obfuscates the consumption and stock figures. There do not figure in stock-Form 3CD report.

In respect of Gold studded jewellery with scrap Diamonds imported from Jewellery Television and sold back to jewellery television.

The said scrap- Diamond and used jewellery- vide invoice 820-02 From Jewellery Television to Patdiam Jewels.

Style Invoice Rejected-Goods Diamond Weight RP-14986 PJ/SEZ/820-02 10 KT Col Qty 68.98 gms 22.68

Y 15 Dea Pcs Unit Price Total Price RD-1035 4260 3,900 BUG-420 The price of "Rejected-Goods" count be "Scrap" but the sale price.

Even the bill of entity terms the 15 pieces as "Rejected-Goods".

DETAILS OF REMAKING OF DIAMONDS & USED FOR EXPORT OF JEWELLERY PARTY B.E. INV. QTY IN AMT. IN RS. DIAMOND USED FOR EXPORT AMT IN RS. NO NO DATE CTS DATE INV.NO. TOT AMT AL US$ CTS Opening 272.75 Stock 2017 JEWEL 9322 820- 22.68 1,44,292.00 09/02/2018 0132/09.02. 128. 16,103. 10,68,483.8 ERY 02 2018 83 75 TELEVI SION 18/04 /2017 JEWEL 13349 826. 9.33 92,700.28 ERY 05 TELEVI SION 08/06 /2017 JEWEL 10160 133 4.37 43,626.39 ERY 66 TELEVI SION 10/07 /2017 JEWEL 10042 826 24.96 2,18,647.61 ERY 98 TELEVI SION 27/08 /2018

334.09 4,99,266.29 128. 10,68,483.8 83 From this table, the figure of 64 Carat Diamond scrap is not borne nor is the figure of 272.75 carats of opening stock reflected in Audit port Form 3CD.

(x) Further, Export bill no. PJ/SEZ/0132-02/17-18 dated 09.02.2018 to Jewelery Television.

10 KT jewellery studded with Diamonds.

Purchase order Amount Earrings 10 Carat Y 100657837 Docn 360 Pan 100 21100 10 Carat Y 100657857 Docn 361 Pan 75 15735 And value addition sheet for the said invoice is- Design No. Colour Pcs. Gross Weight Net Weight EP-00865 Earrings White 100 EP-01219 75 175 584.35 542.73 Metal in gms Metal rate Diamonds Round BUGYS Metal Value 569.87 17.01 104.25 Carats 43.85 4000.05 5695.14 Diamond Value Value Addition Value Addition Invoice 16103.75 996.20 996.20 6975.76 6975.76 2704.10 36475.00 USD 3701.11 This is not "Scrap Diamond Sale". Thus, these are not scrap sales, Diamond consumed is not scrap Diamonds.

Thus, the scrap diamonds- is not scrap diamond imports but rejected goods.

(xi) Thus, quantitatively stock not reconciled- 129 Carats- details of 10 Carat, 14 Carat and 18 Carat sale not provided.

Value of Diamond not reconciled Rs. 1,28,56,325/-

4. From the aforesaid reasons, it was construed by the AO that the amount of Rs.1,28,56,325/- as undisclosed investment u/s 69 of the Act not amenable to link it to a particular service and thus he taxed the said amount u/s 115BBE of the Act by observing and holding as under:

Thus, amount of diamond consumed as per details in excess of that reported and discernible from Form 3CD reports. The source of Excess Diamond worth Rs.1,28,56,325/- remained unexplained. Therefore, same is added as undisclosed investment u/s 69 not amenable to linkage to a particular service. Since addition is being made to the income of the Assessee u/s 69 of the I.T. Act, 1961 for the year under consideration, tax shall be charged by applying the provisions of section 115BBE of I.T. Act, 1961. Penalty proceedings U/s 271AAC of the I.T. Act for mis-reporting of income is being initiated for separate consideration.

Addition: Rs.1,28,56,325/-“

5. The AO also made the addition of Rs.35,85,095/- being 2% of the total turnover of Rs.17,92,54,760/- and added the same to the income of the Assessee by observing and holding as under:

“8. Further, in view of the Rejected stocks, Gold and Diamond stock not realized, and huge purchases from related entities, the book results are rejected and a 2% N.P. addition is made to the results as disclosed in the P&L account. (The A.O. is not required to evidence for the exact rate of profit, or quantify the exact suppression, as long as the rate is not perverse). As per the details furnished in Form 3CD, the Assessee has shown N.P. rate at 3.52% and disclosed net profit of Rs.39,86,198/- on total turnover of Rs. 17,92,54,760/-, In view of the discussion made supra, since book results are rejected, addition of Rs.35,85,095/- which is 2% of total turnover of Rs.17,92,54,760/- is being made to the total income.

Addition: Rs.35,85,095/- In view of the above income of the Assessee is computed as under:-

A. Profit & Gains of Business or Profession as shown in Computation of Income Rs.75,69,997 Add.: 1. Addition made on account of unexplained closing stock as discussed above Rs.1,28,56,325

1. Addition made on account of enhanced N.P. as discussed above Rs.35,69,997 Rs.1,64,26,322 Rs.2,39,96,319 B. Income from Other Sources as per Computation of Income Rs.27,058

Gross Total Income Rs.2,40,23,377 Less: Deduction u/s 10AA of the Act Rs.1,19,37,947 Total Income Rs. 1,20,85,430 In view of the above, assessment is completed at total income of Rs.1,20,85,430/- u/s. 143(3) of the Income tax Act, 1961. Charge tax on income of Rs.56,97,122/-a per normal provisions of the I.T. Act, 1961 and charge tax on addition of Rs.63,88,308/- (amount remained after allowing eligible deduction u/s 10AA @ 50%) as per provisions of section 115BBE of the Act as the addition has been made u/s 69 of the Act. Charge interest u/s 234B & 234C of the I.T. Act, 1961 as per rule. Issue penalty notice u/s 271AAC of the Income Tax Act, 1961 as discussed above for separate consideration. Issue notice of demand and challan.”

6. The Assessee, being aggrieved, challenged the said additions before the Ld. Commissioner and has claimed as under:

That the assessment proceedings were carried out during Covid-19 period and therefore the Assessee had sought reasonable time from the AO for making the submissions, however, the AO without offering any opportunity and ignoring the request for time made well before the date fixed and without considering the earlier explanation, passed the final assessment order. The AO misunderstood sales figure with purchase and consumption figures of diamonds. The AO determined the amount of deduction u/s 10AA of the Act @ Rs.1,19,37,947/- but in the computation, the same was not deducted from business income/GTI while calculating tax and interest under various sections. The AO also failed to consider the explanation with evidences filed in respect of the alleged discrepancies in stock quantities and valuation which were fully reconciled and not different remains. The AO further erred in making lump sum addition u/s 69 and wrongly taxed income of Rs.35,69,997/- u/s 115BBE of the Act without any basis on the facts and in law. The AO has given reliance to exemption and it has recorded the factual and legal submissions on various aspects of manufacturing of jewellery for export from SEZ unit regulated by the government authorities 6.1 The Assessee before the Ld. Commissioner has also claimed that it has duly submitted the details of purchase of gold, diamond studded jewellery and diamond etc. in the forms as described below:

“1. Purchase register with sample bills on 25th December, 2020 (Annexure -1).

3. Details of Import and Remaking of Diamond Purchase on 25th December, 2020 (Annexure-3).

7. Details of Item wise Raw Materials Consumed on 23rd February, 2021 (Annexure - 7).

11. Reconciliation of Sales Carats on 23rd February, 2021 (Annexure-11). 12. Sample bills for purchase on 25th December, 2020 (Annexure- 12A-12B). 13. Sample bills of import 25th December, 2020 (Annexure -13 to 13-D)”

6.2 The Assessee also filed quantitative details which are reproduced as below:

Sr. Item Unit of Opening Purchase consump Sale Closing [Shorta No. Name Stock stock measur during the tion during ge) / ement Previous during the excess year (if any) the Previou s year previous year 1 SILVE Grams 2,991.00 3,500.00 2,636.00 10,000 2,723. 132.00 R .00 00 2 Precio Carat 214.00 - 7.00 - 207.00 - us Stone 3 Gold Grams 360.00 1,087.00 853.00 25.00 569.00 Findin gs(24 KT) 4 Gold Grams 5,934.00 16,889.00 16,084.0 800.00 5,110. 829.00 24KTS 0 00 5 SILVE Grams 884,00 147.00 165.00 - 866.00 - R Findin gs 24KT 6 CZ Carat 192.00 - 12.00 - 180.00 - The appellant also contested that the Ld. AO has taken incorrect value to compute the value of gold consumed and Ld. AO has assumed the difference between gold price arrived by it and the total material consumed by the appellant as value of Diamonds consumed by the appellant. Which is incorrect because the appellant has also consumed other metal like Silver and other precious stones and CZ.

The appellant stated that above contention is observed from Assessment order Page No. 3 Point No. 1, wherein the Ld. AO has assumed the purchase cost of Gold at the rate of Rs.2,800/- per gm which is based on International rate. Whereas the appellant has purchased gold at different rate instead of flat rate of Rs.2,800/- per gram.

6.3 The Assessee also filed a summary of Actual consumption which read as under:

Actual consumption as per books of account (Raw material plus Finished Goods) - As appearing in tax audit report also Partic Opening Stock Purchase Consumption+ Sales+ Closing Stock** ulars Value Recovery shortage Qty Value Qty Value Qty Value Qty Value Qty Value Gold 5934.29 15456559 16889.44 45593717 17084.39 47644200800.00+829.229106912 5110.06 11299164 2422.37 28583966 11232.73 115323160 9251.69 93928936 4403.41 49978490 Diam onds Gold 359.921 1337963 1086.636 3919386 852.817 3115477 24.554 78076 569.19 2063796 Findin gs Silver 2991.11 125231 3500 141467 2635.890 118602 1000+131,800 36200 2723.42 111896 Silver 883.97 231822 146.68 53685 164.97 42400 865.68 243107 Findin gs Precio 214.44 311595 6.86 9968 207.58 301627 us Stone CZ 192.070 11735 12.24 748 179,83 10987 Total 46058871 165031415 144860331 2221188 64008767 *The Opening and closing stock appearing in above chart also matches with numbers appearing in audited financial statements.

The appellant filed following reconciliation matching with its books of account and numbers mentioned in the tax audit report.

RECONCILATION OF SALE OF DIAMONDS IN STUDDED JEWELLERY PARTICULARS CARATS REMARK SALE OUT OF LOCAL 5170.01 DETAIL FILED with AO PURCHASE SALE OUT OF IMPORT 3,952.85 DETAIL FILED with AO DIAMOND SCRAP 128.83 SOLD TO M/S JEWELLERY TELEVISION GRAND TOTAL OF CONSUMPTION 9,251.69 In view of the above, the total consumption of diamonds duly matches with numbers mentioned in the tax audit report and audited financial statements.

The appellant also filed reconciliation of purchase of goods matching with tax audit report and audited financial statements

RECONCIATION FOR PURCHASE OF GOLD 16,889 GMS NATURE GMS. RUPEES LOCAL 13000.00 35,469,843 11000 MMTC & 2000 PNB INTER UNIT 800.00 2,057,004 PATDIAM JEWELLERY LIMITED IMPORT 3000.00 7,900,920 M/S STARLIGHT JEWLLERY SCRAP 89.43 165,950 M/S JEWELLERY TELEVISION

16889.43 45,593,717 6.4 The Assessee before the Ld. Commissioner also contested that Each and Every item of purchase until and unless is verified and authorized by the Custom Authorities then only the Entry of goods is possible particularly precious items like Gold, Diamonds, Precious Stone, Silver etc. There is 100% exports of Jewellery made by the Appellant and Each and Every exports is checked and verified by the Custom authority. Thus, question of any unaccounted stock does not arise.

6.5 The Ld. Commissioner by considering aforesaid claim, submissions and documents of the Assessee ultimately deleted the addition of Rs.1,28,56.325/- by observing and holding under:

In view of the above, I am of the considerate opinion that the appellant has filed all the requisite details to substantiate the total stock of diamonds appearing in its tax audit report and has also filed supporting documentary evidences of purchasing the same. The appellant has also demonstrated that correctness of gold and gold jewellery with requisite reconciliation and purchase invoice. The Ld. AO has estimated the purchase price of Gold with assumption of flat Rate of Rs.2,800/- and has very ambiguously worked out the addition amount on account of diamond consumption. While carrying out addition on account of diamond, the Ld. AO has worked out ratio of gold consumption vs diamond consumption. The Ld. AO has assumed that gold: diamond consumption is in ration of 1:1.95 which is based on one sales invoice filed by the appellant. Whereas the appellant has maintained actual record of diamond consumed which is discussed above along with reconciliation and the same was also filed by the appellant.

Overall, the addition carried out by the Ld. AO is found to be based on assumptions. Moreover, the Ld. AO has not given any finding on the records filed by the appellant per se. The Ld. AO has not considered the same but has proceeded to complete assessment merely based on assumption.

On the contrary the appellant has clearly demonstrated that all diamond weight is being accounted in books of accounts and records are matching with audited books, consumption details. Therefore, the addition of Rs.1,28,56.325/- is found to be incorrect and being deleted.

Accordingly, Ground 4 of the appeal is allowed.”

7. We observe that the Ld. Commissioner deleted the addition of Rs.1,28,56,325/- by holding the same as incorrect on the basis of the aforesaid details and the claim of the Assessee, specific to the following effect:

That each and every item of purchase is authorized and verified by the Customs Authorities then only the entry of goods is possible particularly the precious items like gold, diamonds, precious stones, silver etc. Further, there is 100% exports of jewellery made by the Assessee and each and every export is checked and verified by the customs authority. Thus question of any unaccounted stock does not arise. The Assessee has filed all the requisite details to substantiate the total stock of diamonds appearing in its tax audit report and also filed supporting documentary evidences of purchasing the same. The Assessee has also demonstrated that correctness of gold and gold jewellery with requisite reconciliation and purchase invoice. The AO has estimated the purchase price of gold with assumption of flat rate of Rs.2800/- and has very ambiguously worked out the addition amount on account of diamond consumption. While carrying out addition on account of diamond the AO has worked out ratio of gold consumption vs. diamond consumption. The AO has also assumed that “gold consumption is in ratio of “1$” 1:1.95 which is based on one invoice filed by the Assessee. Whereas the Assessee has maintained actual record of diamond consumed which is discussed above along with reconciliation and the same was also filed by the Assessee. The addition of Rs.1,28,56,325/- made by the AO is based on assumption as the AO has not given any finding on the records filed by the Assessee and has not considered the same but has proceeded to complete the assessment merely based on the assumption. On the contrary, the Assessee has clearly demonstrated that a diamond weight is being accounted in books and records are matching with audited books and consumption details. Therefore, the addition of Rs.1,28,56,325/- is found to be incorrect and being deleted”.

9. We have given thoughtful consideration to the determination made by the Authorities below on the addition of Rs. Rs.1,28,56.325/- and peculiar facts and circumstances of the case and rival contentions raised by the parties. Admittedly, the Ld. Commissioner not only considered the relevant reconciliation, details and documents submitted by the Assessee but also the findings of the AO in making the addition. The Ld. Commissioner has specifically dealt with the fact that the Assessee exports 100% of jewellery made by it and each and every item is to be verified by the Customs Authorities. The Ld. Commissioner also analyzed the total stock of diamonds appearing with tax audit report and the supporting documentary evidences purchasing the same and correctness of gold and gold jewellery with requisite reconciliation and purchase invoices. The Ld. Commissioner by considering the aforesaid facts and circumstances and the documents in totality, deleted the aforesaid addition of Rs.1,28,56,325/- which in our considered opinion has correctly been deleted. Thus, the decision of the Ld. Commissioner in deleting the aforesaid addition, does not require any interference.

10. Coming to the addition of Rs.35,85,095/- made by the AO @ 2% of turnover of Rs.17,92,54,760/- as appearing in the tax audit report, the Assessee before the Ld. Commissioner has claimed as under:

That majority of its sale is export sales and the Assessee is claiming deduction u/s 10AA of the Act, thus all sale and purchase of goods are subjected to close scrutiny of Customs Authorities. Therefore, the books maintained by the Assessee cannot be rejected. Further, the Assessee has already offered profit @ 3.52% which is much higher than the profit estimated by the AO

As the decision of the Ld. Commissioner is based on the logical reasoning and peculiar facts and circumstances of the case and documents available on record and thus, in our considered opinion, the same does not require any interference. Consequently, the decision of the Ld. Commissioner in deleting the aforesaid addition is upheld.

Order pronounced in the open court on 18.07.2025.