M/S MCS TRADING COMPANY P LTD,INDORE vs. THE ACIT CENTRAL-1, INDORE

O R D E R आदेश / आदेश / PER MANISH BORAD A.M. The above captioned appeals pertaining to the A.Y. 2013-14 and A.Y. 2014-15, filed at the instance of the Assessee, are directed against the Common Order of the Ld. Commissioner of Income Tax (Appeals)-3, Bhopal (in short ‘CIT(A)’), dated 03.09.2021, which is arising out of Assessment Order dated 30.03.2016 for A.Y. 2013-14 and Assessment Order dated 31.12.2016 for A.Y. 2014-15 (as rectified vide Order u/s. 154 dated 31.12.2016), both passed u/s. 143(3) of the Income-Tax Act, 1961 (in short, ‘the Act’) respectively by the ACIT (Central) -1, Indore and ACIT (Central), Ujjain (Camp at Indore). Grounds of appeal

for AY 2013-14 in 2.1

2. That, without prejudice to the above, on the facts and in the circumstances of the case, the learned CIT(A) grossly erred in upholding the action of the AO in determination of total income of the appellant u/s. 143(3) of the Income-Tax Act, 1961 at Rs.40,45,55,089/- as against the Returned Income of Rs.78,69,650/- thereby making huge additions of Rs.39,66,85,439/- which is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law.

3(a). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for rejecting the books of account of the appellant by invoking provisions of sub-section (3) of section 145 of the Income-Tax Act, 1961 without pin-pointing any specifically defect in the maintenance of the books of account.

(b). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO in rejecting the books of account merely for the want of address, phone number and PAN of the cash sales customers.

(c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO in rejecting the books of account of the appellant company for the instant assessment year on the ground that the books of accounts were also rejected in the earlier years without considering the material fact that each assessment year is a separate assessable unit and further without considering the material fact that for the assessment year under consideration the facts of the case of the appellant were different from the earlier years in which the books of account were rejected.

6. That, the appellant further craves leave to add, alter, omit and/or modify any of the grounds of appeal

as and when considered necessary.” 2.2 Grounds of appeal for AY 2014-15 in :

1. That, on the facts and in the circumstances of the case, the learned CIT(A) grossly erred in upholding the action of the AO in determination of total income of the appellant u/s. 143(3) of the Income-Tax Act, 1961 at Rs.35,55,48,549/- as against the Returned Income of Rs.26,88,730/- thereby making exorbitant additions of Rs.35,28,59,819/- which is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law 2(a). That, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for rejecting the books of account of the appellant by invoking Page 2 of 13 & 237/Ind/2021 Assessment Years: 2013-14 & 2014-15 M/s. MCS Trading Company Pvt. Ltd. provisions of sub-section (3) of section 145 of the Income-Tax Act, 1961 without pin- pointing any specifically defect in the maintenance of the books of account. (b). That, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO in rejecting the books of account merely for the want of address, phone number and PAN of the cash sales customers. (c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO in rejecting the books of account of the appellant company for the instant assessment year on the ground that the books of accounts were also rejected in the earlier years without considering the material fact that each assessment year is a separate assessable unit and further without considering the material fact that for the assessment year under consideration the facts of the case of the appellant were different from the earlier years in which the books of account were rejected.

3. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO in estimation of gross profit of the appellant merely on the basis of findings given by his predecessor in the Assessment Orders for earlier years without considering and appreciating the material fact that for earlier assessment years, at the second appellate stage itself, the findings of the Assessing Officers have been reversed by the Hon'ble ITAT, Indore Bench, Indore.

4. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the ad-hoc addition of Rs.35,28,59,819/- made by the AO in the appellant’s income by arbitrarily estimating gross profit on sale of Gold Bullion and Silver Bullion merely on conjectures, surmises, guess-work and whims and without considering the material fact that the appellant had maintained regular financial books of account and quantitative records in its ordinary course of business.

5. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the additions made by the AO on account of gross profits by taking the gross profit rates adopted by his predecessors without considering the material fact that under the scheme of the Income-Tax Act, 1961, each assessment year is a separate unit of assessment and merely on the basis of some exorbitant assessments made for earlier assessment years, addition cannot be made in the subsequent years as well.

as and when considered necessary.”

3. The brief facts of the case as culled out from the records are that the assessee is a Private Limited Company engaged in physical trading of Gold & Silver Bullion and forward trading in various commodities. The assessee company filed its returns of income, u/s. 139(1) of the Act, for the A.Y. 2013-14 on 29.09.2013 declaring an income of Rs.78,69,650/- and for A.Y. 2014-15 on 27.11.2014 declaring an income of Rs.26,88,730/-. The cases of the assessee for the subject two assessment years were selected for scrutiny under CASS and Notices u/s. 143(3)/142(1) of the Act were issued and duly served upon the assessee. In compliance to the notices so issued, the assessee made submissions and produced its books of account for verification before the concerning AOs. Finally, assessments for the subject two assessment years were completed after making additions of & 237/Ind/2021 Assessment Years: 2013-14 & 2014-15 M/s. MCS Trading Company Pvt. Ltd. Rs.39,66,85,439/- and Rs.35,28,59,819/- (after rectification) respectively for A.Y. 2013-14 and A.Y. 2014-15. The entire additions in both the assessment years have been made on the sole issue of low gross profit on sale of gold and silver bullion by rejecting the books of account of the assessee u/s. 145(3) of the Act.

4. Aggrieved assessee preferred separate appeals for the assessment years under consideration before Ld. CIT(A). The ld. CIT(A), vide his common Order dated 03.09.2021,dismissed both the appeals of the assessee thereby confirming the entire additions for the assessment years under consideration.

5. Now, aggrieved by the Order of the ld. CIT(A), the assessee is in appeal before this Tribunal for the assessment years under consideration.

6. As both the appeals relate to the same assessee and the issues raised are common, they were heard together and are being disposed off by this common order for sake of convenience and brevity.

7. Ground No. 1 for A.Y. 2013-14 7.1 Through this Ground raised for A.Y. 2013-14, the assessee has challenged the action of the AO in framing the assessment order u/s. 143(3) of the Act without servicing any valid notice u/s. 143(2) of the Act. Before us, the assessee has not pressed this ground and therefore, no separate adjudication is warranted. Accordingly, this ground of appeal for A.Y. 2013- 14is hereby Dismissed.

8. Ground No. 2for A.Y. 2013-14 and Ground No. 1 for A.Y. 2014-15 8.1 Through these Grounds, the assessee has challenged the additions confirmed by the ld. CIT(A) in both the assessment years under consideration. In the written submissions, the assessee company itself has submitted that it has taken separate grounds of appeal in respect of the additions confirmed by the ld. CIT(A) on different grounds and therefore, no separate adjudication is warranted. Accordingly, these grounds of appeal for A.Y. 2013-14& A.Y. 2014-15 are hereby Dismissed.

9. Ground Nos.3(a), 3(b), 3(c), 4 & 5for A.Y. 2013-14 and Ground Nos. 2(a), 2(b), 2(c), 3, 4 & 5 for A.Y. 2014-15 9.1 Through the Ground No. 3(a) for A.Y. 2013-14 and Ground No. 2(a) for A.Y. 2014-15, the assessee has challenged the action of the ld. CIT(A) in upholding the AO’s action for rejecting the books of account of the assessee by invoking the provisions of s.145(3) of the Act. Further, through the & 237/Ind/2021 Assessment Years: 2013-14 & 2014-15 M/s. MCS Trading Company Pvt. Ltd. Ground Nos. 3(b), 3(c), 4 & 5 for A.Y. 2013-14 and Ground Nos. 2(b), 2(c), 3, 4 & 5 for A.Y. 2014-15, the assessee has challenged the action of the ld. CIT(A) in confirming the additions made by the AO in the subject assessment years on account of low gross profit from sale of gold and silver bullion, merely on the basis of findings given in the Assessment Orders passed u/s. 153A/143(3) of the Act in the case of the assessee itself for earlier years. Since, the grounds of appeal taken by the assessee for both the assessment years under appeal are same, the findings given by both the assessing officers for both the years are almost same, the order of the ld. CIT(A) for both the assessment years is also same and furthermore, the submissions of the assessee before us for both the years are also same. Thus for the sake of adjudicating this common issue raised in instant appeals, we are taking A.Y. 2013-14 as lead year. 9.2 Briefly stated facts of the issue are that during the course of the assessment proceedings, the ld. AO examined the audited financial statements along with the Tax Audit Reports for the assessment years under consideration. He further referring to the records pertaining to assessments completed u/s 153A r.w.s. 143(3) of the Act for the Assessment Years 2010- 11 and 2011-12 on 28.03.2013 and assessment completed u/s. 143(3) for A.Y. 2012-13 on 25.03.2015, formed an opinion that as for the above said three assessment years viz. A.Y. 2010-11, A.Y. 2011-12 & A.Y. 2012-13, books of accounts were found defective and not reliable, same methodology should be adopted for framing assessment for A.Y. 2013-14. The Ld. AO accordingly rejected the book results and estimated the income by applying gross profit on gold bullion at Rs.4200/- per 100 gms. and that on silver bullion at Rs.1800/- per kg. which resulted into an addition of Rs. Rs.39,66,85,439/- in the assessee’s income for A.Y. 2013-14. 9.3 Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences. Before the ld. CIT(A), the assessee submitted that in respect of the earlier years which have been made the sole basis of addition in the subject assessment years, the Hon’ble ITAT, Indore Bench, has already adjudicated the issue in favour of the assessee vide its Order dated 08.12.2016 in Appeal Nos. IT(SS)A 258 & 568/Ind/2015 for A.Y. 2010-11 and A.Y. 2011-12. It was also submitted before the ld. CIT(A) that following the decision of the Hon’ble ITAT supra, the ld. CIT(A)-3, Indore vide her Order dated 28.02.2017 in Appeal No. IT-184/15-16 for A.Y. 2012-13 has also granted full relief to the assessee. However, the ld. CIT(A) by giving a finding that the assessee did not produce the books of account before the AO and the sale bills were not Page 5 of 13 & 237/Ind/2021 Assessment Years: 2013-14 & 2014-15 M/s. MCS Trading Company Pvt. Ltd. having address and PAN of the customers, confirmed the additions made by the AO on this count. The ld. CIT(A) has given the relevant findings at paras (4.2), (4.3) & (4.4) of his order which are reproduced as under: “4.2 Ground No. 2 for AY 2013-14, Ground No. 1 for AY 2014-15 and Ground No. 6 & 7 for AY 2013-14 & 2014-15: Through these grounds of appeal, the appellant has challenged the addition of Rs.39,66,85,439/- in A.Y.2013-14 and Rs.35,28,59,819/- in A.Y. 2014-15 on account of low gross profit on sale of Gold and Silver bar. The appellant during the course of assessment proceedings has been asked by the AO to produce the books of accounts. The appellant has not produced the books of accounts. The appellant produced the sales bills during the course of assessment proceedings, which has been scanned by the AO on the page no. 9 and 10 of the assessment order. The bills are not having addresses and PAN number of the customers. The identity of the customers has not been established by the sale bill. Therefore, the AO is justified in rejecting the books of accounts and estimating the profit. None of the cash bills was verifiable with respect to the customers. The sale bill in respect of RTGS credit contained the addresses of the customers. There is different rate for cash sale bill and RTGS sale bill. The genuineness of the sale bill is not established. Therefore, the correctness of books of account has not been established. The AO has arrived at the gross profit on the basis of earlier assessment years. The AO has arrived at the gross profit rate for gold at Rs.4410/- per 100grams for gold and Rs.1800/- per Kg is respect of the silver. The AO is justified in adopting the average profit rate on the basis of earlier years. Therefore, the addition made by the amounting to Rs.39,66,85,439/- in A.Y.2013-14 and Rs.35,28,59,819/- in A.Y. 2014-15 is Confirmed. Therefore, the appeal on these grounds is Dismissed.

4.3 Ground No. 3 to 5 for A.Y. 2013-14 and Ground No. 2 to 4 for AY 2014- 15:- Through these grounds of appeal, the appellant has challenged the rejection of books of accounts by the AO. The appellant during the course of assessment proceedings has been asked by the AO to produce the books of accounts. The appellant has not produced the books of accounts. The appellant produced the sales bills during the course of assessment proceedings, which has been scanned by the AO on the page no. 9 and 10 of the assessment order. The bills are not having addresses and PAN number of the customers. The identity of the customers has not been established by the sale bill. Therefore, the AO is justified in rejecting the books of accounts and estimating the profit. Therefore, these grounds of appeal is Dismissed.

4.4 Ground No. 5 for AY 2013-14:- Through this ground of appeal the appellant has challenged that the order of ITAT Indore Bench is not considered by the AO. The AO verified the sale bills for the year under consideration. The AO gathered the new facts on the basis of books of accounts account maintained during the year. The AO made the addition on the basis of new facts emerged during the year under consideration. These facts are not there in the earlier years. Therefore, this ground of appeal is Dismissed.” 9.4 Aggrieved with the additions confirmed by the ld. CIT(A), the assessee is in appeal before us. & 237/Ind/2021 Assessment Years: 2013-14 & 2014

15. M/s. MCS Trading Company Pvt. Ltd. 9.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on the issue. 9.6 Per Contra, Learned Counsel for the assessee relied on the decisions of the Co-ordinate Bench in the case of assessee for Assessment Years 2010- 11, 2011-12 & 2012-13 and further submitted that the assessee is regularly maintaining the books of accounts in the ordinary course of business of bullion trading. The assessee further submitted that it has maintained day to day stock entry in respect of each and every item of purchases as well as sales. The assessee also contended that in its case, audits under the provisions of Companies Act 1956 as well as u/s 44AB of the Income Tax Act, 1961 have been conducted and no fault have been found by the Auditors in the maintenance of such books of accounts. The ld. Counsel also stressed that the books of account were duly produced before the ld. AO for verification which has been admitted by the AO at para (14) of his Order for A.Y. 2013-14. The ld. Counsel further contended that the Ld. AO has not found any significant defect or deficiency in such books of accounts and he has merely adopted the reasoning for Assessment Year 2010-11, 2011-12 & 2012-13 taken by his predecessors for finalizing the assessment, which is uncalled for. He also contended that the Ld. AO has not raised any doubt about the correctness of the sales, purchases and day to day quantitative as well as valuation of opening and closing stock. The ld. Counsel contended that the AO has grossly erred in applying Gross Profit rates merely on the sole basis of the findings given by his predecessors without any application of mind of his own and therefore, the action of the Ld. AO deserves to be knocked down. 9.7 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, written and oral submissions made from both the sides and decision of this Tribunal in the case of the assessee for earlier years. 9.8 We find that the Ld.AO, in respect of both the assessment years under consideration, for the purpose of rejecting the books of account of the assessee as well as for the purpose of making additions in the income of the assessee, was guided by the findings made in the Assessment Orders passed in the case of the assessee for earlier years i.e. for A.Y. 2010-11, A.Y. 2011- 12 and A.Y. 2012-13. We further find that the AO, except placing his sole reliance on the assessment orders for the aforesaid assessment years, has not brought any specific finding to justify his action of rejection of books of account and the estimation of gross profit of the assessee. We observe that this Coordinate Bench, while adjudicating the appeal of the assessee for & 237/Ind/2021 Assessment Years: 2013-14 & 2014

15. M/s. MCS Trading Company Pvt. Ltd.

A.Ys. 2009-10 &A.Y. 2012-13, vide its Common Order dated 09.04.2019 in Appeal No. IT(SS)A-141/Ind/2016 for A.Y. 2009-10 and ITA-353/Ind/2017 for A.Y. 2012-13,and after considering and placing reliance on its own judgment passed in the case of assessee for A.Y. 2010-11 & A.Y. 2011-12, has knocked down the actions of the ld AO in rejecting the books of account of the assessee and making the additions by estimating gross profit . The copy of the aforesaid judgment of this Bench has been filed by the assessee in its Paper Book for A.Y. 2013-14 at page no. 107 to 136. Relevant extract from the aforesaid order is being reproduced below: “20. We have heard rival contentions and perused the records placed before us. Revenue has challenged the finding of Ld. CIT(A) holding that the Ld. AO erred in rejecting the books of accounts of the assessee u/s 145(3) of the Act and has also challenged the finding of Ld. CIT(A) deleting the addition made by Ld. AO on account of estimation of Gross Profit on sale of gold and silver bullion.

“We, respectfully, following the same, hold that in absence of any incriminating documents, there is absolutely no justification for making any estimation of g.p. in respect of Assessment Year 2010-11, for which, rejection of books of accounts has not been upheld by us. Accordingly, we hold that there was no justification in the Assessing Officer’s action as well as in the learned CIT(A)’s action in estimating g.p. on sales for the assessment year 2010-11. However, for Assessment Year 2011-12, we have upheld the rejection of books of accounts and therefore, we hold that considering the facts and circumstances of the assessee's case, it would be just and fair to estimate g.p. on sale of gold bullion and silver bullion @ 0.30% as against 0.29% shown by the assessee in its books of accounts. Thus, the ground nos. 7(a) and 7(b) of the appeal of the assessee for assessment year 2010-11 are allowed and ground nos. 6(a) & 6(b) of & 237/Ind/2021 Assessment Years: 2013-14 & 2014-15 M/s. MCS Trading Company Pvt. Ltd. the appeal of the assessee for the Assessment Year 2011-12 are partly allowed. Departmental grounds for both the years on this issue are dismissed”.

“5.1 Search and seizure action u/s 132 was conducted at the business premises of the appellant on 25.11.2010. In respect of A.Y. 2011-12 excess stock amounting to Rs. 1,73,81,169/- was found during the search and the appellant surrendered Rs. 5 Crores as additional income. The Assessing Officer rejected the books of accounts for A.Ys. 2010-11 and 2011-12 and made addition on account of G.P. 5.2 The appellant has placed reliance on the orders of the Hon’ble ITAT, Indore in the appellant’s own case for A.Ys 2010-11 and 2011-12 and in the case of Shri Omprakash Dhanwani for A.Ys 2009-10 to 2011-12. 5.3 Hon’ble ITAT, Indore in its order in IT(SS)A Nos 241 to 243/Ind/2015 and IT(SS)A Nos. 254 to 256/Ind/2015 dated 17.05.2016 in the case of Shri Omprakash Dhanwani held in paragraph 15 as under :- “15. We also find that the assessee is dealing in precious metal like gold and silver and the rates are verifiable and available in open to every customer from MCX gold reports or Sarafa Publications. Thus, the customers who purchase goods from the assessee were well aware about the prevailing market price of these metals at the relevant time. Most of the purchases are from reputed dealers. Very few documents pertaining to the assessment year 2011-12were seized which suggest that the assessee indulged in trading which was not recorded in the books of accounts. For recorded purchases, the assessee was maintaining day to day stock register with quantities and purchase vouchers. The payments were also made through banking channels. Therefore, the learned CIT(A)'s action in enhancing the turnover by 17.5% for all the years is unjustified. There was seizure of documents which suggest unaccounted sales for the Assessment Year 2011-12 and with a view to plug the loopholes, we are of the view that the enhancement in turnover by 5% on the sales recorded in the books of accounts shall be reasonable for the Assessment Year 2011-12. We accordingly direct the Assessing Officer to enhance the turnover by 5%. Further, on account of sharp fall in GP rate as disclosed by the assessee as compared to Assessment Year 2009-10, we also find it appropriate to enhance the turnover by 5% for the Assessment Year 2010-11. We direct accordingly. Since we are accepting the GP rate declared for the Assessment Year 2009-10 in the absence of any incriminating documents for the relevant period and better book results in comparison to succeeding years and no defect in books of accounts was found by the authorities below for assessment year 2009-10, therefore, we direct to accept the book results for the assessment year 2009-10. The gold prices were also increased during the relevant period. The average gold price for the period relevant to the assessment & 237/Ind/2021 Assessment Years: 2013-14 & 2014-15 M/s. MCS Trading Company Pvt. Ltd. year 2007-08 was Rs. 8.36 lacs per kg. which increased to Rs. 16.32 lacs per kg. for the period relevant to the Assessment Year 2010-11 and Rs. 20,72,000/- for the period relevant to Assessment Year 2011-12. We also observe that whenever there is tremendous increase in the price of gold, the margin of profit shrinks. Gold market is well informed marked and guided by international price. There was VAT of 1% on the recorded trading of gold. Thus, the gross profit estimated on unrecorded sales cannot be applied to the recorded sales as the margin of tax also are increased by VAT which reduces the margin of profit by the similar amount. The cumulative effect of increase in turnover and increase in gold price must have reduced the gross profit for the Assessment Years 2010-11 and 2011-12. We also find that the Additional Commissioner of the same Range in the case of Shri Nitesh Kumar Doshi for the A.Y. 2010-11 has accepted the G.P rate at 0.14% on the recorded sales and Shri Doshi was also engaged in similar business. In the case of Baldev Krishna the GP was estimated at Rs. 400/- per 120 gms. which comes to around 0.2% of the sales recorded. Similarly in the case of Vonamala Jagdishwaraiah; (2015) 44 CCH 005 GP at 0.1% has been accepted by Hyderabad Bench of ITAT and in the case of Mahandra Kumar Agrawal, (2015) Tax Publication (DT) 2124 the Jaipur Bench of the Tribunal accepted the GP of 0.1%. Further, we are of the view that on unrecorded sales estimated, the profit has to be worked out at the rate of 1.25%. Considering all these aspects we sustain the gross profit rate of 1.25% on the enhanced turnover of gold bullion for the assessment years 2010-11 and 2011-12 and on the recorded turnover disclosed in the books of accounts, we direct to apply gross profit rate of 0.25%. 5.3.1 In the case of Shri Omprakash Dhamvani the Hon’ble ITAT has accepted the GP rate declared for A.Y. 2009-10 in the absence of any incriminating document for the relevant period, better book results in comparison to succeeding years and the fact that no defect in the books of accounts was found by the Assessing Officer and CIT(A). The Hon’ble ITAT did not accept the book results for A.Y. 2010-11 on account of sharp fall in G.P. rate as compared to A.Y. 2009-10 and for A.Y. 2011- 12 due to incriminating documents seized during the search. The Hon'ble ITAT, Indore found it appropriate to enhance the turnover by 5 for AYs. 2010-11 and 2011-12 and further sustained the addition of G.P. @ 0.25% on the recorded turnover and @1.25% on the enhanced turn over for A.Ys. 2010-11 and 2011-12. 5.4 The Hon’ble ITAT, Indore in the appellant’s own case in and 258/2015 after taking into consideration the order passed in the case of Shri Omprakash Dhanwani has upheld the addition of G.P. @ 0.01% in A.Y. 2011-12 where the book results have been rejected due to incriminating documents. The Hon’ble ITAT held that in absence of any incriminating documents there is no justification for making any estimation of G.P. in respect of A.Y. 2010-11 for which the rejection of books of accounts has also not been upheld. 5.5 In appellant’s case the CIT(A) had rejected the books of accounts of the assessee for A.Y. 2010-11 by invoking the provisions of Section 145(3) by using his co-terminus powers. The AO had also rejected the books of accounts but not made any reference to Section 145(3). The CIT(A) held that the cash sales are more than 90 or total sales and as & 237/Ind/2021 Assessment Years: 2013-14 & 2014-15 M/s. MCS Trading Company Pvt. Ltd. the cash bills remain With the assessee it gives lot of scope for manipulation of rates, quantity and amount of the bills. The Hon’ble ITAT held the view that during the course of the search proceedings, not a single incriminating document or loose paper was found from which the unaccounted trading of bullion by the assessee could get established. The Hon’ble ITAT also observed that the assessee had maintained stock register and such stock register was duly produced before the Assessing Officer and the Revenue Authorities have not brought on record any single instance of any sales having been made at a rate lower than the then prevailing market rate. If the sale is not found to have been made at the rate below than tee market rate, any allegation regarding manipulation in the cash memos without any basis has no legs to stand. The Hon'ble ITAT deleted the action of the CIT(A) in enhancing the sales on adhoc basis by 20% of the sales shown in the audited accounts for A.Ys. 2010-11 and 2011-12. 5.6 The Assessing Officer has primarily rejected the books of accounts holding that the huge cash sales made are unverifiable in the absence of completed address on the sale bills. The Hon'ble ITAT has clearly held in the appellant's case that if the sale is not found to have been made at the rate below than the market rate, any allegation regarding manipulation in the cash memos cannot be accepted. The Hon’ble ITAT has also not upheld the rejection of books of accounts for A.Y. 2010-11 in the absence of any incriminating material. 5.7 In view of the facts and circumstances of the case and respectfully following the decision of Hon'ble ITAT, Indore in appellant's own case it is held that the rejection of books of accounts cannot be accepted in the absence of any incriminating evidence and merely on the observation that huge number of cash sales are unverifiable, Ground No.2 is therefore allowed. 5.8 As the rejection of books of account has not been upheld the addition of Rs. 21,56,32,991/- made on account of estimation of gross profit on sale of gold bullion and Rs. 5,41,62,993/- on account of estimation of gross profit on sale of silver bullion is deleted. Ground Nos. 3(a) and 3(b) are allowed.”

we are of the considered view that Ld. CIT(A) has correctly allowed the assessee’s appeal by holding that the book results should be accepted and that the action of the Ld. AO rejecting books of accounts and making the addition for low Gross Profit on sale of gold bar and sale of silver bar is devoid of any merit and uncalled for. We therefore find no inconsistency in the finding of Ld. CIT(A) and the same deserves to be confirmed. Accordingly Grounds 1 & 2 of the revenue’s appeal for Assessment Year 2012-13 stands dismissed.