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TMI Blog2002 (1) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... rtners namely Shri G. Ramaiah Reddy and two HUFs with Kartas Raghava Reddy (S/o G. Ramaiah Reddy) and Dasarath (S/o G. Ramaiah Reddy). It is engaged in the manufacture and sale of bricks. 4. There is another firm by the name M/s. Anjaneya Table Mould Bricks ("ATMB" for short) which is also engaged in the same line of business i.e. manufacture and sale of bricks. The partners in this firm are, namely, Smt. Rathnamma (wife of Ramaiah Reddy), Smt H. Varalakshmi (wife of Raghava Reddy), and Smt. R. Asha (wife of R. Dasarath). On 2nd June, 1992, search operation under s. 132 of the IT Act, 1961 (hereinafter referred to as "the Act") was carried out in the case of M/s. Anjaneya Brick Works. During the course of search, several incrimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hearing the rival submissions regarding this appeal we come to the conclusion that the appellant has a good case on merits. In the assessment order dt. 31st March, 1994 for asst. yr. 1991-92, in the case of the appellant M/s. Anjaneya Brick Works, an estimation of production had been made relying on the seized document marked "A-19" which relates to asst. yr. 1992-93 and not the accounting year under consideration. The assessee/appellant's plea is that in the absence of any incriminating document, its accounts as per the returned income should have been accepted. The AO calculated the suppressed production as follows: Opening stock Nil Production for 52 weeks at 90,000 bricks per week 46,80,000 Less : 35 per cent for wastage, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en both the businesses are related to one family, it is immaterial in which of the kiln, irrespective of the fact whether it is having more or less chambers, the work was got done. When two views are possible, the one which is in favour of the assessee/appellant is to be given effect to. We accept this plea of the appellant. 6. The next issue relates to the estimation done by the Department regarding unaccounted production, applying the rule of uniformity of production for the entire year comprising of 52 weeks. This estimation has been done only on the basis of evidence of suppression in production of bricks found in the case of 'sister concern' M/s. Anjaneya Table Mould Bricks, which is admittedly different firm with different constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they come to the place of work along with their bag and baggages and go back to perform other important activities of their life including marriages, etc., of their grown-ups. So the rule of uniformity cannot be and should not be applied on the estimate basis. We concede that there can be time and times when the uniformity can be maintained but for that case there should be some direct evidence available in a given case. Likewise the estimation done by the Department so far as the gross profit is concerned that also seems to be unreasonable in the absence of the comparable cases and in the presence of the admitted GP for the asst. yrs. 1990-91, 1991-92 which are stated to have been accepted by the Department at 29 per cent and 22 per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry and March 1991 outside the books, as there was no demand and there was stock on hand. (ii) The learned AO estimated the unaccounted production for February and March 1991 at 7,39,200 bricks and fixed the annual unaccounted production at 52,79,940 bricks. Finally he determined the unaccounted production at 14,51,966 bricks after taking into consideration the usual wastage etc., and fixed its sale price at 0.80 paise per brick and arrived at a turnover of Rs. 11,61,573. He estimated the GP at 64 per cent. (iii) The learned AO accepted the regular books of account containing the disclosed turnover of Rs. 15,94,265 on sale of 19 lakhs bricks with a capital of Rs.3 lakhs. But confirmed for unaccounted production and sale of 11,61,573 bric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but after considering the reasonable explanation of the assessee the unaccounted production thus should be recomputed in the light of our above observation in this case. (vi) So far as gross profit estimate is concerned, it cannot be 64 per cent in the absence of comparable cases. When the declared GP as per the regular books on the disclosed turnover of Rs. 15,94,265 has been only 25 per cent and the same has been accepted we hold that GP of 25 per cent should be adopted on the unaccounted sale. We find support from the order of the Tribunal in Gupta Bros. vs. Asstt. CIT (1997) 93 Taxman 218 (Gau). (vii) So far as the IT Appeal Nos. 262 and 263 relating to asst. yr. 1992-93 are concerned, the issues are almost identical as have been d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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