Satish Chandra, J. - (1.) The brief facts of the case are that the assessee during the block period under consideration was carrying the business of manufacturing and sale of calcium carbonate in its factory located at Patni, Chikana Road, Saharanpur. On 17.3.1999, a search and seizure operation was conducted at the business premises of the assessee as well as the residential premises of its Directors. The books of account were found and seized from the office of the company at village Patni and some in premises of M/s. Thirll Hotels Pvt. Ltd.. Sri Rakesh Goyal is one of the Director of the assessee company as well as of the Hotel. On the basis of the seized material, the A.O. has made various additions which were partly allowed by the first appellate authority. Being aggrieved, the cross appeals were filed before the Tribunal, who has deleted the additions. Being aggrieved, the Department has filed the present appeal. Based upon certain observations made by the CIT(A), notice under section 148 was issued by the A.O. for the assessment year 1996 -97 for the assessment year 1999 -2000 to the company and to its Director. The said notice has been challenged by them in a writ petition. We have heard the learned counsel for the parties and gone through the material available on record. We decide the appeal as well as the writ petitions as under: - - Income Tax Appeal No. 192 of 2004: - -
(2.) THE Income Tax Appeal No. 192 of 2004 is filed by the Department against the impugned order dated 28.11.2003, passed by the Income Tax Appellate Tribunal, Delhi in IT(SS) Appeal Nos. 108 & 233(Del)/2002 for the block period 1.4.1988 to 17.3.1999. On 2.9.2009, a coordinate Bench admitted the Appeal on the following substantial questions of law: - - "1. Whether the I.T.A.T. is justified in deleting the addition of Rs. 48 lacs made by the A.O. merely on the ground that no addition can be made on the basis of diary found from the almirah of Shri Dinesh Kumar, disgruntled employee, as no addition on account of unaccounted purchase was made. The ground was taken in remand report and whether in cases where rate is being applied, it is necessary to do so? 2. Whether the I.T.A.T. is justified in deleting the addition of Rs. 48 lacs despite the fact that the assessee has not been able to prove that these papers do not belong to it and the application of G.P. Rate was based on the past record of the assessee which is the best guide for application of rate? The assessee himself surrendered an amount of Rs. 6,31,200/ - on account of income/G.P.
(3.) WHETHER the I.T.A.T. is justified in deleting the addition of Rs. 48 lacs despite the fact that the activity of sales outside the books of account is proved from the fact that the debit balance were existing in excess to the balance shown in the return of income filed by the assessee?;