Hemant Gupta, J. - (1.) THE assessee is in appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') arising out of an order passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short 'the Tribunal') dated 29.04.2009. The assessee has claimed the following substantial questions of law: (i) Whether on the facts and in law, the learned ITAT is legally justified to hold that the addition on account of profits on extrapolated sales be restricted to the unaccounted 17 sales bills amounting to Rs. 1,11,99,427/ - by applying GP rate of 10.35%? (ii) Whether on the facts and in law, the learned ITAT is legally justified in directing the addition of Rs. 20 lacs on account of unexplained investment made towards working capital?
(2.) THE Assessing Officer in its order dated 28.12.2007 (Annexure A -1) has found that the assessee has concealed the particulars of its income of Rs. 21,00,000/ - on account of investment made from the undisclosed sources; Rs. 31,94,481/ - on account of extrapolated sale for 340 days on the basis of sale out of books of Rs. 1,11,99,427/ - in 127 days by applying gross profit rate of 10.35% and; Rs. 71,07,100/ - as addition on account of working capital required for attaining sale of Rs. 1,11,99,427/ -. Such order of the Assessing Officer was modified in appeal. The learned Commissioner of Income Tax confirmed the addition on account of extrapolated sale on the basis of sale outside the books of accounts for the period 11.10.2004 to 25.02.2005. The Commissioner also confirmed the addition of Rs. 71,07,100/ - for working capital requirements of the assessee, whereas the addition of Rs. 21,00,000/ - in the capital account of assessee was set aside.
(3.) THE learned Tribunal in further appeal by the Revenue as well as by the Assessee rejected the contention of the assessee in respect of addition of sales through 17 sale bills amounting to Rs. 1,11,99,427/ - and affirmed the finding that such sales were made outside the books of accounts. However, it held that there is no justification to infer that the assessee would have undertaken sales outside the books of account during the rest of the financial year also, therefore, the assessment of unrecorded sales were limited to Rs. 1,11,99,427/ - representing 17 unrecorded sale bills alone. The Tribunal partly granted relief, when it made addition of Rs. 20 lacs on account of unexplained investment made towards the working capital as against Rs. 71,07,100/ - added by the Assessing Officer and upheld by the Commissioner of Income Tax.;