1 itxa2723-09 sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2723 OF 2009 The Commissioner of Income Tax, Central III, Mumbai ..Appellant. V/s. M/s. Polycab Industries Pvt. Ltd. ..Respondent. Ms. Anamika Malhotra for the appellant. Mr. P.J. Pardiwala, senior Advocate with Sudhakar G. Lakhani for the respondent. CORAM : J.P. DEVADHAR AND K.K. TATED, JJ. DATED : 14TH SEPTEMBER, 2011 P.C. :- 1. Whether the ITAT was justified in deleting the addition made by the assessing officer in the Block assessment order, on account of undisclosed income received by the assessee on sale of scrap, is the question raised in this appeal. 2. During the period from 17/8/2001 to 13/10/2001 search action was carried out at the premises of the assessee wherein some loose papers were found containing particulars for the period from 2 itxa2723-09 1/4/2011 to 30/6/2001. On the basis of the seized material, the assessing officer made addition of undisclosed income in the entire block period on account of scrap sale. 3. On appeal filed by the assessee, the CIT(A) called for the remand report and on the basis of the remand report deleted the addition made by the assessing officer. On further appeal, the ITAT has upheld the order of CIT(A). 4. The argument of the revenue is that since the assessee is manufacturing electrical wires and cables, generation of scrap is very much incidental to the business of the assessee and in fact the assessee had admitted to the unaccounted scrap sales in the block return filed and, therefore, the assessing officer was justified in making the additions. 5. The finding of fact recorded by the Tribunal is that the assessee has established that upto 31/3/2000, the sale of scrap has been accounted for in the regular return of income. For the year ended on 31/3/2001 there was no manufacture and consequently, there was no question of generating scrap. In these circumstances, the ITAT had accepted the statement of the Director of the assessee that the entries in the seized papers related to the sale of empty drums which tallied with 3 itxa2723-09 the entries in the books of account maintained by the assessee which were already offered for tax and, therefore, further addition was not warranted. 6. Thus, the decision of the ITAT is based on finding of fact and no substantial question of law arises from the order of the ITAT. 7. In the result, we see no merit in appeal and accordingly, the same is dismissed with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)