The respondent/assessee is alleged to be engaged in the business of manufacture and sale of steel ingots and billets. The respondent/assessee filed return of income for the above assessment years. It appears that the Central Excise Department conducted a search of the premises of the assessee on 24.6.04 and in the course of the said search, incriminating documents and evidence were seized, which were found in the computer and floppy disks. On the basis of the seized materials, the Central Excise Department issued a show cause notice in which it was alleged that the assessee indulged in evading central excise duty by making unaccounted purchase of raw materials, by suppressing production, indulged in clandestine removal of bars and rods without issue of invoice and without payment of duty. In the course of investigation, it was found that the assessee was purchasing ingots and billets from certain persons and it was found to be unaccounted purchase. Based on the abovesaid show cause notice, the Assessing Officer concluded that the documents seized indicate collection of sale proceeds of unaccounted bars/rods by assessee in cash and unaccounted sale proceeds collected by cash. The Assessing Officer, based on the show cause notice issued by the Central Excise Department and the documents in support of the show cause notice, estimated the gross profit at 16.36% and, accordingly, demanded tax on the same. The assessee, aggrieved by the said order, moved the Appellate Authority, viz., the CIT (Appeals) by filing an appeal.
