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Assessment Year: 2004-05 heard to the assessee. We direct and order accordingly. Ground No. 3 is allowed for statistical purpose.

4. In Ground No. 4, the assessee has agitated the decision of the Ld.CIT(A) confirming the addition of Rs.1,89,000/- made by the AO on account of free samples given to customers.

4.1 The relevant facts are that the AO observed from schedule "L" to the accounts under Serial No. 2 b that in respect of trading goods, the assessee had 784 pieces as the opening stock which was valued at Rs.128 per piece, further 294 pieces were purchased during the year at Rs.71 per piece and there was closing stock of 236 pieces which was valued by the assessee at Rs.161 per piece. However, 842 pieces of the same item were sold at only Rs. 14 per piece and accordingly the assessee was requested to explain the discrepancy with relevant evidences. The assessee, in response, submitted that opening stock of trading goods were old stock and hence valued at cost. The fashion trend for these items changed during the year and hence the company managed to sell 52 items @ Rs. 240 per piece and out of 842 piece shown in sales 790 pieces were given us from freebies. However, the said explanation was not accepted to the AO as the assessee was not able to prove that the items were given as freebies and held that the 790 pieces were actually sold and income of which had not been disclosed in the books of account. The AO adopted rate at which the said pieces were sold during the year and the undisclosed income in respect of above item was held to be Rs.1,89,600/- (790x240). Accordingly, the AO added the impugned amount to the total income of the assessee. On appeal, the Ld.CIT(A) confirmed the said addition. Aggrieved by the impugned decision, the assessee has raised this ground in the appeal before us.

4.2 Having heard both the sides and perused the material on record, it is pertinent to mention that the assessee during the assessment proceeding has given the details of the freebies of 790 samples and the break up of freebies on trading item to the AO. The break up shows that the assessee has given the freebies to the companies namely First Choice, Indo Fabrics, Style Setlers and Transit for Sales Seven Days. The relevant break up contains the actual invoice, number of total quantity and the relevant details are available at page no. 34 of the paper book. The 6 M/s. India Fashions Ltd.

Assessment Year: 2004-05 perusal of page no. 76 of the Paper Book indicates that the assessee has made sales to the parties to whom freebies are given. When the details have been so provided to the AO, we are of the view that the AO is not justified in doubting the genuineness of freebies given by the assessee by concluding that the freebies are sold for a price. In such an event, we do not find any justification on the part of the Ld.CIT(A) to confirm the impugned addition made by the AO. In view of that matter, the impugned addition confirmed/made by the Ld.CIT(A)/AO stands deleted. Ground No. 4 is allowed.