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24. Therefore in the present set of facts and circumstances, in our considered view, the Revenue has no option but to estimate Kantilal Kataria,Ratlam Asstt.Yr.2011-12, 2012-13 a reasonable net profit on the suppressed sales. We find that in the return of income furnished for the assessment year under consideration, u/s. 153A of the Act, the assessee has voluntarily shown an income of Rs. 1,00,00,000/- on account of undisclosed income from scrap trading and undisclosed initial investment in the business of scrap trading respectively at Rs. 75,31,785/- and Rs. 24,68,215/-. Thus, on suppressed sales of Rs. 9,41,47,310/- the assessee has disclosed net profit of Rs. 75,31,785/- which works out to be 8% only. As against such net profit rate of 8%, the CIT(A) has estimated the rate of net profit at 25%. Considering the facts that the assessee has carried out only a trading business on wholesale basis which was commenced by him only in the financial year under consideration and further considering the amount of investment, rate of return on investment etc. in our view, the estimation of the net profit rate so made by the CIT(A) at 25% is quite at a higher side. In all the fairness to both the parties , we restrict the estimation of net profit at 10% of the undisclosed sales. Before us, the assessee has also taken two separate grounds Kantilal Kataria,Ratlam Asstt.Yr.2011-12, 2012-13 bearing nos. 1(c) and 1(d) for allowing him the benefit of telescoping of the total undisclosed income shown in the return against the net undisclosed income/investment finally determined. We are of the considered view that an assessee is eligible for claim of set-off of the undisclosed income voluntarily shown by himself in the return of income filed u/s. 153A against any undisclosed income/undisclosed investment, finally determined. Accordingly, the AO is directed to work out the net profit at the rate of 10% on the unaccounted sales of Rs. 9,41,47,310/- i.e. at Rs.94,14,731/- and after giving due benefit of telescoping of the undisclosed income of Rs. 3,60,00,000/- already shown by the assessee in his return of income (other than those undisclosed income for which a separate specific claim for set-off is made by the assessee), re-compute the total income of the assessee. Accordingly, the Ground No. 1 of the Revenue is dismissed and Ground Nos. 1(a), 1(c) and 1(e) of the assessee are Partly Allowed and Ground No. 1(d) of the assessee is fully allowed.

45. Through the Ground No. 3(c), the assessee has agitated the action of the Ld. CIT(A) in not granting any benefit of telescoping to the assessee in respect of advances given to Mr. Rahul against the additional income of Rs.3,60,00,000/- surrendered and shown by the assessee himself in his return of income for the assessment year under consideration. This ground of the assessee becomes infructious and academic since we have Kantilal Kataria,Ratlam Asstt.Yr.2011-12, 2012-13 already deleted the addition of Rs.3 cr. for the alleged advance to Mr. Rahul. However we find that the Ld. CIT(A) has dislodged the claim of the assessee on the ground that the assessee failed to demonstrate that the advance to Rahul was given only during the year under consideration and not in the earlier years and therefore, the benefit of telescoping of such advances against the additional undisclosed income shown in the return for the year under consideration cannot be given. In our considered opinion, the Ld. CIT(A) is not correct in his approach for the reason that if the assessee had given the advances in the earlier years then, legally, no addition on this count could have been made in the assessee's income for the year under consideration. Once the CIT(A) has confirmed the addition under s.69 of the Act, it has to be necessarily held that the advances were given by the assessee during the year under consideration only and not in the earlier years, for the reason that under the provisions of s.69 of the Act, an addition can be made only for the year in which the assessee has been found to have made undisclosed investment. In our view, the Ld. CIT(A) was not correct in sailing on two boats Kantilal Kataria,Ratlam Asstt.Yr.2011-12, 2012-13 inasmuch while confirming the addition, he has presumingly affirmed that the assessee had made the investment only during the year under consideration but, while considering the benefit of telescoping, the Ld. CIT(A) has presumed that the assessee might have made such investments by giving advances to Mr. Rahul in earlier years. In our considered view, since, we have fully deleted the addition of Rs.3,00,00,000/- so made by the AO, as aforesaid, the question of telescoping has become academic in nature only. Accordingly, the Ground No. 3(c) of the assessee is allowed.

78. Now, coming to the ground nos. 6(a) & 6(b) raised by the assessee, from the CIT(A)'s Order, we note that after determining the amount of undisclosed investment by way of loans and advances at Rs.2,31,95,000/-, Ld. CIT(A) vide para (11.13) of his Order, has also made a direction to give the benefit of telescoping of income disclosed by the assessee in his return of income filed under s.153A of the Act for the assessment year under consideration. The CIT(A) has restricted the benefit of telescoping to the extent of Rs.1,95,40,000/-. The CIT(A) while holding the claim of the assessee from Rs.2,60,00,000/- to Rs.1,95,40,000/-, has held that the separate benefit of Kantilal Kataria,Ratlam Asstt.Yr.2011-12, 2012-13 telescoping has already been granted by him to the assessee in respect of undisclosed investment in purchase of land at Rs.52,00,000/- and profit on sale of such land at Rs.12,60,000/- aggregating to a sum of Rs.64,60,000/- while adjudicating the separate grounds related to such issues.

79. We observe that the assessee has challenged the quantum of telescoping benefit given by the Ld. CIT(A) against the total undisclosed income of Rs.3.60 cr. surrendered during the course of search and offered to tax in the return of income. As observed earlier in the preceding paras, we will specifically deal with the issue of telescoping benefit and set off of the addition sustained in the hands of assessee against the income surrendered and offered to tax, in the subsequent paras. However, since we have deleted some of the additions sustained by ld. CIT(A) there will be an overall change in the telescoping benefit available to the assessee. Thus, these two grounds of the assessee are partly allowed subject to our working of telescoping benefit available to the assessee.