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20. To conclude, the AO is directed to reduce the addition of Rs.9.54 crs. To Rs.4.26 crs. as discussed above. The appeal is PARTLY ALLOWED.

11. Against the above order, the assessee and the Revenue are is cross appeal before us.

12. We have heard both the counsel and perused the records. The ld. Counsel of the assessee submitted that the scribbling in the loose sheet is only a rough noting of the estimates. He submitted that there is no other evidence supporting the said scribbling.

The ld. Counsel of the assessee submitted that de hors any corroborative evidence, these scribbling on rough notes cannot be the sole basis for addition for undisclosed income.

He further submitted that no defect whatsoever has been found in the books of accounts of the assessee and the preceding and the succeeding year, the profit offered has been accepted. Hence, he claimed that the entire addition on the basis of the said loose sheet scribbling is unjustified. The elaborate submission of the ld. Counsel of the assessee in this regard reads as under:

16. Upon careful consideration we find that the addition in this case is a result of search conducted wherein loose sheet being page no. 9 and scribbling in front of the said ITA Nos. 2707 & 2408/M um/2017 page is the sole basis. While analyzing the scribbling as mentioned in the order of the A.O. reproduced in para 5 above, the A.O. has considered that it reveals undisclosed sales of Rs.5.22 crores and cash component of Rs.4.32 crores which has been added to the income of the assessee. The ld. CIT(A) while considering the issue has noted that the scribbling in the said front side of page no. 9 show that the disclosed profit would be Rs.4.62 crores. Hence, he was of the opinion that only Rs.4.62 crores can be added and no further addition is justified. In this regard, we note that the A.O. in his order has noted that on the reverse side of page no. 9, the assessee has noted sales of Rs.5.82 crores. That the assessee has recorded sales of Rs.4 crores based on total expenses of Rs.17 crores.

However, the A.O. has rejected this notings by observing that loss of Rs.4 crores is not actually a loss, since unsold stock has not been included in this calculation which has been done on the front page where the figure arrived is Rs.4.62 crores.

17. In this regard, we note that it is the submissions of the assessee that loose sheet scribbling are merely estimates and de hors any corroborative evidence, the additions solely based on these loose sheets scribbling cannot be made. We find that this submission of the ld. Counsel of the assessee has considerable cogency. The said loose sheet was found from the residence of one of the partners. It does not mention the name of the assessee firm directly or indirectly. Moreover, the said notings are also not claimed to be recorded in the handwriting of Shri Shankarlal Virji Thakkar or any other partners of the assessee firm. In this regard, we place reliance upon the Hon'ble Apex Court decision in the case of CIT vs. P. V. Kalyanasundaram [2007] 294 ITR 49 (S.C.), ITA Nos. 2707 & 2408/M um/2017 wherein it was held that the addition solely based upon loose sheets scribbling de hors any corroborative findings, is not justified.