Assessee was engaged in the manufacturing of re-rolled products such as heavy steel structural, joist and girder. A search was conducted upon assessee. Assessing Officer made an addition on account of unaccounted sales based on an estimated production yield of 89 per cent in assessee’s SMS Division.Assessing Officer adopted an estimated yield ratio and proceeded to calculate alleged unaccounted production and consequential sales, resulting in substantial additions. He further held that books of account were not reliable and rejected the same while resorting to section 145(3). Commissioner (Appeals) found that variation in consumption of sponge iron and power in SMS Division was reasonable as the same was certified by a registered valuer. He thus concluded that there was a complete absence of any adverse material against assessee which could support the allegation of the Assessing Officer towards unaccounted production presumed based on the alleged low yield declared by the assessee, and thus rejection of books of accounts was invalid. Tribunal affirmed the order of the CIT A). On appeal, the High Court affirmed the order of the Tribunal.  (AY. 2010-11)