9911796707
TMI Blog2018 (9) TMI 1689X X X X Extracts X X X X X X X X Extracts X X X X ..... pertaining to the order and therefore, the ld AO is correct in taking cognizance of those incriminating documents for making addition during the year. - Decided against assessee. Gross profit estimation - unaccounted sales - Held that:- The assessee is in the business of jewellery. It deals in gold ornaments. Gold is general trading at margin of 1% to 2%. Unless assessee designs its own jewellery the profit margin is very low in that business as gold prices are transparent and readily verifiable. In the assessment year 2005-06 the ld CIT(A) has taken the gross profit ratio of 10%. According to us such percentage is very high and is comparable with other trading commodities. Therefore, such a high gross profit margin cannot be upheld. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l no such ground was mentioned, however, in the revised ground the assessee has raised specific grounds. 5. The ld CIT DR contested that if the assessee wants to raise the additional grounds of appeal then it has to come as per prescribed procedure. Under the guise of revised grounds the assessee is not allowed to raise additional grounds. 6. The ld AR stated that the assessee has challenged the additions stating that it is bad in law in the original grounds of appeal, therefore, it also covers whether such additions is validly made or not. Hence, it is not additional ground of appeal but the same ground of appeal worded differently. He further stated that ground Nos. 2, 3 and 4 raised in the original appeal memo are not at all contes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction found related to trading activities only profit embedded therein can be added. 11. The ld DR relied upon the orders of the lower authorities. 12. We have carefully considered the rival contention. During the course of search a diary was found which was marked as Annexure A-3 wherein, certain transactions were found. As the assessee did not explain anything the ld AO made the addition of ₹ 136489/-. The ld CIT(A) held that though entries appeared to be sale transactions but addition cannot be made on the basis of GP. He gave the reason that no trading account, quantitative details or ledger accounts were produced. He further held that entire business of the assessee is undoubtedly unaccounted and therefore, he held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof. Therefore, in absence of any guidance available from the past history of the assessee or any comparable shown to us by any party, we are of the opinion that appropriate net profit is required to be added. The assessee is in the business of jewellery. It deals in gold ornaments. Gold is general trading at margin of 1% to 2%. Unless assessee designs its own jewellery the profit margin is very low in that business as gold prices are transparent and readily verifiable. In the assessment year 2005-06 the ld CIT(A) has taken the gross profit ratio of 10%. According to us such percentage is very high and is comparable with other trading commodities. Therefore, such a high gross profit margin cannot be upheld. Therefore, we direct the ld AO t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
