2011 (2) TMI 759

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.... apply a Gross Profit (GP) rate of 8.5% of the turnover so as to confirm the addition to the extent of Rs. 22,81,572/- only on account of suppression of profit by manipulating the purchases. 2. The assessee, in its cross objection, has contended that the ld. CIT(A) has erred, in the absence of any comparable case, in applying the GP rate of 8.5% of the total turnover, particularly when the GP rate declared by the assessee was better than the GP rate assessed for the preceding year. 3. The facts are that the assessee individual is the proprietor of M/s Sita Steel, which is engaged in the business of trading in Iron & Steel Goods. The assessee had made purchases from six parties. The AO carried out verification proceedings. Thereon, the....

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....de an addition of Rs. 47,95,526/-. 4. By virtue of the impugned order, the ld. CIT(A) confirmed the addition made by the AO to the extent of Rs. 22,81,572/-. While doing so, it was observed, inter-alia, that the AO had nowhere disputed that the purchases made by the assesse from the concerned two parties stand reflected in the closing stock; that the AO had erred in disbelieving the assessee's contention regarding the closing stock; that however, the purchases from these two parties had not been confirmed; that therefore, the books of account of the assessee had become highly unreliable; that therefore, the books of account of the assessee required to be rejected and a GP rate was required to be applied to incorporate the likely suppress....

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....ned; that the AO only disputed that the copy of the stock register was a computerized copy and it could not be relied on, as it was a self-serving piece of evidence; that the assessee has since died on 17.12.2009 and the present assessee, Swaran Lata Sharma is the only legal heir of the assessee and is unaware of any factual aspect of the case. The ld. Counsel for the assessee has also furnished a written Synopsis. It has been contended that there is a distinction between bogus purchases and unverifiable purchases; that the present case is a case of not bogus purchases, but unverifiable purchases, since undisputedly, the said purchases were entered in the stock register maintained by the assessee and were shown as closing stock; that in suc....