TaxTMI 
TaxTMI 
2014 (8) TMI 1118
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....ace of record, are that the respondent-assessee is an exporter of cut precious and semiprecious stones (gems) and studded gold jewellery. During the previous year, relevant to the year under appeal, the respondent-assessee declared turnover in Domestic Tariff Area (for short, "DTA)) unit of Rs. 35,07,51,711/- declaring gross profit of Rs. 17027739 with GP rate of 4.85%. In the EOU the turnover disclosed was Rs. 2,52,61,24,396/-, declaring gross profit of Rs. 34,11,57,119/- and GP rate of 13.51%. The Assessing Officer (for short, 'AO') raised certain queries to the respondent-assessee to produce relevant details and the production of stock register, item wise, colour, luster and size-wise as also day to day manufacturing and producti....
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....duced on the basis of non-maintenance of closing stock details as desired by the department and accordingly in view of CBDT Instruction No.02/2008 dt. 22/02/2008, the AO applied NP rate of 6% on its turnover in the DTA unit where the GP rate was shown as 4.85% and accordingly made trading addition of Rs. 2,07,00,805/-. The results, shown being fair in EOU account, was accepted. 4. Dissatisfied with the addition of Rs. 2,07,00,805/, an appeal came to be preferred before the CIT(A). Detailed explanation was offered by the respondent-assessee and it was reiterated that the results are fair and reasonable. It was further contended that on the basis of the same records in the earlier years' addition, if any, stands deleted. It was further c....
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....ere noticed and the respondent-assessee was not able to satisfactorily explain the maintenance of stock register as well as the stock details in the manner desired by the AO and the details were maintained in accordance with the sweet will of the assessee, then certainly true profit cannot be deduced from such accounts. He further contended that once all the three authorities affirmed the view that provisions of Sec. 145(3) are applicable, then reasonable estimate was required to be made. He further contended that once the provisions of Sec. 145(3) are invoked, it necessarily means that the results shown by the respondent-assessee are not fair and reasonable and true profit cannot be deduced out of such accounts. He further contended that m....
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....ly observes that the gross profit rate is not proper and once the results have been rejected, therefore, the addition was required to be made. However, the ITAT has come to a conclusion that in the immediate past assessment year, the ITAT itself had applied GP rate of 2.60% whereas in the present year under consideration, the GP rate has been declared as 4.85%. The ITAT, while deleting the addition, further observed that when there are no distinguishing facts and features in between the year under appeal and the immediate past assessment year and in comparison to the immediate past assessment year, the results are fair and reasonable, the ITAT dismissed the appeal of the revenue. Therefore, in our view, the ITAT, after analyzing the materia....