2014 (9) TMI 1176

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.... sales being 72.5% of al the sales and the g.p. rate fell from 0.76% to 0.15% within one year.  (ii) deleting the addition made on account of low g.p. rate which fell from 0.76^ to 0.15% and the g.p. rate applied was 0.25%'' 2.1 The brief facts of the case are that the assessee is an individual and carries on business of gold & silver bullion, gold silver jewellery and precious & semi-precious stones in the name of the following proprietorship concerns. (i) M/s. Mohan Lal Mahendra Kumar (MMJ), Jaipur (ii) M/s. Mohan Lal Mahendra Kumar Jwellers (MMJ), Noida. (iii) M/s. Mohan Lal Mahendra Kumar Jewellers (MMJ), Delhi. (iv) M/s. A.M. Export, Jaipur Out of the above, the AO rejected the books of account u/s 145(3) of the Act in....

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....livery of goods from the supplier bank at the fixed rate usually decided while the assessee has to deliver goods to the buyers at the market price which may be lower than the purchase cost of the assessee. Due to the day to day fluctuations in the bullion prices the assessee has suffered a decline in gross profit during the year. 4.5 I have carefully perused the order of the AO and the submissions of the A.R. To determine the gross profits for ingredients are necessary sales, purchase, value of the closing stock and opening stock. When all these are verifiable the books of account of the assessee cannot be rejected. The AO has not brought any finding on record regarding non-verifiability of the purchases, sales or the valuation of the clo....

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....re not subject to verification. 2. The G.P. rate during the year has declined and the assessee have vague and general reply which was not found satisfactory. 3. Certain sales of Rs. 10,60,000/- were made to M/s. Silver and Silver who was proved an entry provider in the service conducted by the BCTT Wing of the Department.'' It has not been disputed by the ld. DR that the assessee was not maintaining the regular books of account and day to day stock register for all the concerns which were duly audited. The ld. AR submitted that the ld. CIT(A) has rightly observed that the turnover of the bullions had increased by more than four times and the main reason for decline in the gross profit rate was that the assessee had to take delivery of ....