TMI Blog2014 (11) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... around 3 to 7% - The Tribunal has directed addition at the rate of 12.5% which is on the higher side – assessee has fairly conceded that excess 7% is on higher side and that at the most 3% may be applied - maximum and minimum of the profit rate to be 5% - the AO is directed to apply 5% G.P rate as the rate of 12.5 % is drastically higher and 1.03% is drastically lower - Gross profit rate of 5% is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5% against the gross profit of 1.03% shown by the assessee without recording any cogent and convincing reasons in support thereof 2. The assessee company is engaged in trading of polished diamond. The assessee company showed turnover of ₹ 1,86,36,447/- and gross profit of ₹ 1,93,105/- which comes to 1.03%. During the assessment proceedings, the details of purchase was called for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 12.5% of gross profit as against addition of ₹ 1,68,48,663/- made in the assessment order. Being aggrieved by the same, the present appeal is preferred. 3. Mr. J.P. Shah, learned advocate appearing for the appellant company submitted that the Tribunal erred in rejecting 1.03% of gross profit shown by the appellant on a turnover of ₹ 1,86,36,447/- and further erred in hiking it t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the respondent supported the impugned order and submitted that the Tribunal has rightly observed that addition at the rate of 12.5% is applicable in the present case because the appellant company has siphoned off large amount by showing bogus and fictitious addresses. He submitted that the present appeal lacks merits and therefore deserves to be dismissed. 5. We have heard learned advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tically higher and 1.03% is drastically lower. Gross profit rate of 5% is the average rate of the industry and we think it fit to make addition on account of 5% gross profit rate. The addition be made accordingly. We therefore answer the question raised in the negative i.e. against the revenue and in favour of the assessee. 6. In the premises aforesaid, appeal is allowed to the aforesaid extent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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