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2014 (12) TMI 1283 - AT - Income TaxTrading addition - GP determination - rejection of books of accounts - Held that:- There is no dispute that the assessee in his statement dated November 4, 2011 has categorically admitted that the bank account with State Bank of India, Sakti bearing Account No. 10800468872, was not disclosed to the Revenue. As per the said account, there were voluminous transactions during the year under consideration. It is also apparent from the record that the assessee himself accepted the credits in the bank account aggregating to ₹ 89,58,650 as turnover from sale of steel rods and debits and purchase and other expenses. There is no material on record to controvert the findings given by the lower authorities. Thus there is substance in the alternative submission of assessee and, therefore, we hold that the gross profit rate of 8 per cent. appears to be on the higher side. Keeping in view the entire facts and circumstances of the present case, ends of justice will meet in this case if the gross profit rate is restricted to 7 per cent. as against gross profit of 8 per cent. confirmed by the learned Commissioner of Income-tax (Appeals). Addition on account of initial investment - Held that:- In the instant case the gross profit rate has been applied after rejecting the book result and, therefore, no separate addition of ₹ 5,00,000 is called for in respect of purchase and introduction of cash. Shri Sameer Singh, learned counsel for the assessee also referred to the decision in the case of CIT v. Banwari Lal Banshidhar [1997 (5) TMI 37 - ALLAHABAD High Court] wherein it was observed that (page 232) " when the gross profit rate is applied, that would take care of everything and there was no need for the Assessing Officer to make scrutiny of the amount incurred on the purchases by the assessee". In view of the above decisions, we are of the view that the addition made by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) is unwarranted and uncalled for. Accordingly, we delete the addition deposited in the bank account on April 8, 2008.
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