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2011 (12) TMI 42 - HC - Income TaxBlock assessment - Additions on account of undisclosed investment - rate of gross profit - held that:- The Assessing Officer had made addition of Rs.7,53,953/- on account of investment made in purchase of undisclosed stock. For the assessment year 1996-97 the Assessing Officer observed that the assessee had purchased undisclosed stock of more than Rs.2.75 crores but the addition as noticed above was of Rs.7,53,953/- only. For the same year the assessee as per regular books of accounts had made purchase of Rs.30,83,342/- but the Assessing Officer had taken undisclosed investment for making regularly recorded purchases at Rs.5,16,460/-. The difference is apparent. This discrepancy in the order of Assessing Officer cannot be explained. Further the Assessing Officer has accepted the stand of the respondent that the cassettes were supplied on credit and sales were made in cash, to reduce the element of investment. - With regard to the GP rate, the Assessing Officer in the assessment order had recorded that comparable GP in the similar trades was Rs.2.5%. It is noticeable that no details or particular other dealer were, stated. How the Assessing Officer got this figure is difficult to fathom. It is quite clear that respondent was not in a position to make heavy investments as the GP rate was very low. - Deletion of addition of Rs.2,46,047/- justified.
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