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2019 (9) TMI 546 - AT - Income TaxGP estimation - non maintenance of stock records - AO estimated the GP rate at 10% as against 5.73% shown by the assessee on the ground that assessee has not maintained any stock register and the closing stock was certified by the partners on the basis of verification of physical stock - CIT(A) relying on various decisions upheld the action of the AO - HELD THAT:- Assessee who is not maintaining any stock register cannot be equated with an assessee who maintenances a stock register on day today basis giving quantitative details of items traded. Further in the instant case find the GP rate has fallen although the turnover has significantly gone up to ₹ 2.09 crores as against 76.46 lacs in the preceding year. When the turnover goes up substantially it is quite possible that the GP rate may come down. As mentioned earlier an assessee not maintaining any stock register cannot be equated with an assessee maintaining stock register giving full details. Therefore, deleting the entire trading addition as argued by assessee cannot be accepted - addition of ₹ 50,000/- on estimate basis for possible leakage of revenue due to non maintenance of stock records will meet the ends of justice. The grounds raised by the assessee are accordingly partly allowed.
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