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Income Tax Officer -14 (3) (4) , Mumbai Versus Shri Vivek Shyam Johari and vice-versa

2015 (11) TMI 1541 - ITAT MUMBAI

Gross profit addition - CIT(A) in reducing the addition made to the gross profit from 0.5 percent to 0.1 per cent - assessee engaged in the business of Trading in Diamonds - Held that:- It is a known fact that the price of the diamond would depend upon various criteria, of which size and quality are more relevant. No transaction could take place in the diamonds trade without considering these criteria. Hence, non maintenance of quality-wise stock register was certainly a deficiency on the part o .....

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essee : Shri M Subramanian O R D E R Per Bench: The appeal filed by the revenue and the cross-objection filed by the assessee are directed against the order dated 12.7.2012 passed by the ld. CIT(A)-25, Mumbai and it relates to the assessment year 2009-10. 2. The revenue is aggrieved by the decision of ld.CIT(A) in reducing the addition made to the gross profit from 0.5 percent to 0.1 per cent. In the Cross-objection, the assessee has challenged the decision of ld. CIT(A) in confirming the gross .....

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ssee, the AO noticed that the assessee did not maintain stock register quality wise. The AO further noticed that the rate of diamonds of same size was varying from ₹ 14,000/- per carat to ₹ 1,22,677/- per carat. Accordingly, the AO took the view that non-maintenance of stock register quality-wise was not correct and hence the stock register maintained by the assessee was not reliable. The AO further compared the rate of profit declared by two other diamonds traders. The assessee subm .....

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d. CIT(A) noticed that the gross profit and net profit has come down due to foreign exchange fluctuation. However, he noticed that the turnover of the assessee has increased substantially from ₹ 2.27 cr.to ₹ 51.17 cr. The ld. CIT(A) further noticed that the AO did not point out any instance of non-genuineness of purchases, inflated purchases, non-genuineness of the expenses or inflated expenses etc. Accordingly, the ld. CIT(A) took the view that there is no case for rejection of book .....

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