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ii. That during the year under consideration out of total turnover, the turnover of Rs. 30,26,21,654/- was in the nature of sale in transit. This fact is available in the audit report. When more than 96% out of total turnover was in nature of transit sale and in such nature of sale the margin of profit was very low as compared to trading of business.

iii. Further in such line of business, there is neck to neck business competition and the prices are highly fluctuated and as such it cannot be possible to maintain the Gross profit rate at constant level. The profit rate decreased by the assessee looking to volume of turnover is very reasonable.

"4.2 I have considered the assessment order, appellant's submissions and documents on record. The AO noted that the G.P. rate reduced from 1.31% for AY 2011-12 to 0.89% this year, therefore he applied G.P rate of 1.31% as declared in the immediate preceding year which results in addition of Rs. 13,13,232/-. During the course of appellate proceedings the AR of the appellant contended that the appellant's gross profit has been increased substantially as compared to immediately preceding assessment year and the AO has not pointed out any specific defect in the books of accounts therefore the addition is not justified. He further contented that decline in gross profit rate was due to various factors such as increased turnover, tough competition in market, decreasing profit margin etc. I find some force in the appellant's arguments. It is seen that the turnover of the appellant has increased from Rs. 2,57,61,635/- last year to Rs. 31,26,74,332/- this year. With increase in turnover, the profit percentage is generally expected to decline. Although, the assessee had been provided various opportunities to produce books of account with point wise reply/details/information along with supportive evidences but the assessee did not provide the same during the course of assessment proceedings, nor during the course of appellate proceedings accordingly stand of the appellant stood rejected within the meaning of section 145(3) of the Act, which is held valid hereby. Keeping in view the various factors enumerated by the appellant for fall in the gross profit and particularly the fact that the turnover of the appellant had increased substantially during the year, the addition made at Rs.13,13,232/- appears to be on higher side. Keeping in view the overall facts and circumstances of the case and considering the nature and volume of the appellant's business, it is held that a lump sum addition of Rs. 10,00,000/- would be sufficient to cover up all possible leakages in the trading and profit & loss account. The addition made at Rs. 5,13,232/- is sustained to the extent of Rs. 10,00,000/-. The appellant gets partial relief. Ground Nos. 1 and 2 are treated as partly allowed."