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5 ITA 430/JP/2012_ ITO Vs. Meena Tiwari

3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the learned CIT(A), who had allowed the appeal partly by observing as under:-

"I have carefully perused the order of the A.O.. The fact of the matter is that during the year, the appellant has shown purchases from 4 parties that were found to nonexistent as business entities. Thus, these purchases remained unproved. The Hon'ble ITAT Jaipur Bench has consistently held unverifiable purchases in the case of gem stones traders to be a sufficient justification for rejection of books of accounts u/s 145(3). Therefore, the decision of the A.O. to reject the books of accounts by invoking provisions of Sec. 145(3) is upheld. Regarding estimation of income, I concur with the submissions of the AR regarding past history being the best guide for estimating the income. Reliance is placed on the case of Gotan Lime Khanij Udhyog 256 ITR 243 (Raj.). In the case of the assessee G.P. rate has decreased from 22.45% in the previous assessment year to 13.89% during this assessment year. However, the turnover has increased from Rs. 1.64 crores to Rs. 1.95 crores. It is a generally accepted principle that when there is increase in turnover the GP falls. Therefore, the G.P. is estimated at 14% which gives gross profit of Rs. 27,32,276/-. The impugned trading addition of Rs. 9,97,571/- is reduced to 6 ITA 430/JP/2012_ ITO Vs. Meena Tiwari Rs. 21,758/- (after giving set off of declared gross profit of Rs. 27,10,518/- by the appellant)."