Case Law Details
Darrk Diamonds Vs I.T.O (ITAT Surat)
ITAT Surat held that the addition on account of unaccounted profit on estimation basis, in trading/ manufacturing of diamonds, restricted at 10% of the sales in view of CBDT instructions vide circular no. 2/2008 dated 22nd February 2008.
Facts-
The appellant is engaged in the manufacturing and trading of rough and polished diamonds. AO made an addition on account of undervaluation of stock of rough diamonds. AO made the addition by taking view that the average purchase rate was much higher than the average rate of opening stock and that still the closing stock was valued at 12% than the average rate of opening stock. It was also alleged that no lot wise details were provided though such records are maintained by the manufacturer.
CIT(A) upheld the order of AO. Being aggrieved, the present appeal is filed.
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