1. By way of these appeals, the appellants have assailed the judgment and order of the tribunal whereby tribunal has partly allowed the appeal of the assessee reducing the GP rate from 15% to 12%.

2. In both these appeals common question of law and facts are involved hence they are decided by this common judgment. For convenience of the court, facts are taken from ITA No. 146/2018.

3. Counsel for the appellant has framed following substantial question of law:-

Appeal No. 146/2018

(i) Whether the ld. ITAT was justified under law while confirming the enhanced addition of Rs. 14,14,80,498/- out of the enhanced addition made by ld. CIT(A) ignoring the explanation submitted by the Assessee appellant before the search team at the time of search on 20.5.2009 as well as explained before the ld. AO as well as before the authorities

(ii) Whether the ld. ITAT was justified under law while sustaining the aforesaid enhanced addition made by ld. CIT(A) at Rs. 14,14,80,498/- on account of so called unaccounted stocks based on its suspicion and surmises and without having any evidence in support of the enhanced addition

(iii) Whether the ld. ITAT was justified under law while sustaining the aforesaid addition of Rs. 14,14,80,498/- made by ld. CIT(A) by comparing the statement dated 30.4.2009 submitted by assessee-appellant to State Bank of Indore and the actual stock found while the books of accounts were rejected u/s 145(3) by the ld. AO and confirmed by the ld. CIT(A) as well as the ld. ITAT, Jaipur

Appeal No. 148/2018

(i) Whether the ld. ITAT was justified under law while confirming the addition of Rs. 4,23,56,186/- made by ld. CIT(A) ignoring the explanation submitted by the assessee appellant before the search team at the time of search on 20.5.2009 as well as explained before the ld. CIT(A)

(ii) Whether the ld. ITAT was justified under law while confirming the aforesaid addition made by ld. CIT(A) at Rs. 4,23,56,186/- on account of so called unaccounted stocks based on its suspicion and surmises and without having any evidence in support of the addition

(iii) Whether the ld. ITAT was justified under law while confirming the addition made by ld. CIT(A) at Rs. 4,23,56,186/- merely on the basis of its findings in the case of M/s. Clarity Gold who deals in business of Gold and not of cutting and polishing of raw material i.e. kharad and thus the business of the assessee company and M/s. Clarity Gold is not of similar nature

4. The facts of the case are that assessee company derives income from business of manufacturing of jewellery and trading of gem stones. A search and seizure operation u/s 132(1) of IT Act, 1961 was carried out on 20.5.2009 at the business and residence premises of the assessee group. The background of search action on the Clarity group was survey u/s 133(A) conducted in FY 2007-08 by BCTT wing of Investigation Directorate at Jaipur which revealed that the assessee company and its sister concern had obtained bogus purchase bills from various entry providers who provided bogus sales bills without supplying the goods mentioned in the bills.

5. Counsel for the appellant has taken us to the order of AO where bogus purchase bill for financial year 2004-05, 2005-06, 2006-07 & 2007-08 of M/s. Clarity Gold Pvt. Ltd. has been detailed which reads as under:-