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2002 (7) TMI 64 - HC - Income TaxDuring the course of assessment proceedings for the relevant assessment year the Assessing Officer, invoking a proviso to section 145(1) of the Act, rejected the books of account maintained by the assessee and estimated the turnover of the assessee-firm at Rs. 40 lakhs as against Rs. 38,76,081 declared by the assessee. Applying a gross profit rate of 13.36 per cent, the rate declared by the assessee in the immediately preceding assessment year, the Assessing Officer made an addition of Rs. 3,45,180, as extra profits, to the declared income of the asses see. - in the instant case, non-maintenance of stock register, coupled with the fact that unaccounted sales were detected during the course of search, in our opinion, is a relevant factor to sustain the view of the Assessing Officer. We do not find any legal infirmity in the view taken by the Tribunal that the disclosures/surrender of Rs. 5 lakhs by the assessee at the time of search, as its unaccounted sales, constitutes sufficient material for the Assessing Officer to base his satisfaction that the books of account of the assessee are not correct and complete. In so far as the estimation of the sales/ gross profit rate is concerned, it being a best judgment assessment, based on past years results cannot be said to be arbitrary.
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