TMI Blog2006 (1) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... nd during the course of survey a register was found which contained the details of sales as well as expenses. The register was from 1-7-1998. As per this register sales for the period 1-7-1998 to 30-3-1999 amounted to Rs. 41,50,734 as against sales of Rs. 41,22,510 accounted by the assessee. As per the trading and profit and loss account prepared for this period, gross profit was Rs. 4,39,698. Closing stock was Rs. 1,01,999. The Assessing Officer has pointed out the following discrepancies: ( a )No bills or vouchers produced in support of purchases and expenses. ( b )No basis given for closing stock. ( c )A sum of Rs. 42,233 debited under the head excise office but no vouchers of details given. ( d )Rs, 2,72,499 debited as salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners and rent paid for the business premises in pages 2 and 3 of the assessment order. The fact, however, remains is that even if the registers are accepted as true the profit is Rs. 4,39,698 out of which salary to partner and rent for the premises have to be debited. The net taxable income therefore cannot exceed the returned income of Rs. 1,88,500. This was the contention raised by the assessee during the course of assessment and also before me in appellate proceedings. The Assessing Officer on the other hand has taken the sales figures from the register but has applied a net profit percentage at 15 per cent and as estimated the taxable income after allowing remuneration to the partners at Rs. 1,92,000 which is against his own estimation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. The worthy Supreme Court in the case of CST v. H.M. Esciifaits, H.M. Abdual Ali held that suppressed sales for a particular period can from the basis of an estimation of turnover for the whole year. 9. In the instant case, it is clear that income is to be estimated as the accounts are not correct and complete. Looking to the nature of discrepancies pointed out, it will be fair and reasonable if the net profit is estimated. Section 44AF provides application of net profit rate of retail sale. The sale is bar is retail sale while the sale in restaurant is of eatables prepared and hence not retail sales. The Assessing Officer has estimated bar sales at Rs. 29,33,184 and sale of food items at Rs. 26,01,127. Bar sales are estimated at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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