TMI Blog1975 (5) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... eported a total and taxable turnover of Rs. 42,746. There are there disputes in relation to the assessment which are discussed serially. 3. The first objection relates to the rejection of he appellant s reported turnover and an addition at 10 per cent of the disclosed sales for certain defects and omissions. A gross profit of 43 per cent was not said to be commensurate with the line of business. Detailed stock inventory was said to be not available. For these reasons, the assessing authority rejected the total turnover and made an addition of 10 per cent. The AAC, in appeal, found that the gross profit on comparison of the gross profit position in the last three years did show some erratic variation viz. 46 per cent, 25 per cent and 75 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gross profit is not shown to be so abnormally low. The appellant has explanation for the fall and such explanation is prima facie correct. The appellant does not have closing stock inventory on 31st March of each year because the appellant keeps accounts from 1st October to 31st September. Even so, the appellant is able to extract the closing stock from its day to day stock account. Hence there is no merit in the objection that the closing stock inventories as on 31st March has not been maintained. Under these circumstances, the addition at 5 per cent sustained by the AAC has also to be deleted. The appellant s total turnover will therefore get reduced by Rs. 2,137.30 4. The next contention relates to the question of assessment under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies only to the assesses where there had been prior assessment under s. 7. It is clear that both the assessment for the year 1971-72 as originally made by the AO and 1972-73 as decided by the AAC were under s. 3(1). Sec. 7(2-A) reads as under: "The permission granted by the assessing authority under sub-s. (2) shall continue in force so long as the dealer is legible to be assessed under this section and has not withdrawn his opinion to be so assessed." It is clear that the word "Continue" and the word "withdrawn" in s. 7(2-A) would possibly apply only to a person hither to assessed under s. 7 as otherwise the question of continuation of such assessment or the question of withdrawing the option would not arise. Hence the case for an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al assessment and request the assessing authority to assess him under sub-s. (1) of s. 3 of the Act, provided that the dealer is able to furnish to the satisfaction of the assessing authority all the particulars for so assessing him." It may therefore, be seen that the person who is assessed provisionally under s. 7 can revoke this opinion and get himself assessed under s. 3(1) at any time before filing the return. the appellant has not revoked. On the contrary, he filed AA-1 return which applies for s. 7 assessee on 26th April, 1974. Proviso to r. 15(1) reads as under : "Provided that a dealer who opts to pay tax at the compounded rates under s. 7 shall submit a return in Form AA-1" It is therefore clear that in view of the proviso, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 7. 5. The next dispute is in relation to classification of goods in respect of sales of revolving tilting chair unit bases to the extent of Rs. 3,852. We have been shown photographs of the items. The appellant is not a dealer in chairs, but only dealer in furniture requisites. The photographs showed that the steel base is got manufactured by Tvl. Jothi Engineering Works and sold by the appellant along with furniture requisites for manufacture of iron and steel chairs. It is the appellant s case that it is only a component of furniture. The authorities however took the view that the items fall under Entry 128 of the First Schedule which reads as under : "Furniture and other office equipment of every description (other than those men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the records and their use, we have no doubt that the levy of tax on these items on single point basis under Entry 128 of the first Schedule is incorrect. What is sold by the appellant is chair base, an important part of the furniture. It is not furniture itself by any tests. No user of the furniture goes and purchases the chair base as a substitute for chair. Lot of manufacturing works has to be done on the same before it becomes ready for use. It is not even possible to sit on it. The articles are sold to the furniture manufacturers and not to the users. It may not be a component in the strict sense of the word as stated by the AAC. It may not also be an accessory. But it is very much a part of the furniture though it is not furnitu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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