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TMI Blog1970 (2) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... n rejecting the books of account merely on the ground of low percentage of profit when the accounts otherwise have no defects?" The account books were rejected by the Assistant Commissioner of Sales Tax on three grounds: (i) The dealer was never consistent in figures given in the returns and he had filed revised returns. (ii) Most of the purchases were not vouched for. (iii) The margin of prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be not maintained properly. Whether the margin of profit is high or low would depend on very many circumstances. It may be that there are many competitors in the market and the dealer wants to retain the market by keeping a low margin of profit for himself. Cases are not unknown in the economic field when traders on particular occasions undergo loss, to retrieve the business when the opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Commissioner of Income-tax v. A. Raman & Co.[1968] 67 I.T.R. 11 In that case, their Lordships expressed their views as to whether an assessee can resort to evasion of tax by a contrivance or subterfuge. They observed thus: "But the law does not oblige a trader to make the maximum profit that he can out of his trading transactions. The income which accrues to a trader is taxable in his ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes may not, except on peril of penalty, be violated, but it may lawfully be circumvented." The aforesaid passage throws no light directly on the question in issue, but the juristic principle underlying this dictum would be a guide to come to a conclusion whether accrual of low profits, by itself, would enable the taxing authorities to declare the books of account as not being properly maintained. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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