TMI Blog1959 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... cake at Guntur. The reference pertains to the assessment for the year 1947-48. The previous year was the calendar year 1946. In the year of account, the books disclosed a turnover of ₹ 18.18 lakhs and a gross profit of ₹ 92,726 which worked out to 5.1%. The net income disclosed by the assessee was ₹ 25,454. This figure, however, was not accepted by the Income-tax Officer who added four sums on account of the value of the yield of oil and cake from uncounted for kernel ₹ 34,795, the value of deficit yield of oil and cake from kernel disclosed in the books ₹ 46,001, unaccounted for profit on sale of permits restricted to the unproved cash credits ₹ 56,345, and interest of ₹ 48 in respect of one of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to consider minutely every one of the defects and every one of the additions in the view we have taken. They were discussed to exemplify the incorrect nature of the book version. The Tribunal was careful in it concluding sentences to emphasise that it is basing its computation on the estimate of 9.5% and not upon any of the items which were taken into account by the income-tax authorities. The scrutiny by the Tribunal of the items of additions made by the income-tax authorities was merely for the purposes of showing that the accounts could not be relied upon. It considered the weighment book and held that it was difficult and perhaps impossible to say whether the assessee accounted for all the yield of kernel in the books, because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases in Guntur. Having thus computed the gross profit at 9.5%, the Appellate Assistant Commissioner further added a sum of ₹ 56,345 on account of unaccounted for profit on sale of permits restricted to the unproved cash credits. This addition is obviously wrong when a flat rate of 9.5% on the total turnover is being adopted in computing there gross profits. The assessee had recourse to the several entries of cash credits only for the purposes of balancing the accounts with a view to reducing the rate of gross profits. If once the income-tax authorities have rejected the books, they cannot have it both ways, namely, adopting a flat rate to compute gross profits as well as rely on the books for the purposes of adding unexplained cash ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
