9911796707
|
Home
Issues involved: The rejection of assessee's books of account and estimation of sales and gross profit by the revenue.
Summary: The High Court of Orissa was presented with a case referred by the Income-tax Appellate Tribunal regarding the rejection of the assessee's books of account and the estimation of sales and gross profit by the revenue. The assessee, engaged in handloom and mill-made cloth business, disclosed a gross profit of Rs. 73,570 on a total turnover of Rs. 12,90,690 in handloom cloth and reported a loss of Rs. 185 on the sale of mill-made cloth. The assessing officer rejected the book results due to the absence of properly maintained accounts and estimated the sales figures and gross profits based on past records. The rejection of accounts was upheld by the Appellate Authority and the Tribunal, although the Tribunal made some adjustments to the estimates. The assessee contested the estimation of gross profits and the rejection of book results, arguing that there was no justification for the revenue's actions. The assessee claimed an intention to close down the mill-made cloth section and dispose of stock without profit, but this explanation was not accepted by the authorities. The Tribunal, as the final fact-finding body, negated the assessee's assertion, leading to the acceptance of the revenue's actions. The High Court noted that the assessment of gross profit fell within reasonable limits, supported by the assessee's own records from previous years, thus upholding the revenue's decision. While acknowledging the difficulty in maintaining day-to-day stock tallying for textile goods with numerous specifications, the High Court concluded that the rejection of the assessee's book results was justified as they did not show any profit. Therefore, the court ruled in favor of the revenue, stating that the rejection of the books of account and the estimation of sales and gross profit were justified in the given circumstances. No costs were awarded in the case. Judge J. K. Mohanty concurred with the judgment.
|
