1980 (12) TMI 170

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..... he assessing officer noticed that as per the books of account produced by the assessee the purchase value of the stainless steel was shown as Rs. 36,737.37 and the gross profit worked out only at 3 per cent. On the ground that the gross profit shown as per the accounts suggested sales omission, a pre-assessment notice was issued under section 12(2) proposing an addition of 20 per cent to the purchase value and determining the total and taxable turnover at Rs. 44,084.85 and calling for the dealer's objections, if any. In the reply to the notice the assessee had stated that the low percentage of gross profit by itself did not warrant an inference of suppression of sales turnover or rejection of the books of account and that there was no basis .....

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..... sion and in the circumstances, therefore, merely on the basis that the gross profit worked out at 3 per cent, there was no justification for rejecting the accounts or for best judgment assessment. But the Appellate Assistant Commissioner rejected this contention holding that though the return was submitted voluntarily, it was belated. He was also of the view that but for the inspection, probably the assessee might have suppressed the sales and would not have submitted the return at all. He also sustained the penalty. The Tribunal accepted the finding of the Appellate Assistant Commissioner that there was a belated return and that the explanation offered by the assessee for not submitting the return in time cannot be accepted. The Tribunal a .....

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..... lso be pointed out that neither the assessing officer nor the appellate authorities have found any particular sale or purchase omission. It is only on the general impression that 20 per cent profit should have been derived by the assessee that the account books were rejected and the taxable turnover was determined at best of judgment basis. Even for adopting 20 per cent as the normal gross profit for such transaction, we do not have any evidence or comparable data with reference to the business of other dealers in this line. This Court has been repeatedly pointing out that even a best judgment assessment cannot be a wild guess but a reasonable and justifiable guess based on some material at least. As we have pointed out earlier, in this cas .....

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