9911796707
TMI Blog2008 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, Delhi Bench 'C' (for short as 'Tribunal') in ITA No.145/Del/1998 relevant for the assessment year 1992-93. 2. The short facts relevant for the disposal of this appeal may be summed up as under that the Assessee was running a Proprietary Business under the name and style Studio Saket dealing in photographic films and still photography. During the impugned assessment year, the Assessee had declared its gross profit at 1.5% on the sale of photographic films at Rs.8,98,56,016 to its registered dealers. 3. During the course of assessment proceedings, the Assessing Officer issued summons under Section 131 of the Income Tax Act, 1961 (for short as 'Act') to the aforesaid registered dealers to whom the sales were made requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss Profit declared at 1.5% was wholly unreliable and the registered dealers were either the bogus concerns of the Assessee's or the goods were actually sold at a premium in the market. He accordingly rejected the books of accounts and estimated the Gross Profit rate of 10% of turnover resulting into an addition of Rs.75,32,104/-. 8. The Assessee preferred appeal before the Commissioner of Income Tax (Appeals) [for short as CIT(A)]. The CIT(A) re-examined the issue in the light of these facts and material available on record and arrived at a conclusion that the Assessee had declared the Gross Profit rate at 4.3% for the first 11 months of the accounting year and for the month of March, 1992 the gross profit was declared to 1.5% for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made during the year to the same person against huge cash advances or the sales are at credit when sale proceeds are realized, in this situation, there is a valid presumption that the customers are known to the traders. In such circumstances, the Assessee cannot be absolved of the obligation to furnish a confirmed copy of the customer's account or to produce the clients for verification of the transactions. The Assessee had received huge cash advanced from the customers and had also supplied goods on credit. The registered dealers were not produced for verification despite sufficient opportunities granted to the Assessee by the Assessing Officer. 12. The Assessee had contended before the Tribunal that he had sold at lesser rates than, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular year depends on many factors, for example, the general market conditions based on demand and supply position, the rise or fall in market rates, especially abrupt ones, the capital position vis-'-vis the turnover achieved, and many others. It is for the Assessee to explain the fall, if it so happens, and to substantiate his reasons. On the estimation of profit, for the eleven months of the accounting year the Assessee has declared a Gross Profit rate of 4.3% and for the month of March it has gone down to 1.5%. No plausible reasons had been furnished. No doubt, after rejection of books of accounts, the Assessing officer has to estimate the net profit on the basis of the material available on record, but has no right to estimate it ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
