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TMI Blog2004 (8) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion to this court: "1. Whether, on the facts and circumstances of the case, the proviso to sub-section (1) of section 145 or sub-section (2) of section 145 of the Income-tax Act, 1961, were attracted in the present case? 2. Whether, on the facts and circumstances of the case, the income-tax authorities as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer could know that, according to the assessee, the sales this year were made practically at cost price to avail of the cash incentives and to increase the turnover. The Income-tax Officer also found that the sale rates were higher this year. The explanation of the assessee was that the purchase cost had also gone up. The Income-tax Officer scrutinised the purchases and could know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case that cash incentive received should be taken into account for deciding the reasonableness of the profits and that an overall rate of profits of 12 1/2 per cent, would be a fair estimate. On this basis, he sustained the addition of Rs. 32,000 and deleted the balance of Rs. 43,000. The assessee and the Department both filed second appeals against the order of the Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that it is not in dispute that the applicant had issued three post-dated cheques and had entered the same in the cash book maintained by it on a date other than the date of the cheques and, therefore, the Income-tax Officer had rightly held that the result as shown by the books of account cannot be believed. Thus, the provisos to sub-sections (1) and (2) of section 145 are clearly attracted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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