9911796707
TMI Blog1979 (10) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal was justified in upholding an addition of Rs. 10,000 ? " The assessment year in question is 1970-71. In that year, the assessee was engaged in the business of supplying firewood to different sugar mills. His trading account showed a gross profit of Rs. 61,078, on sales of Rs. 12,66,191 giving a rate of 4.8 per cent. against 5 per cent. and 7 per cent. disclosed in the earlier assessment years. The ITO found various defects in the assessee's account and rejected it. One of the reasons for rejection of the accounts was that the assessee had claimed a shortage in the amount of fuel wood purchased by him which was in excess of the shortage claimed by him in the earlier years and on being called upon to explain the excessive shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases made, amounted to 2,725 quintals. The average price of this was taken at Rs. 5 per quintal and an addition of Rs. 17,000 was made. The assessee appealed to the Tribunal. The findings recorded by the Tribunal have caused considerable difficulty in the disposal of this case. The Tribunal has found as a fact that the defects in the account books pointed out by the ITO did not exist, and that the assessee had maintained proper books of account and as such they could not be rejected. It also held that the rate of profit disclosed by the assessee had been accepted for the earlier two years. After recording this finding they went on to observe that addition can be made for excessive shortage for which the assessee could not give satisfacto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y think fit even in cases where the accounts are correct and complete, if the method employed by the assessee is such that the true income cannot be properly deduced. We see no substance in this argument. There is no finding by any of the authorities that the method of accounting employed by the assessee is such that the income cannot be properly deduced therefrom. The, ITO rejected the accounts on the ground of various defects found by him and the fact that there was an excessive shortage and the gross profit shown was less. The order of the ITO and the reasons given by him cannot be rewritten, so as to bring it in line with the first proviso to s. 145(1). We are, accordingly, of the view that there was no justification for making the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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