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TMI Blog1960 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner ; it gave no independent reasons in support of its order. The income-tax authorities did not find that on a comparison of the rates at which the sovereigns are debited in the Bombay branch and the rates at which they were credited in the Karachi branch, any profit was earned by the Bombay branch. In our view, a question of law arises from the judgment of the Tribunal which confirmed the order of the Appellate Assistant Commissioner. We accordingly direct that the Tribunal do draw up and submit a statement of the case on the following question which arises from the order of the Tribunal \ " Whether there was any material to hold that the Bombay branch of the assessee sold 1,66,188 pieces of sovereigns to the Karachi branch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the appellant in his Bombay branch, 1,66,188 pieces were despatched to Karachi, 14,309 pieces were sold locally in Bombay and 500 pieces were despatched to Calcutta. The Income-tax Officer (Non-Companies, I.T. cum. E.P.T.), District Calcutta, by his order dated December 20, 1951, assessed the appellant's total income derived from transactions in sovereigns at Rs. 56,901, It was the appellant's case that 1,66,188 pieces of sovereigns were despatched by him at cost price to his Karachi office, and were not sold and that by the sale of 14,309 pieces in Bombay, he had earned a profit of Rs. 6,462-4-0. The appellant produced before the Income-tax Officer the journal of the Bombay branch showing the record relating to despatch of 1,66,188 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at cost price and the balance, viz., 14,309, were sold to well-known bullion merchants of Bombay. It is also stated that the cash memos and vouchers for these purchases and sales transactions were not available because it was not the practice of maintaining them in Bombay. It is, however, noticed by me from the accounts books that the assessee did not record in the books of accounts the addresses of the parties with whom transactions were made and so they do not admit of any verification. The sales were also found to be mostly, in cash. In view of this fact and also, the fact that the rate of gross profit is very low, I consider that the Income-tax Officer was justified in not accepting the trading result shown. As regards the number of pie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. The appellant then applied to the High Court at Calcutta that the Tribunal be directed to submit a statement of the case on three questions. The question material to the sovereign account was framed as follows : " Whether there was any material to hold that the Bombay branch of your petitioner sold 1,66,188 pieces of sovereign to the Karachi branch at market rates.? " The High Court summarily rejected the application. In the proceedings before the Income-tax authorities, the contention of the appellant does not appear to have been clearly appreciated, and the grounds set out in the memoranda of appeals filed before the Appellate Assistant Commissioner and the Appellate Tribunal contributed in no small degree in giving rise t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the department submitted that even if the transactions of despatch of sovereigns from Bombay to Karachi by the appellant to his own branch may not be regarded as sales, the true effect of the order of the Income tax Officer is to assess the profits earned by the appellant on the local transactions in Bombay. This, counsel contended, had to be done because the books of account of the Bombay branch were unreliable and the other evidence produced by the appellant regarding the prevailing rates was unsatisfactory. We are unable to accept this contention. The Income-tax Officer has calculated the gross profit at an overall rate on all the transactions in sovereigns in the Bombay branch including despatches of sovereigns to Karachi an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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