COMMISSIONER OF INCOME TAX Vs. SUBHASH TRADING COMPANY

JUDGEMENT

(1.) IN compliance with the directions issued by this Court in IT Ref. No. 102 of 1981 decided on 30th April, 1981, the Tribunal, Ahmedabad Bench 'B' had submitted statement of case and referred the following two questions of law arising out of the Tribunal's order in ITA No. 1047/Ahd/78 79 relating to asst. year 1973 74 :

(2.) THE facts as appearing from the statement of case are that, during the course of assessment, the ITO rejected the books of account maintained by the assessee as, according to him, it was not possible to arrive at correct result of the business from the books of account maintained by the assessee, and assessed the income of the assessee by estimating gross profit at the rate of 15% on estimated sales of Rs. 8,75,000 and made additions of Rs. 93,000. The contentions (additions) were sustained by the AAC. However, the Tribunal while sustaining the order rejecting the books of account modified the assessment order by reducing the gross profit rate from 15% to 12% and reducing estimated sales to Rs. 8,00,000 from Rs. 8,75,000 and reduced the total additions from Rs. 93,000 to Rs. 57,644.

(3.) BEFORE the Tribunal in appeal, the assessee raised the same contentions about invalidity of penalty. The contention of the assessee and the conclusion recorded by the Tribunal are reproduced below :