ADAM K M Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this case, the assessee is a dealer in snake skins. For the assessment years 1950-51, 1951-52 and 1952-53, certain addition as have been made to his income. The basis of these additions is that he department refused to accept the assessee's contention that he had to reject a certain quantity of the tanned skins as unsuitable for sale. It is common ground that these snake skins find a market only abroad. The assessee claimed that after he had tanned his skins, he found certain of the skins were not upto standard. He therefore rejected them. The INcome-tax Officer thought that the rejections were excessive. These rejections have been variously described in the orders of the officers below as shortages or wastages. But, it is not denied by the department at this stage that they represent rejections of unsaleable skins which were found to be not upto standard. It is also not in dispute that in spite of these rejections, the assessee's gross profit return was not low and, indeed, compared favourably with the returns of similar dealers. IN dealing with the claim of the assessee on this head, the INcome-tax Officer thought that the rejections came to 15 per cent, which is excessive. According to him, in another case, such rejections were found to be only 2.2 per cent. He was prepared to allow rejections up to 5 per cent.

(2.) FURTHER appeals to the Tribunal resulted in the assessee obtaining a greater relief in this regard, but the Tribunal still maintained the additions at certain figures.