COMMISSIONER OF INCOMETAX Vs. SURINDER SUGAR STORE

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal, Amritsar Bench (for short, `the Tribunal') has referred, under Section 256(1) of the Income-tax Act, 1961 (for short, `the Act'), the following question for the opinion of this Court arising out of ITA No. 1371 (ASR)/1979, pertaining to the assessment year 1975-76:

(2.) WE need not dilate much on the issue as in identical circumstances, we have dismissed I.T.A. No. 512 of 2005 Commissioner of Income-tax (Central), Ludhiana v. Smt.Santosh Jain, decided on 10.8.2006, wherein following the judgment of Allahabad High Court in Commissioner of Income-Tax v. Banwari Lal Banshidhar, (1998) 229 ITR 229, a view was taken that where gross profit rate is applied, there is no justification for making disallowance under Section 40A(3) of the Act. Keeping that in view, the question referred in the present reference is answered against the Revenue and in favour of the assessee. The reference is disposed of in the manner indicated above.