COMMISSIONER OF INCOME TAX Vs. PARECK BROTHERS

JUDGEMENT

(1.) THESE three references are under S. 256(2) of the INCOME TAX ACT, 1961. The assessment years in question are 1972 -73, 1973 -74 and 1974 - 75.

(2.) THIS Court, by its separate orders dt. January 19, 1979, directed the Tribunal, " A " Bench, Patna, to state the case and refer the following questions of law for the opinion of this Court:

(3.) THE ITO adjusted the gross profit and found that the gross profit shown by the assessee in these years was low. He also found that the other dealers have declared better (margin of) profit on sale of ready made garments. He further found that the sales -tax received from the customers was included in the sale price, but the sales -tax paid was not debited in the trading account. He, therefore, considered that the sales -tax paid by the assessee should be debited to the trading account instead of to profit and loss account. As the accounts of the assessee were not amenable to check in the absence of day to day stock register and distinctive number of purchases and sales, the ITO held that the provisions of the proviso to S. 145(1) of the Act were applicable in the instant case. The ITO accordingly estimated the profit at 16 per cent on net sales in each year and took the additional profit of Rs. 78,033, Rs. 43,493 and Rs. 48,200 respectively.