Gross profit estimation upheld where unreliable books and price controls still supported a 6% profit rate.

Unreliable account books justified estimation of income where the assessee's sales had to be assessed on a gross profit basis. The Tribunal considered the price control order and the assessee's declared lower profit rate, but also noted that profits above 2% had been disclosed in some years. On that factual basis, a gross profit rate of 6% on sales was treated as a reasonable estimate and was upheld against the assessee.

---

---

Issues: Whether the Appellate Tribunal was justified in applying a gross profit rate of 6% on the assessee's sales despite the price control order and the assessee's lower declared profit rate.

Analysis: The assessee's account books were found unreliable, and the income had to be estimated. The Tribunal took into account the price control order but also noted that the assessee had itself disclosed profits exceeding 2% in some years. In these circumstances, the Tribunal's estimate of a 6% gross profit rate on the sales was treated as justified.

Conclusion: The issue was answered in the affirmative, and the estimation of gross profit at 6% was upheld against the assessee.

---