Low gross profit and absence of stock register were held insufficient to justify turnover addition where accounts were otherwise supported.

Vouched purchases and properly billed sales supported the accounts, so the absence of a day-to-day stock register in a business dealing in numerous electrical goods was not, by itself, treated as a serious defect warranting an addition to turnover. Low gross profit alone was also found insufficient to justify rejection of the accounts or an inference of suppressed sales, particularly where the business circumstances and closure in the following year did not support a comparative profit-based addition. The addition was therefore deleted in favour of the assessee.

---

---

Issues: Whether the addition to turnover was justified on the ground of low gross profit and non-maintenance of a day-to-day stock register.

Analysis: The assessee's accounts were supported by vouched purchases and properly billed sales. The mere absence of a day-to-day stock register, particularly in a business dealing in numerous electrical goods, was not treated as a serious defect by itself to justify an inference of suppressed sales. Low gross profit, without more, was also held insufficient to sustain an addition, especially where the business circumstances and the closure of the business in the following year indicated no basis for rejecting the accounts merely on comparative profit figures.

Conclusion: The addition was not warranted and was deleted in favour of the assessee.

---