1981 (4) TMI 126

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....r the asst. yr. 1979-80 amounted to Rs. 33,569. The ITO did not accept the position that the sales of an assessee would be less than the closing stock. The assessee's explanation was that it had to keep enough stock of medicines and it was for this reason that the closing stock in both the years was more than the sales. The assessing authority however, did not accept this submission. He estimated the sales at twice the closing stock in each year and by applying the rate of G.P. at 23.9% which was shown by the assessee, he worked out the additions of Rs. 10,781 for the asst. yr. 1978-79 and Rs. 11,208 for the asst. yr. 1979-80. After accepting the assessee's submission that in some items the rate of profit was low, the ITO however, made an a....

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.... have been accepted. He also submitted that if the ITO wanted to reject the book result, then the rate of G.P. as shown at 23.9% should not be adopted but the rate of G.P. should have been taken and a lesser figure. He argued that in adopting the rate of G.P. shown by the assessee, then the AACs adopted the policy of approbate and reprobate. The ld. Deptl. Rep. submitted that under the Indian Drugs Act the assessee was required to maintain a register giving the details of the patients, prescriptions and the medicines supplied. He submitted that the sales in this case had only been increased twice the closing stock, but actually the sales should have been increased by 10 times. He did not have any case readily available which could be cited ....