1981 (5) TMI 59

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....the ld. Counsel for the assessee as well as the ld. Deptl. Rep., various disputes raised in this appeal are disposed of hereunder. 2. The first dispute relates to determination of income from business. The assessee filed two separate returns for two separate periods namely, 1st April, 1977 to 24th Dec., 1977 and 26th Dec., 1977 to 31st March, 1978. The ITO determined the profits separately for these two periods. In the first period, the assessee admitted a gross profit of Rs. 43,862 on a turnover of Rs. 7,15,702 which worked out to 6 per cent. The ITO found that the rate of G.P. shown was lower that that in a comparable case of M/s. C.A. Krishna Murthy Verma & Sons wherein on a turnover of Rs. 7.25 lakhs a G.P. rate of 7.2 per cent was sho....

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....n other words, the ld. Counsel for the assessee has pointed out that with reference to comparable case cited by the ITO the trading results shown by the appellant could not be said to be lower and, therefore, no addition was called for. Further he has drawn our attention to the Trading and Profit and Loss Account to show that the assessee had maintained quantitative tally in terms of weight only and complete particulars were maintained regarding the commodities dealt with by the assessee. The ld. representative has also filed instances of margin of profit on certain transactions, and copy of assessment orders for 1976-77 and 1977-78. A perusal thereof shows that the margin of gross profit fluctuated between 1.2 per cent to 10.6 per cent and....

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....everal years and therefore, higher rate of interest was paid to them compared to other creditors. In this connection he has filed copy of the order of the Tribunal, Hyderabad Bench 'B' in ITA No. 1242/Hyd/78-79 dt. 12th May, 1980 in the case of Shri Segu Subbiah, Dhone vs. ITO, A-Ward, Kurnool for the asst. yr. 1976-77 wherein the payment of interest at 30 per cent to relatives of the assessee was upheld by the Tribunal on the basis of records of the assessee. Therefore, it was urged that the disallowance was unjustified and should be deleted. The ld. Deptl. Rep. on the other hand, strongly supported the order of the authorities. We have duly considered the rival contentions and the facts of the case. The facts of payment of interest as wel....