1981 (7) TMI 119

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....t. The facts are that the assessee is a registered firm earning income from business in general merchandise on wholesale basis. According to the ITO the assessee declared a gross profit of Rs. 1,11,594 on total sales of Rs. 15,35,700, thereby giving a GP rate of 7 per cent which was considered by him to be low. The ITO further observed that the books of accounts suffered from numerous defects in a....

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....is explanation before the ITO the assessee stated that the asst. yr. 1976-77 was on the only year in which due to some price fluctuations there was rise in the G.P. rate, otherwise the G.P. earned in the asst. yr. 1977-78 continues to be the same as in the asst. yr. 1975-76. Besides the above the assessee pleaded that due to opening of some other shops, the assessee had to face keen competition an....