1981 (2) TMI 131

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....income from foreign liquor shop at Rs. 3,000 only. But the ITO on the basis of the income shown from the foreign liquor business at Rs. 4,259 estimated the income from foreign liquor shop at Rs. 8,000. The IAC further observed that in respect of country liquar business, the assessee had declared net loss of Rs. 3,626 on total sale of Rs. 1,13,394 and claimed expenses at Rs. 1,17,020. But the ITO estimated sales of 2 1/2 time of the licence fee paid and applied a net profit rate of 12 1/2 per cent on the sales estimated. Hence, the ITO initiated penalty proceedings and referred the matter to the IAC. The IAC on his turn issued a show cause notice in response to which the assessee contended that as against the returned income of Rs. 8,314 the....

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....esentative of the department, Shri V.P. Shrivastaa. In our view there is no case for levy of penalty a whatever additions have been made in the two trading accounts, they are on the basis of estimates only and no gross or wilful negligence has been shown by the Revenue against the assessee. Besides the above, we may observe that so far as the estimate of income in respect of country liquor shop is concerned, the assessee kept the books prescribed under the Excise Act and on the basis of those books the income was shown by the assessee and that is a monopoly belief that entries made are based on the actual state of affairs. So far as the income shown from the foreign liquor shop is concerned, the ld. Counsel for the assessee contended that t....