1970 (2) TMI 93

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....her the Tribunal is justified in rejecting the books of account merely on the ground of low percentage of profit when the accounts otherwise have no defects?" The account books were rejected by the Assistant Commissioner of Sales Tax on three grounds: (i) The dealer was never consistent in figures given in the returns and he had filed revised returns. (ii) Most of the purchases were not v....

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....ns for declaring them to be either false or to be not maintained properly. Whether the margin of profit is high or low would depend on very many circumstances. It may be that there are many competitors in the market and the dealer wants to retain the market by keeping a low margin of profit for himself. Cases are not unknown in the economic field when traders on particular occasions undergo loss, ....

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.... we keep in view the observations of the Supreme Court in Commissioner of Income-tax v. A. Raman & Co.[1968] 67 I.T.R. 11 In that case, their Lordships expressed their views as to whether an assessee can resort to evasion of tax by a contrivance or subterfuge. They observed thus: "But the law does not oblige a trader to make the maximum profit that he can out of his trading transactions. The in....

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....ome-tax Act. Legislative injunction in taxing statutes may not, except on peril of penalty, be violated, but it may lawfully be circumvented." The aforesaid passage throws no light directly on the question in issue, but the juristic principle underlying this dictum would be a guide to come to a conclusion whether accrual of low profits, by itself, would enable the taxing authorities to declare the....