1967 (1) TMI 8

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....einafter referred to as the Act). The two questions referred are : " 1. Whether, in the circumstances of the case, the application of the flat rate of 5% was justified when in the case of another dealer of the same place, namely, M/s. Abid Hussain Sajjad Hussain of Mubarakpur, who is also an assessee, a rate of 2% disclosed was accepted ? 2. Whether, in any case, the income-tax authoritie....

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.... 13 of the Act was applied. The Income-tax Officer estimated the sales at Rs. 2,50,000 on which a flat rate of 5% was applied. In applying this rate the Income-tax Officer took into consideration the fact that the assessee did some business also on his own account. On appeal, the Appellate Assistant Commissioner confirmed the assessment. He observed that there was no check either on purchases or o....

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....y the assessee for the reason best known to him. The Tribunal did not consider that any interference with the rate of 501, was called for. It was mentioned that most of the sales were " invoice sales ", which means outstation sales, and the inference was that such sales usually carry a larger margin of profit than local sales. No attempt also appears to have been made at any time before the Tribun....

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.... kept in view and, therefore, it is not possible to say that the estimate of income was arbitrary or capricious to justify holding that some error of law had been committed by the Tribunal in confirming the flat rate of 5% applied by the departmental authorities. It is again well settled that an estimate can be made by applying a flat rate and, so long as the income-tax Officer has exercised his j....