TaxTMI 
TaxTMI 
1971 (8) TMI 59
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....ome-tax Act, 1961 ?" The assessee is a firm doing business in the manufacture and sale of horn, ivory and rose-wood curios. For the assessment; year 1964-65--the relevant previous year being the year ended March 31, 1964-the assessee returned an income of Rs. 44,614 under the head "business". The Income-tax Officer held that the gross profit of Rs. 1,50 411 on the admitted turnover of Rs. 5,60,565 was too low as it worked out only at 24.3%. He found several defects in the accounts and rejected the accounts and estimated the gross profit at 30% which resulted in an addition of Rs. 31,814. The Income-tax Officer also found that the expenses claimed in the assessee's Bombay branch was Rs. 32,555 during the relevant year even though the increa....
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....r his conclusion that the assessee had suppressed stock to a large extent was not supported by any evidence. The Tribunal, therefore, found that the assessee was not guilty of any fraud or gross or wilful negligence. It, therefore, cancelled the order imposing the penalty. The Explanation added to section 271(1)(c) is as follows : " Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purposes of making or earning any income included in the total income but which has been disallowed as a deduction), such perso....