TaxTMI 
TaxTMI 
2005 (5) TMI 21
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....sort to the provisions of section 145(1) of the Act was justified?" The brief facts of the case giving rise to the present case are that the applicant/assessee (hereinafter referred to as "the assessee") was carrying on the business of manufacture and export of leather shoes. The assessee's turnover in the year was Rs. 107.65 lakhs. The profit shown thereon was Rs. 15.60 lakhs giving a gross profit rate of 14.5 per cent. The gross profit for the immediately preceding assessment year was 17.6 per cent. During the course of assessment proceeding, the assessing authority made an enquiry about the gross profit, the assessee had submitted that the exports in the year had been more on which the profitability was less. The Assessing Officer not....
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....er cent. In first appeal, the Commissioner of Income-tax (Appeals) upheld the order of the assessing authority rejecting the books of account and addition of Rs. 4,85,000. The assessee filed second appeal before the Tribunal, the Tribunal vide impugned order, upheld the rejection of books of account and the addition. We have heard Sri V. Gulati, learned counsel for the assessee, and Sri A.N. Mahajan, learned counsel for the Revenue. Learned counsel for the assessee submitted that the Tribunal has wrongly invoked the proviso to section 145(1) and confirmed the rejection of the books of account and the addition. He submitted that merely because, day-to-day record of production and consumption had not been maintained, the proviso to sect....
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.... not been charged to income-tax for any earlier previous year." It is very useful to quote the relevant part of the Tribunal order for invoking the proviso to section 145(1) of the Act: "The rival submissions have been heard and necessary papers on the record, in this connection, have been perused. The income-tax authorities are right in observing that in the absence of day-to-day record of production and consumption, the books of account could not be said to be maintained in a manner from which declared results could be verified. We are, therefore, of the view that the resort by the Income-tax Officer to the proviso to section 145(1) was justified." Admittedly, the assessee is the manufacturer and exporter of leather shoes, theref....
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....is court in the absence of day-to-day manufacturing or production account, justified the applicability of the proviso to section 145(1) of the Act. The Division Bench of this court observed as follows: "The proviso further says that even if the accounts are correct and complete but the method employed is such that the income cannot properly be deduced therefrom, the Income-tax Officer can compute the income upon such basis and in such manner as he may determine. In the instant case it has been found as a fact and it was not disputed before us that the assessee did not maintain any day-today manufacturing and production account and the question is whether on account of this defect the accounts of the assessee could be rejected. In our opi....
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.... In the case of CST v. Girja Shanker Awanish Kumar reported in [1997] 104 STC 130 (SC); [1996] 11 SCC 648, the books of account of the dealer were rejected for non-maintenance of manufacturing account as required under section 12(2) of the U.P. Sales Tax Act. Section 12(2) requires to maintain stock register in respect of raw materials as well as products obtained at every stage of production. The apex court held that if a stock book as contemplated under section 12(2) of the U.P. Sales Tax Act, is not maintained, it leads to the conclusion that the account books are not reliable or that particulars are not properly verifiable, though, the judgment is under the U.P. Sales Tax Act it is relevant in the context of the present case. The dec....