TaxTMI 
TaxTMI 
2003 (7) TMI 45
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.... the income at a gross profit at 27 per cent. of the turnover resulting into the enhancement of the income maintained by the learned Commissioner of Income-tax (Appeals) at Rs. 1,50,000 by an amount resulting into the total income at Rs. 2,60,000 approximately?" The appellant-assessee is carrying on the business of sale and purchase of lottery tickets on commission basis. He did not file return of income for the assessment years 1988-89 to 1994-95 till his premises were searched on October 29, 1993, in terms of section 132(1) of the Act and notices were issued by the Assistant Commissioner of Income-tax, Investigation Circle-I, Patiala (hereinafter described as "the Assessing Officer"). In the course of search, cash book, ledger and vouc....
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....ficer passed the assessment order dated March 29, 1996. He held that the seized books of account are not correct and complete by observing that the assessee had not indicated cash balance as on April 1, 1993, even though the subsequent entries were recorded. Similarly, closing balance had not been worked out in the cash book. Accordingly, he invoked section 145(2) of the Act and assessed the income of the assessee on estimate basis at Rs. 10,48,000 after deducting Rs. 5,00,250 as expenses on estimate basis. The Assessing Officer also added Rs. 1,00,000 surrendered by the assessee on the premise that even though the assessee had claimed that amount to be agricultural income from the Hindu undivided family, no evidence was produced regarding ....
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....hed such details for two days only, i.e., for October 20, 1993, and October 21,1993, and it was seen that the G.P. rate worked out at .05 per cent. only during these days. However, this statement of two days may not represent the entire year's proceedings. On the other hand, it was seen that the appellant had not accumulated funds for acquiring property, etc. A surrender of Rs. 1 lakh was made at the time of search. If the G.P. rate is taken at .2 per cent. as in the case of another stockist which was being relied upon by the appellant (actually the G.P. rate in that case was high as it is operating out of Ludhiana), then the G.P. would be Rs. 5,63,018 and after allowing expenditure as per the preceeding year the income would, in fact, woul....
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....r to work out the income of the assessee by applying the gross profit rate of .27 per cent. excluding the estimated expenses of Rs. 5,00,250. This is clearly borne out from the following extracts of paragraph 5 of the Tribunal's order: "The assessee relied before the Assessing Officer on the case of M/s. R.P. Lottery, Ludhiana. We have gone through the assessment order and we find that finding given by the Assessing Officer is that G.P. rate in the case of M/s. R.P. Lottery was 24 per cent. excluding the incentive of Rs. 7,35,451 received by M/s. R.P. Lottery. If these incentives are taken into account, the G.P. rate will go to .3 per cent. The nature of the business in the case of the assessee and that of M/s. R.P. Lottery has not been ....
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....unt is based on a factually incorrect premise because the appellant had, in fact, challenged the decision of the Assessing Officer on all grounds. Dr. N.L. Sharda, learned counsel for the Revenue, supported the order of the Tribunal and argued that the Assessing Officer did not commit any illegality by invoking section 145 of the Act because the assessee had not made complete entries in the books of account and the same were not reliable. Dr. Sharda submitted that no question of law, much less a substantial question of law, arises in the present appeal. We have thoughtfully considered the respective arguments and are inclined to agree with learned counsel for the Revenue. In the first place, it is appropriate to mention that the asser....