1996 (5) TMI 9

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....ax Act, 1961, read with Explanation 1 was not leviable ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law to hold that it was not a case where the explanation offered by the assessee could not be substantiated by it ?" The brief facts giving rise to this reference are these : The assessee filed a return of income on July 30, 1979, declaring a total income of Rs. 3,080. It was a case of country liquor business. During the year in question, the assessee was licensed by the State excise authorities to carry on the business of trade in country liquor from several shops located at Satna and other areas on a licence fee of Rs. 14,25,000. The assessee disclosed sales of Rs. 21,82,346 and a profit of ....

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....he shops were situated at distant interior places, it had to spend a sizeable sum on account of transportation and travelling expenses. (ii) Sale memos and stock registers were also available and produced. From the account copies, it was not ascertainable whether any expenses were shown for travelling, since neither in the profit and loss account, nor in the trading account, such expenses were appearing. Sales were shown to be low. In other cases, for the same period, sales were more than twice the licence fee. The assessee did not furnish details of sealing charges, transportation charges and many other incidental expenses. The Assessing Officer, after taking into consideration and in obedience to the direction given by the Inspecting As....