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1970 (2) TMI 149
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....DGMENT Authored By : G.K. Mishra, Sachidananda Acharya G.K. Mishra, C.J. 1. The question referred to this court under Section 24(1) of the Orissa Sales Tax Act runs thus:- Whether the Tribunal is justified in rejecting the books of account merely on the ground of low percentage of profit when the accounts otherwise have no defects ? The account books were rejected by the Assis....
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....d to be not genuine merely because the margin of profit is low. 3. The view taken by the Tribunal is shocking to commonsense. When account books are produced, it is for the taxing authority to give valid reasons for declaring them to be either false or to be not maintained properly. Whether the margin of profit is high or low would depend on very many circumstances. It may be that there are man....
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.... there is material to lead him to the conclusion that there is something false in the account books. We respectfully agree with the aforesaid observation. 4. The matter would be clear if we keep in view the observations of the Supreme Court in Commissioner of Income Tax v. A. Raman & Co In that case, their Lordships expressed their views as to whether an assessee can resort to evasion ....
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.... may resort to a device to divert the income before it accrues or arises to him. Effectiveness of the device depends not upon considerations of morality, but on the operation of the Income Tax Act. Legislative injunction in taxing statutes may not, except on peril of penalty, be violated, but it may lawfully be circumvented. The aforesaid passage throws no light directly on the question in issu....