1984 (10) TMI 60

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....e assessee was a manufacturer and seller of hosiery cloth. It was conceded before him by the counsel for the assessee that the defects as pointed in the assessment order for the asst. yr. 1977-78 existed even in the year under appeal inasmuch as the consumption of raw materials with reference to the finished products was not verifiable. The ITO that the expenditure on raw materials had gone up tre....

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....mitted before me a copy of the assessee's letter dt. 9th Oct. 1984 addressed to the AAC. In this letter it was pointed out that while in the asst. yr. 1977-78 the margin of profit to the assessee on the cloth was Rs. 3.05 per kg., it came down to Rs. 2.19 per kg. in the year under appeal. The latter states that if this fact was taken into consideration, than the gross profit declared by the assess....

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....his fact requires enquiry. Further, the ITO has not dealt with the assessee's claim that in terms of sales of yarn there was reduction in the profit. This point was no doubt brought to the notice of the AAC by the assessee's letter dt. 9th Oct. 1984 referred to above but then he also did not deal with it and merely confirmed the addition of Rs. 25,000 on the ground that there was unexplained fall ....