1981 (8) TMI 104

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....ared to the rate of 14 per cent declared by the assessee for the immediately preceding assessment year and the rate of 8 per cent to 8.5 per cent declared by the assessee in certain earlier years. 2. The assessee explained that the fall in the rate of gross profit was due to the fact that due to a fall in the demand of its goods, the goods were sold at lower rates. The ITO did not accept this explanation and accordingly estimated the trading profit of the assessee by applying the rate of 8 per cent to the declared turnover, thus making an addition of Rs. 14,605 to the book profits shown by the assessee-firm. 3. Before the AAC the assessee contended that the assessee-firm was carrying on business in salt on wholesale basis. It had furn....

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.... Rep., on the other hand, relied on the orders of the ITO and the AAC. He also challenged the correctness of the contention by the ld. counsel for the assessee that as the ITO did not find any particular flaw in the accounts of the assessee, he was bound to accept the profit disclosed in the accounts. In support of his contention, he placed reliance on the decision of the Punjab High Court in 53 ITR 335. 7. We have considered the rival submissions and the facts and circumstances of the case. We agree with the ld. counsel for the assessee that, having regard to the various factors pointed out by him, there was no justification for making any addition to the trading profits shown by the assessee-firm. The decision of the Punjab High Court ....