Law:

Section:

Section 143 of the Income-tax Act, 1961 - Assessment - Additions to income - Assessment years 1975-76 to 1977-78 - Assessee was carrying on business in potatoes and onions as wholesale dealer - While framing assessment ITO held that account books maintained by assessee were unreliable - He, therefore, made additions to income disclosed by assessee by applying a G.P. rate of 7.5 percent on estimated sales - On second appeal, Tribunal directed ITO to apply a G.P. rate of 6 percent on declared sales of assessee - On instant reference, assessee contended that in view of provisions of Madhya Pradesh Essential Articles (Exhibition of prices and Price Control) Order 1973, it could not have obtained higher rate of profit as estimated - Whether in view of fact that assessee itself had shown profit at more than 2 percent in some years in spite of provisions of Control Order providing for sale at a price not exceeding a margin of 2 percent for wholesale dealers, Tribunal was justified in applying a G.P. rate of 6 percent on sales for respective years - Held, yes FACTS The assessee-firm was carrying on a business in potatoes and onions as a wholesale dealer. While framing assessment for the relevant assessment years the ITO held that the account books maintained by the assessee were unreliable. The ITO, therefore, made additions to the income disclosed by the assessee by applying a G.P. rate of 7.5 percent on estimated sales. On appeal, the AAC partly allowed the appeal by reducing the G.P. rate to 6 percent. On further appeal, the Tribunal directed the ITO to apply a G.P. rate of 6 percent on the declared sales of the assessee. On instant reference, the assessee contended that the Tribunal failed to take into consideration the provisions of the Madhya Pradesh Essential Articles (Exhibition of Prices and Price Control) Order, 1973. It was urged that in view of the provisions of the control order, the assessee could not have obtained the higher rate of profit as estimated. HELD The Tribunal took into consideration the fact that the assessee itself had shown profit at more than 2 per cent in some years in spite of the provisions of the Control Order providing for sale at a…

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