- (1.) THESE two appeals under s. 260A of the IT Act (hereinafter referred to as the 'Act') are directed against the order of
(2.) THE brief facts of the cases giving rise to the present appeals are that the appellant (hereinafter referred to as the 'assessee') was a registered firm and running the business of manufacturing and sale of Bidi with trademark as Nisar Biri Sikka No. 1.
(3.) FOR the asst. yr. 1993 -94, the assessee had filed return showing income of Rs. 15,314. The disclosed sale of Bidi was at Rs. 75,18,825 and the GP rate was shown at Rs. 4,62,635 and the percentage of gross profit was 6.15 per cent. The assessing authority has accepted the sale figure but rejected the books of account after applying the provisions of s. 145 (1) of the Act and applied GP rate of 10.5 per cent, which was applied in the asst. yr. 1992 -93 and made an addition towards extra profit at Rs. 3,27,490 The CIT(A) allowed the appeal in part and reduced the GP rate by 1 per cent. Being aggrieved by the order, the assessee filed an appeal before the Tribunal. The Tribunal allowed the appeal in part and reduced the GP rate to 8.5 per cent. The Tribunal has confirmed the rejection of books of account on the ground that more than 2/3rd amounts of expenditure have been incurred by the assessee in payment of labour wages and those were not completely verifiable because admitted case of the assessee was that there were self -prepared vouchers which were signed by the labours and in certain cases thumb impressions were obtained.;