Ajit K.Sengupta, J. - (1.) In this reference under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1982-83, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the addition of Rs. 31,056 ?"
(2.) Shortly stated, the facts are that the assessee is a wholesale dealer in solid spices. The total turnover for the assessment year 1982-83 was shown at Rs. 9,46,817 with a gross profit of Rs. 63,628 and the rate disclosed was 6-7 per cent. The Income-tax Officer has found that although the books of account were maintained, no day-to-day stock analysis was found. The Income-tax Officer also cited a comparable case of a dealer who, according to him, had dealt in 1982-83 in powder spices as well as in solid spices and had shown 23.2 per cent. gross profit for powder spices and 22.2 per cent. for solid spices. The Income-tax Officer, basing his judgment on the said case, had rejected the book version of the profit of the assessee and applied a flat rate of 10 per cent. over the total turnover disclosed and added a sum of Rs. 31,056.
(3.) Against the said addition, the assessee preferred an appeal before the Deputy Commissioner (Appeals) who deleted the addition by observing as follows : "I have considered the contention of the appellant and the reasons recorded by the Income-tax Officer. On the facts and circumstances of the case, it will be fair and reasonable to delete the addition of Rs. 31,056.";