physical stock of goods found on actual counting and measurements were recorded. The accounts and other documents were called for for verification. However, the statement of accounts produced was not accepted as true and complete and one of the reasons stated is that no sale bill was seen issued from the place of incidence. It is also stated that day book, ledger, sale book etc., were not produced either at the time of inspection or at the time of verification of the books of accounts. On Verification of the statement of accounts, it was revealed that the gross profit reported was 41.32%. On verification of some of the bills recovered, it was disclosed that the average rate of gross profit was 80%. In such circumstances, after completing the procedural formalities, the Intelligence Officer added 80% towards the purchase price of the goods sold during the relevant period and on that basis the sales turnover was estimated. Accordingly, double the amount of turnover tax on the suppressed turnover of sales was imposed as penalty under Section 45A of the Act and the said proposal was confirmed by the impugned order. In appeal, the appellate authority reduced the gross profit to 50%. This was confirmed by the Tribunal also.
