2009 (8) TMI 749 - HC - Income Tax

Estimate of income - Gross profit - Assessee failing to produce books of account - AO assessing income at 5% pg gross receipts - Tribunal modifying to 4% pf gross receipt - Justified - assessment for previous year a guide not binding for subsequent years

Summary

The High Court Punjab and Haryana High Court, in the 2009 (8) TMI 749 case, heard an appeal under section 260A of the Income-tax Act, 1961. The case involved an assessee who was a manpower supplier and failed to produce books of account during assessment. The Assessing Officer initially assessed income at 5% of gross receipts, which was later modified by the Tribunal to 4% of gross receipts. The Commissioner of Income-tax (Appeals) had previously held that the book results of the assessee should have been accepted. The Tribunal, however, disagreed and held that the Commissioner was not justified in interfering with the assessment in the absence of produced books of account. The Tribunal reduced the assessed income to 4% of the turnover, despite the fact that the assessee had disclosed a gross profit of 6.45%. The High Court dismissed the appeal, stating that the rate of 4% turnover was not arbitrary and depended on the facts of each case. The court emphasized that the assessment for the previous year was not binding for subsequent years and that the judgments cited were based on individual fact situations. Overall, the appeal was dismissed, and no substantial question of law was deemed to arise.