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Issues involved: The judgment involves the question of law regarding the Tribunal setting aside the order of the Appellate Assistant Commissioner regarding the item of Rs. 35,224 in an income tax case for the assessment year 1972-73.
Summary: The High Court of Madhya Pradesh was tasked with deciding whether the Tribunal was correct in law in overturning the Appellate Assistant Commissioner's order concerning the item of Rs. 35,224 in an income tax case for the assessment year 1972-73. The assessee, a firm engaged in transporting and loading goods, declared a loss of Rs. 35,224 from plying its own trucks alongside a net income of Rs. 1,32,209 from executing contracts. The Income-tax Officer rejected the books of account and estimated the income from the assessee's trucks at Rs. 5,117, resulting in an addition of about Rs. 40,000. The Appellate Assistant Commissioner accepted the claim of loss of Rs. 35,224, but the Tribunal reversed this decision, leading to the present reference. The Tribunal's decision was challenged by the assessee, arguing that the reversal of the Appellate Assistant Commissioner's finding was unjustified. However, the High Court upheld the Tribunal's decision, noting that the Tribunal provided detailed reasons for its conclusion based on the rate applied in earlier assessments. The rejection of the assessee's books of account was not disputed, making the application of the profit rate a factual matter. The High Court found no justification to overturn the Tribunal's finding and ruled in favor of the Revenue, stating that the Tribunal was justified in setting aside the Appellate Assistant Commissioner's order regarding the item of Rs. 35,224. Therefore, the reference was answered against the assessee, and in favor of the Revenue, with no order as to costs.
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