1967 (4) TMI 38 - HC - Income Tax

Income from two sources of business, a cinema business and a labour contract business, was considered for the purpose of assessment, for all the years except the assessment year 1962-63, when the labour contract business was discontinued - petitioner did not produce any books of account in respect of either business - estimated the income from each source - petitioner s appeal dismissed

Summary

Issues: Assessment of income from two sources of business, challenge to assessments in appeal, reduction of income estimates by Appellate Assistant Commissioner, revision applications to Commissioner of Income-tax, relief allowed by Commissioner, petitioner's contention of lack of personal hearing, reliance on prejudicial material, arbitrariness in orders, lack of reasons disclosed in orders.

Analysis:
The petitioner was assessed for income-tax for multiple assessment years based on income from cinema and labour contract businesses. The Income-tax Officer estimated income due to lack of account books, using 30% profit for cinema and 12.5% for labour contract. Appellate Assistant Commissioner reduced profit rates and income estimates citing comparable cases. Commissioner of Income-tax further reduced income estimates after petitioner's revision applications. The petitioner challenged the orders in certiorari.

The first contention was the lack of a personal hearing opportunity, deemed baseless by the court. The Income-tax Act does not mandate a personal hearing for revision applications. Precedents were cited to support this view. The second contention was reliance on prejudicial material without petitioner's chance to address it. The court found no evidence of such reliance in the orders. The third contention was arbitrariness and lack of reasons in the orders. The court noted that the Commissioner considered petitioner's contentions and reduced income based on business nature. While the language used was general, it did not indicate lack of consideration. The affidavit filed by the petitioner lacked proper verification, making it inconclusive.

The court dismissed the petition, stating no jurisdictional issues or manifest legal errors were present. The connected petition was also dismissed for similar reasons. Costs were imposed. The judgment upheld the Commissioner's decisions and clarified the petitioner's misconceptions regarding procedural rights and order justifications.