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TMI Blog2014 (10) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... r, he refused to act on the profits shown in the said returns. No reasons are given for not relying on the said profits at the same time, he has also not taken into consideration the comparable cases in similar business to come to the conclusion. Without any basis, the assessing authority determined the profit at 8%, the first appellate authority reduced it to 3% and the tribunal has reduced it to 2.5%. In coming to the said finding, all the three authorities have declined to take note off the evidence by way of earlier returns. In that view of the matter, what the authorities have done is a mere guess work and without any basis. That is not permissible in law as held in the case of RAGHUBAR MANDAL HARIHAR MANDAL vs THE STATE OF BIHAR [1957 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion after claiming various expenses amounting to ₹ 53,15,55,168/-. In order to verify the genuineness of the expenditure claimed by the assessee various details were called for. Since the assessee could not furnish the details before the AO, he came to the conclusion that either the assessee has not having/maintaining the books of accounts and supporting vouchers/bills towards various expenditure claimed or that the same were not produced inspite of several opportunity given to the assessee. Therefore, he held he is not satisfied with the correctness and genuineness of the accounts of the assessee. Therefore, he proceeded to complete the assessment under Section 144 of the IT Act and estimated the income of the assessee at 8% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of justice if the business income is restricted to 2.5% of the total turnover. Aggrieve d by the said finding, the assessee has preferred this appeal. 4. Learned counsel for the assessee assailing the impugned order contended the assessee has maintained accounts. They have all been duly audited. Even the auditor's report is field under Section 44AB. The assessing authority as well as the appellate authority do not dispute the total turnover furnished by the assessee. They act on the same but they decline to take note off the profit declared by the assessee for the last five years which works to less than 1% of the total turnover. Ignoring the same, the assessing authority determined the income at 8% whereas the appellate authority withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced five years returns. It is from that they took the turnover because the turnover offered by the assessee for the year 2009-10 was comparable with the past five years turnover as reflected in the returns filed. They acted on that. However, he refused to act on the profits shown in the said returns. No reasons are given for not relying on the said profits at the same time, he has also not taken into consideration the comparable cases in similar business to come to the conclusion. Without any basis, the assessing authority determined the profit at 8%, the first appellate authority reduced it to 3% and the tribunal has reduced it to 2.5%. In coming to the said finding, all the three authorities have declined to take note off the evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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