2002 (2) TMI 60

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..... year ending March 31, 1979, seven items of work for the MED in Cochin, Sri Harikkotta at Trivandrum and Goa. According to the assessee daily statements of the receipts and expenses at each of the sites with all available vouchers were sent to the office of the firm and from these statements and vouchers a cash book and ledger for each item of work was written up. A consolidated profit and loss account as well as the balance-sheet was drawn up from these books and filed with the return of income together with the necessary schedules. Subsequently, the assessee produced these statements and books before the Income-tax Officer. After examining the records, the Income-tax Officer found that the books are written at a stretch and no contemporar .....

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..... Striking a just and fair balance, I would hold that the assessee had neither made any profit nor incurred any loss in respect of the contract business carried out during the period relevant to the assessment years 1979-80 and 1980-81. In this view of the matter, the business results for the two years under appeal will be taken as nil." The assessee and the Department filed second appeals before the Tribunal. The Tribunal, by its order dated July 31, 1989, allowed the Department's appeal and dismissed the assessee's appeal. I.T.R. No: 162 and 163 of 1998 are before us at the instance of the assessee. The question referred for our consideration is the following: "Whether, on the facts and in the circumstances of the case, the Income-tax A .....

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..... ars which were not acceptable to the Department and the matter was taken before the Settlement Commission. It is not disputed by the petitioner that the Settlement Commission adopted the profit rate of more than 10 per cent. It is true that the Commissioner of Income-tax (Appeals) recorded certain findings in favour of the petitioner accepting the plea that it did not make any profit. In his opinion the case of the assessee that it incurred loss cannot be brushed aside as irrelevant. Having regard to the delay in completing the work, the appellate authority found that cost increase without corresponding rate increase indicated that the assessee did not earn any profit for the assessment years 1979-80 and 1980-81. We are unable to agree with .....

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