1993 (7) TMI 51

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... essee's method was shown ? (2) Whether, on the facts and in the circumstances of the case, the reopening of the assessment under section 147(b) was valid ?" The assessee is a building contractor. It had entered into contracts with Ashishnagar Society, Amit Society and Ankoor Society in the year 1966. It had also entered into contracts with Arunesh Society part I and Arunesh Society part II in the financial year relevant to the assessment year 1970-71. In the return filed for the assessment year 1970-71, the assessee described the 1966 contracts as old contracts and the other two as new contracts. It had filed a consolidated trading account and profit and loss account disclosing Rs. 1,35,262 as total income. The Income-tax Officer notice .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... losing its total income at Rs. 1,35,262. The Income-tax Officer computed the gross profit in respect of the contract of Ashishnagar Society at 15 per cent. and added Rs. 26,216 to the income and assessed the tax accordingly. The assessee then preferred an appeal before the Appellate Assistant Commissioner. The contention which was raised on behalf of the assessee was that the Income-tax Officer had all the details before him while making the original assessment for the first time and, therefore, it was not open to him to review the whole question afresh and single out one of those three old contracts and take the view that, in respect of that contract, the gross profit should be estimated at the rate of 15 per cent. This contention found fa .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... essment. But, as we have pointed out above, the Income-tax Officer doubted the correctness of the accounts maintained by the assessee and, therefore, without adopting the account books as the basis, he estimated the profit on the basis of the margin of profits normally earned by persons in such types of business and the rate of profit earned by the assessee in the previous years. Thus, the Income-tax Officer had not considered this material while estimating the profit of the old contracts at 12 per cent. Since the Income-tax Officer had not considered the said material, it had not come to his notice that the account books of the assessee showed that in respect of the contract of Ashishnagar Society, the assessee had earned profit at the rat .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X