9911796707
TMI Blog1990 (9) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1974-75. During this assessment year, the assessee disclosed a turnover of Rs. 16,50,076 and gross profit of Rs. 56,571. Since, according to the Income-tax Officer, certain expenses which ought to have been adjusted in the profit and loss account had been wrongly adjusted in the manufacturing/trading account, he readjusted the gross profit at Rs. 39,264. Further, according to the Income-tax Officer, the readjusted gross profit was too low and so, he called for an explanation from the assessee to explain the reasons for the same. According to the assessee, the main reason for the low gross profit was sales of rice effected to the Government as levy at statutorily fixed procurement prices which are much low as compared to market p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Officer is not satisfied about the correctness or the completeness of the accounts of the assessee, still while resorting to a best judgment assessment for determining the income by estimate, it is obligatory on his part to disclose the basis for the same. At the same time, it is not permissible on the part of the assessing authority to act on mere suspicion, surmises and conjectures. If no legally acceptable basis could be traced out in the order making the best judgment assessment or determining the estimated income, then, in law, such determination of income cannot be sustained. In the case of State of Orissa v. Maharaja Shri B. P. Singh Deo[1970] 76 ITR 690 (SC), while dealing with an assessment made under the Orissa Agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time to time, which are made under the Essential Commodities Act, 1955, would show that the procurement prices are paid to the dealers only after ascertaining the quality of the rice supplied by them. There is nothing on the record to show that the Enforcement Officer, under the levy orders, had accepted inferior quality of rice from the assessee so as to unlawfully enrich him. Any presumption of the nature envisaged by the Income-tax Officer will be contrary to the maxim omnia praesumuntur rite et solemniter esse acta (all acts are presumed to have been rightly and regularly done). In this view of the matter, there was no occasion on the part of the Tribunal to agree with the views of the income-tax authority and sustain the additions i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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