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TMI Blog2020 (6) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... n 260A of the Act, only on the 'substantial question of law' arising from the order of the learned Appellate Tribunal. But we see glaring perversity in the assessment order itself. The alleged 'market standards' adopted by the assessing authority to jack up the net profit from 1.56% on turnover declared by the Assessee to 8% seems to have been made without any basis whatsoever. There is not even an iota of evidence or reference, to any material or any parallel case referred by the assessing authority to adopt such rate of 8% of turnover. Even grounds or alleged discrepancies which permitted the assessing authority did not appear to be sufficient to reject the books of accounts. Arbitrarily assessed income tax by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the revision order u/s.263 solely on the ground that the finding was based on Audit Objection? 2. Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was correct in holding that the order u/s.263 is bad in law, without appreciating the fact that Assessment Order u/s.143(3) is erroneous and prejudicial in nature in as much as the depreciation and interest were allowed as deduction after estimation of income thereby allowing double deduction to the assessee?' 2. The learned Tribunal has set aside the revisional order passed by the learned Principal Commissioner, Income Tax, under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the business of clearing and forwarding agent, declared its profit at the rate of 1.56 % and produced the regular books of accounts for verification before the Assessing Authority, who found that there was some discrepancies in the books of accounts maintained, and therefore he resorted to best judgment by adopting 'market standards' and applied 8% rate of profit as income from business and thereafter, allowing deduction on interest and depreciation, computed the net income. The assessment even then resulted in refund of tax on account of excess TDS made by the Awarder of the contract. 4. Even this best assessment order was found to be erroneous by the learned Principal Commissioner of Income Tax under Section 263 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore submitted that the learned Tribunal could not have set aside the said revisional order under section 263 of the Act, passed by the Commissioner. 8. Per contra, the learned counsel appearing for the Assessee Mr. A.S.Sivaraman submitted that the Assessing Authority was not justified in raising the income from 1.56 % of turnover declared by the Assessee to 8% without bringing on record any evidence for supporting such adoption of 8% of net profit. He further submitted that whether the Assessee filed any first appeal against the assessment order is not within his knowledge. He however supported the order passed by the Tribunal and urged that it is a finding of fact and no question of law arises from the order of the Tribunal. 9. Havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Forwarding business is 1.56%. Therefore to verify the assessee company was asked to produce ledgers and supporting Bills/Vouchers for the expenses related to labours handling and others. The same was produced and on verification the following discrepancies were observed: 1. Bills/vouchers pertaining to the labour charges were self made and made in cash. 2. Applicability of TDS for the labour charges was also discussed. 3. Bills/vouchers pertaining to the Freight Handling were also not properly vouchers. 4. To make short for all these discrepancies, since as per market standards 8% profit is nominal in this line of business, the profits of the assessee company is recomputed at 8% as under: Turnover o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely in favour of Revenue, (God Knows How??) was found to be erroneous and prejudicial to the interest of Revenue by the learned Commissioner and that is beyond our comprehension. Therefore, the entire exercise of the fact finding in the form of estimation of income under the powers conferred upon the Assessing Authorities to make best judgment assessments, where the books of accounts are validly rejected, does not seem to have been adopted by the authorities below. We cannot countenance such an approach on the part of the revenue authorities of the Act. 12. Therefore, we are inclined to set aside all the three orders passed in the matter in for the AY 2011-12, in the case of the Assessee, namely assessment order dated 13.3.2014, the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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