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TMI Blog2021 (4) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years 2012-13 to 2019-20 and we find that the net profit ratio to turnover in percentage ranges between 2.86% and 3.42%. Further, from the assessment order for the year 2017-18, it is seen that the Assessing Officer adopted 3.16% and held the same to be reasonable and completed the assessment by order dated 21.12.2019. Thus, we find that the Tribunal committed an error in reversing the order passed by the CIT(A) and restoring the order of the Assessing Officer. The tax case appeals are allowed and the order passed by the Tribunal is set aside and the substantial questions of law are answered in favour of the appellant/assessee. - Tax Case Appeal Nos.417 & 419 of 2019 And C.M.P.Nos.21373 & 21375 of 2019 - - - Dated:- 29-3-2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic sustainable finding or reason for such rejection? 3. We have elaborately heard Mr.G.Baskar, learned counsel for the appellant and Mrs.S.Premalatha, learned Junior Standing Counsel appearing for the respondent-Revenue. 4. The short which falls for consideration is whether the Tribunal was justified in restoring the best judgment assessment made by the assessment order in fixing the net profit at 8% of the total receipts. The reason for doing so is by placing reliance on the decision of the Division Bench of this Court in the case of Commissioner of Gift Tax Vs. A.Vajjiram Bros. [(2010) 326 ITR 551] . 5. Admittedly, the assessee did not cooperate in the assessment by producing certain labour registers, which was called for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous assessment year. As rightly pointed out by the learned counsel for the appellant, the decision in A.Vajjiram Bros. was taken note of and the applicability of Section 44AD of the Act was considered by the Division Bench of this Court in K.Kannan Vs. Assistant Commissioner of Income-Tax, Circle-I [(2013) 39 taxmann.com 10 (Madras)] . The operative portion of the judgment reads as follows: 6. A reading of Section 44 AD of the Income Tax Act, 1961 shows that notwithstanding anything to the contrary contained in Section 28 to 43C, in the case of eligible assessee having business with a gross receipts not exceeding ₹ 40 lakhs, the assessee would be assesed on a presumptive basis, to be taxed at 8% on the total turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals filed by the assessee, the Commissioner of Income Tax (Appeals) mainly scaled down such estimate for the reason that in the earlier assessment year 2005-2006, 3.69% of turnover was considered to be appropriate for completing the assessment. The Income Tax Appellate Tribunal held that 8% of the gross receipts would be a justifiable assessment even by way of best of assessment. Thus, the Tribunal restored the order of the Assessing Officer. In so holding, the Tribunal further held that while so fixing the income at 8% of the gross receipts, the claim of the depreciation be allowed thereafter. However, after granting the depreciation if the income goes below, then the Assessing Officer shall assess the income at the returned level itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the preceding year, assessing the income at high rate of 8% was not called for. In the circumstances, as a via-media the Commissioner of Income Tax (Appeals) fixed it at 5%. 9. Thus in the background of the facts considered by the Commissioner of Income Tax (Appeals) and in the context of the assessee not maintaining any books of accounts or filing profit and loss account and balance sheet, the assessee felt satisfied that the relief granted by the the Commissioner of Income Tax (Appeals) fixing the assessable income at 5% was acceptable to it. Consequently no appeal was filed thereafter by the assessee before the Tribunal. 9. Before us, the appellant has filed a chart showing a comparison of the figures for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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