1974 (12) TMI 19

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..... e Income-tax Officer rejected the books of account and estimated the assessee's income by applying a flat rate, at Rs. 39,344. He also disallowed certain expenses and took into account a cash credit which was surrendered by the assessee. On appeal, the Appellate Assistant Commissioner reduced the assessable income to Rs. 35,947. Subsequently, penalty proceedings were drawn up and ultimately th .....

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..... profit added to the trading result. The department has not established that the addition made would be the real income. The mere fact that the estimate made by the Income-tax Officer has been revised downward by the Appellate Assistant Commissioner would show that the estimate is, after all, an estimate and by no means represents the real income of the assessee. The addition to the trading accoun .....

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..... e to the turnover no question of penalty under section 271(1) would arise. This court held that no such legal presumption could be raised. The question depends upon the facts and circumstances of each case. This court directed the Tribunal to apply its mind to the facts of the case and find whether there was gross negligence or wilful default or fraud on the part of the assessee. In the present ca .....

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