Profit rate estimation in best judgment assessment raised no question of law where the Tribunal's factual evaluation prevailed.

A challenge to the Tribunal's refusal to interfere with the profit rate adopted in a best judgment assessment turned on appreciation of evidence and the factual basis for estimating profits. The Tribunal relied on the assessee's own past history and found that the comparables cited by both sides did not provide a reliable benchmark in the circumstances. Because no error of law was shown in that factual evaluation, no statable question of law arose. An application under Section 256(2) of the Income-tax Act, 1961 was therefore not maintainable on that ground.

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Issues: Whether, on the facts of the case, any statable question of law arose from the Tribunal's order declining to interfere with the profit rate adopted in the best judgment assessment.

Analysis: The Tribunal had assessed the profits by reference to the assessee's own past history and had treated the comparables relied upon by both sides as not furnishing a proper basis in the circumstances. The challenge therefore related to the appreciation of material and the basis adopted for estimating profits. Such a determination was one of fact arising from evaluation of evidence, and no error of law was shown in the Tribunal's approach.

Conclusion: No statable question of law arose, and the application under Section 256(2) of the Income-tax Act, 1961 was not maintainable on that ground.

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