Tribunal grants Assessee appeal on profit estimation and interest income taxability, orders fresh assessment.

The Tribunal allowed the Assessee's appeal for both issues: the estimation of net profit and the taxability of interest income. The Tribunal directed a fresh assessment based on the now available statutory audit report and the new evidence regarding the nature of the interest income. The decision emphasized the importance of considering all relevant evidence and providing sufficient opportunity for the Assessee to present its case.

---

---

Issues:
1. Estimation of net profit for assessment.
2. Treatment of interest income as taxable.

Estimation of Net Profit:
The appeal was against the order passed for the quantum of assessment under section 143(3) for the A.Y. 2007-08. The Assessee challenged the estimation of net profit by the Commissioner of Income Tax (Appeals) and the rejection of books of accounts invoking section 145 of the Act. The Assessee argued for the acceptance of provisional financial statements due to the non-completion of statutory audit beyond its control. The assessing officer estimated income at 30% of gross receipts based on a comparable case, while the Assessee contended for a 20% net profit ratio based on past years' performance. The Tribunal allowed the appeal, directing a fresh assessment based on the now available statutory audit report for the relevant financial year.

Taxability of Interest Income:
The assessing officer treated interest credited to the grant-in-aid account as income chargeable to tax, contrary to the Assessee's claim that it was not income but part of the grants received. The Commissioner (Appeals) dismissed the Assessee's ground based on a previous Tribunal decision. However, new evidence in the form of an office memorandum from the Government of Maharashtra clarified the nature of the interest income. The Tribunal admitted this additional ground and remitted the matter back to the assessing officer for a fresh decision considering the new evidence and other material on record. The Tribunal allowed the appeal for statistical purposes.

In conclusion, the Tribunal allowed the Assessee's appeal for both issues: the estimation of net profit and the taxability of interest income. The Tribunal directed a fresh assessment based on the now available statutory audit report and the new evidence regarding the nature of the interest income. The decision emphasized the importance of considering all relevant evidence and providing sufficient opportunity for the Assessee to present its case.

---