Book results rejection and profit estimation under Section 145(1) applied using past performance and comparative figures.

The proviso to Section 145(1) of the Income-tax Act was treated as applicable where the book results were found unreliable, permitting rejection of the accounts and estimation of income. In making a fair estimate, the tax authorities relied on the assessee's past performance, earlier assessment years, and comparative turnover and net profit figures as benchmarks. On that basis, net profit was estimated at Rs. 25,000, resulting in partial relief to the assessee.

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Issues: Whether the proviso to Section 145(1) of the Income-tax Act, 1961 was attracted so as to justify rejection of the book results and estimation of net profit, and if so, what would be a reasonable estimate of the assessee's income.

Analysis: The book results were accepted by the tax authorities as unreliable and the proviso to Section 145(1) was held applicable. The assessee's past performance and the results for earlier assessment years were taken into account, and the comparative turnover and net profit figures for those years were used as guidance in fixing a fair estimate.

Conclusion: The proviso to Section 145(1) was held to be attracted, and the net profit was reasonably estimated at Rs. 25,000, thereby giving partial relief to the assessee.

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