Fair opportunity in profit estimation requires disclosure of comparable cases before sustaining an income addition.

An addition to income estimated from external comparable cases cannot be sustained unless the assessee is first given a fair opportunity to inspect those comparables and show that they are not truly comparable or are otherwise inapplicable. The principle of fairness requires disclosure of the material relied upon for estimating gross profits, and the appellate authority must consider any objection that the assessee had no chance to meet that material. Where the Tribunal sustains the entire addition without addressing that objection, the order is unsustainable in law.

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Issues: Whether the Appellate Tribunal was justified in sustaining the entire addition made to the assessee's gross profits on the basis of comparable cases without first giving the assessee an opportunity to examine and meet those cases.

Analysis: The assessment had been made by estimating profits under the proviso to section 13 of the Income-tax Act, 1922 on the footing of comparable cases. The material showed that the assessee had specifically contended before the appellate authorities that those comparable cases had not been put to him and that he had no opportunity to show that they were not truly comparable. The principle applied was that where an estimate of income is based on external comparable instances, fairness requires that the assessee be informed of those instances and be given an opportunity to demonstrate their inapplicability or dissimilarity. The record disclosed no consideration of this objection by the Tribunal.

Conclusion: The Tribunal was not justified in sustaining the entire addition without affording the assessee such an opportunity, and its order was therefore unsustainable in law.

Ratio Decidendi: An addition to income based on comparable cases cannot be sustained unless the assessee is given a fair opportunity to inspect and controvert the comparable material relied upon for estimation.

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