Binding precedent remains operative despite pending challenge, supporting deletion of interest disallowance when debt is converted into preference sha...
Best-judgment assessment may be used where books of account are not maintained and required information is not furnished, but business-profit estimation must remain fair, unbiased and rational. Profit rates cannot be adopted capriciously or without supporting facts; they should be based on the taxpayer's past history or comparable businesses in the same line of trade. Where the adopted rates lack such a disclosed basis, the profit estimation requires reconsideration. Net profit must be freshly determined with reference to relevant comparables or past results after affording the taxpayer an opportunity of hearing.
Best-judgment assessment may be used where books of account are not maintained and required information is not furnished, but business-profit estimation must remain fair, unbiased and rational. Profit rates cannot be adopted capriciously or without supporting facts; they should be based on the taxpayer's past history or comparable businesses in the same line of trade. Where the adopted rates lack such a disclosed basis, the profit estimation requires reconsideration. Net profit must be freshly determined with reference to relevant comparables or past results after affording the taxpayer an opportunity of hearing.
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
TaxTMI 
of 4908 
