https://www.taxtmi.com/caselaws?id=6871 Estimation of profits under the proviso to section 13 must be a judicial, material-based exercise of discretion requiring relevant evidentiary support and principled calculation; where books are rejected the revenue may estimate profit only if correct profits cannot be deduced, but arbitrary uplift is impermissible. The Tribunal's use of subsequent years' gross profit rates and exclusion of lot sales to derive an arithmetical margin was permissible, but its additional uplift (producing the contested add-back) lacked articulated material and amounted to conjecture, so the extra add-back could not be sustained while the arithmetical exclusion-based calculation could stand. en-us Tue, 02 May 1967 00:00:00 +0530 Fri, 06 Feb 2009 18:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6871 Estimation of profits under the proviso to section 13 must be a judicial, material-based exercise of discretion requiring relevant evidentiary support and principled calculation; where books are rejected the revenue may estimate profit only if correct profits cannot be deduced, but arbitrary uplift is impermissible. The Tribunal's use of subsequent years' gross profit rates and exclusion of lot sales to derive an arithmetical margin was permissible, but its additional uplift (producing the contested add-back) lacked articulated material and amounted to conjecture, so the extra add-back could not be sustained while the arithmetical exclusion-based calculation could stand. Case-Laws Income Tax Tue, 02 May 1967 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6871