TaxTMI 
TaxTMI 
2005 (11) TMI 38
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....91, by the Income-tax Officer ("the ITO", for short). As the petitioner did not file the return as required under the said notice, the Income-tax Officer completed the ex parte assessment vide orders dated March 23, 1993, for the assessment years 1989-90 and 1990-91. The Income-tax Officer exercising the jurisdiction under section 144 of the Act made best judgment assessment accepting the turnover of the petitioner reflected in the said survey report dated March 7, 1991, (annexure R-1), and assessed income of Rs. 33,700 for the year 1989-90 and worked out a total demand of Rs. 16,880 and assessed income of Rs. 40,000 for the year 1990-91 and worked out a demand of Rs. 13,688. Feeling aggrieved by the said orders of assessment, the petiti....
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....ction 148 of the Act was issued to the petitioner. The petitioner did not file any return. Again a notice under section 142(1) of the Act was issued to him on January 16, 1992, but he did not appear. However, the petitioner was issued another notice to show cause as to why ex parte assessments be not made, even then the petitioner neither appeared nor filed any reply. Accordingly, the best judgment assessments were made. He contended that the turnover of the petitioner was determined on the basis of information collected under section 133B of the Act on Form No. 45D which is signed by the petitioner himself. As per the said information submitted by the petitioner, which was on the basis of sales tax record his sale for the assessment year 1....
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....H. M. Abdulali [1973] 90 ITR 271 (SC); AIR 1973 SC 2266; CST v. Rajaram Sitaram Soni [1987] 65 STC 367 (MP). In the case of Ganga Prasad Sharma [1981] 132 ITR 87 (MP) return was filed by the assessee on estimate basis by computing the profit at a flat rate of 10 per cent, on gross receipts. The Assessing Officer computed the net profit at 15 per cent. The Commissioner affirmed the said order of the Assessing Officer by observing that in view of the business, the estimate of net profit of 15 per cent, appears reasonable. The Division Bench of this court found that neither the Income-tax Officer nor the Commissioner has referred to any material for applying the flat rate of 15 per cent, while estimating the net profits and therefore the es....
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.... adopted in estimating the turnover and the estimate made. If the basis adopted is a relevant basis, even though the court may think that it is not the most appropriate base, the estimate made by the assessing authority cannot be disturbed. In State of Orissa v. Fancy Motors Accessories Agency [1988] 69 STC 34, the High Court of Orissa held that since the jurisdiction of the Tribunal was quite different from that of the High Court under a reference, the High Court would not interfere, where the Tribunal had enhanced the gross turnover by a particular sum which appeared to it to be reasonable and best in its judgment. The Tribunal as the final court of fact had full authority in law to intervene and make its own assessment of the facts in ex....
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....t there is no good proof in support of that estimate is immaterial. Prima facie, the assessing authority is the best judge of the situation. It is his best judgment and not any one else's. The High Court cannot substitute its best judgment for that of the assessing authority. In the case of CST v. Rajaram Sitaram Soni [1987] 65 STC 367 (MP), the High Court followed the judgment passed in the case of CST v. H.M. Esufali, H.M. Abdulali [1973] 90 ITR 271 (SC). Having considered the rival contentions of the parties, and the case law referred to above, the petitioner's challenge to the total estimated sales taken by the Assessing Officer is not sustainable. The said estimated sales taken by the Assessing Officer was based on the information f....
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....of this court in the case of Ganga Prasad Sharma [1981] 132 ITR 87. The appellate authority ought to have assigned some reason as to why the accounts submitted by the petitioner cannot be considered for arriving at the figure of rate of tax. The judgment referred to above by learned counsel for the parties makes it clear that the power to pass assessment order on the basis of best judgment is not an arbitrary power. It must be based on some relevant material. It must be fair and reasonable. The assessment of rate by merely observing that generally computation of profit of 9 per cent, is reasonable in medicine shop business is arbitrary and is not sustainable. The appellate authority had not disclosed as to why it has not taken in to conside....