TMI Blog2010 (4) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore, rejected the book results in terms of Section 145(3) of the Income Tax Act, 1961 and assessed the income @ 12% of gross foreign receipts. Net rate of 10% was applied by the Assessing Officer, to determine the income from Indian business receipts. Held that: The question as to whether the accounts produced by the assessee were defective/incomplete or not is a question of fact – CIT(A) and ITAT have found that the accounts maintained by the respondent were neither defective nor incomplete - Even the Assessing Officer has not found any fault as such with the system of accounting being followed by the assessee - non-production of formal agreements with the foreign principals would not render the accounts of the assessee incomple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrate any pattern as to uniformity of rates etc. and the expenses debited in the tour Ledger did not reconcile with the tour itinerary. He, therefore, rejected the book results in terms of Section 145(3) of the Income Tax Act, 1961 and assessed the income @ 12% of gross foreign receipts. Net rate of 10% was applied by the Assessing Officer, to determine the income from Indian business receipts. 3. In the appeal filed by the assessee, Commissioner of Income Tax(Appeals) noted that not only the notices issued under Sections 142(1), 143(2) were complied with by the assessee, all the Books of Account and vouchers etc. were also produced before the Assessing Officer, for scrutiny by him. He also found that for all intents and purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same could be changed depending upon various factors, including the number of days of the entire tour, period of stay in a particular place, the quality of hotel services provided to the tourists and frequent travel of tourists from one place to another. The Tribunal felt that the exact bill could be raised only after execution of the tour programme and, therefore, could not have been compared with the agreement or contract note with the foreign principal in order to ascertain the correct income of the assessee. 5. Section 145(3) of Act provides for assessment in the manner prescribed in Section 144 of the Act where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee or where eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee were defective/incomplete or not is a question of fact. The Commissioner of Income Tax(Appeals) as well as Income Tax Appellate Tribunal have found that the accounts maintained by the respondent were neither defective nor incomplete. Even the Assessing Officer has not found any fault as such with the system of accounting being followed by the assessee. The Tribunal which is the final fact finding authority has held that considering the nature of the business of the assessee, it was not obligatory to enter into a formal agreement with the foreign principal. Hence, non-production of formal agreements with the foreign principals would not render the accounts of the assessee incomplete and would not give justification to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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