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2010 (5) TMI 526 - AT - Income TaxSurvey - Addition of income - Estimation of income without rejection of books of accounts - Computation of waste during manufacturing process - Held that:- We are of the view that the AO has to give a finding of fact i.e. whether or not income can properly be deduced from the accounts maintained by the assessee, even if the accounts are correct and complete to the satisfaction of the Assessing Officer and the income has been computed in accordance with the method of accounting regularly employed by the assessee. What is to be determined by the Assessing Officer in exercise of his power is a question of fact. i.e. whether or not income chargeable under the Act can properly be deduced from the books of account, and he must decide the question with reference to the relevant material and in accordance with the correct principles. Assessing Officer has not rejected the book results of the assessee in all the seven assessment years and there was no defects pointed out by the Assessing Officer, the estimation made by the AO and consequently enhancement made by the CIT(A) in four assessment years, is arbitrary and without any basis - the additions made by the Assessing Officer in these seven assessment years, including the four assessment years where the CIT(A) has enhancement the assessment deserves to be deleted.
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