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2008 (11) TMI 356 - HC - Income TaxAssessment- The assessee is a contractor engaged in the work of civil construction and filed its return for the assessment year in question. The Assessing Officer made addition to the returned income mainly on account of claim for wages being found to be not verifiable. On appeal of the assessee, the Commissioner of Income-tax (Appeals) made further additions. The Tribunal directed determination of the net profit by applying a net profit rate of 12 percent. on contract receipt excluding the cost of material supplied by the department. Held that- the Tribunal proceeded on the basis that there may be unverifiable wages which may call for addition to income, but not to the extent assessed by the Commissioner (Appeals). Applying the net profit rate on the basis of best judgment assessment in a given situation would be question of fact, unless such an assessment was shown to be arbitrary or perverse. Assessment of 12 percent. of net profit rate of contrat receipt was not shown to be arbitrary and perverse.
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