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2017 (9) TMI 1107 - HC - Income TaxSettlement Commission order - Settlement Commission has applied the principles of best judgment - claim of bogus expenditure - Held that:- An order under Section 245(D) is not an order of regular assessment. Chapter XIXA contemplates the taxability determined with respect to undisclosed income only by the process of settlement/arbitration. The process of arrival of the liability of the assessee to pay tax under Chapter XIXA of the Act of 1961 being different to that of a regular assessment, the Settlement Commission should factor the same while considering an application for settlement. It is obliged to give reasons for arriving at a particular figure. It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission. In the facts of the present case, the Settlement Commission not having disclosed the reasons for arriving at the figures which to its best judgment are the figures to be added to the income of the private respondent, the impugned order is set aside. The settlement application is remanded to the Settlement Commission for fresh consideration. The issue is answered accordingly.
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