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2015 (9) TMI 388 - CALCUTTA HIGH COURT

2015 (9) TMI 388 - CALCUTTA HIGH COURT - TMI - Validity of assessment under section 144 - Best judgment assessment - whether it was open to the assessing officer to make the assessment under section 144, otherwise than, on the basis of all relevant materials which the assessing officer had gathered after giving an opportunity to the assessee ? - Held that:- As quoted the relevant part of the order passed by the assessing officer from which it clearly appears that the assessing officer first exer .....

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rials collected by the assessing officer and allowances claimed in the defence to be taken by the assessee the assessing officer may have occasion to make disallowances. He has exercised power under section 145 because the books of accounts are not believable because the books of accounts according to him are neither correct, nor complete. If the assessing officer in such a case wishes to make an assessment under section 144, he has to make such assessment only in accordance with section 144. - .....

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he assessee. The assessee is once again in appeal before us. The assessing officer for the assessment year 2005-06 held as follows : Under the stated circumstances, considering the chronology of facts it can easily be concluded that the final account submitted by the assessee has no basis. As such the statement of account filed by the assessee along with the return is rejected u/s.145(3) since the asasessee failed to satisfy the conditions of correctness and completeness of the statement of acco .....

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rn is rejected u/s.145(3) since the assessee failed to satisfy the conditions of correctness and completeness of the statement of account by way of filing supporting evidences. As such the assessment is being completed u/s 144 in the following manner, considering the information and documents available in the record. It would appear that in both the assessment orders, the assessing officer proceeded to make the assessment under section 144 for reasons indicated above. Section 144 provides for be .....

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f them were allowed and some of them were disallowed. It is on this basis that the assessments were completed. Therefore, the question for consideration is - Whether the assessments are maintainable in law ? Mr.Khaitan, learned Senior Advocate appearing for the appellant/assessee has drawn our attention to a chart for the purpose of establishing that the assessment made is not only erroneous but far too exorbitant considering the pattern of the income assessed in the earlier years and in the sub .....

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usiness Income (% of Turnover) 10,49,300 (12.86%) 69,48,690 (22.42%) 80,27,534 (53.76%) No Assessment u/s. 143(3) 11,85,400 (3.52%) No Assessment u/s. 143(3) 14,25,320 (2.88%) No assessment u/s. 143(3) 42.38,377 (4.74%) Appeal Pending He in that regard also drew our attention to the judgement of the Apex Court in the case of Brij Bhushan Lal Parduman Kumar, Etc. v. CIT, Haryana reported in (1978)115 ITR 524 wherein the following views were expressed. It will appear clear from what has been said .....

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s to make an assessment to the best of his judgment against a person who is in default as regards supplying information. He must not act dishonestly, or vindictively or capriciously because he must exercise judgment in the matter. He must make what he honestly believes to be a fair estimate of the proper figure of assessment, and for this purpose he must, their Lordships think, be able to take into consideration local knowledge and repute in regard to the assessee s circumstances, and his own kn .....

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n be shown to have been arrived at without an honest exercise of judgment, may be revised or reviewed by the Commissioner under the powers conferred upon that official by s.33. Therefore, the question which arises for consideration is, whether it was open to the assessing officer to make the assessment under section 144, otherwise than, on the basis of all relevant materials which the assessing officer had gathered after giving an opportunity to the assessee ? Mr.Agarwal, learned advocate for th .....

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and a judgement containing a mistake do not share the same pedestal. A judgement containing a mistake may not necessarily render the judgement wrong but a wrong judgement is wrong by all means. We already have quoted the relevant part of the order passed by the assessing officer from which it clearly appears that the assessing officer first exercised his power under section 145 and thereafter, he proceeded to exercise power under section 144. Therefore, it is not possible to accept the submissio .....

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