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Tara Singh Prop, M/s Rajdeep Bus Service Versus ITO Ward III Khanna

2016 (3) TMI 25 - PUNJAB AND HARYANA HIGH COURT

Best judgment assessment - justification of estimation of seats - Held that:- Due to mechanical defect, accidents, over speed challan, and other traffic violations, the buses might not be plied throughout the year. Even otherwise, the tax had to be calculated on net income. The Assessing Officer and the CIT(A) had estimated the occupancy of seats to the extent of 24 and 19 per bus respectively. The Tribunal deemed it appropriate to estimate the occupancy of seats at 22 per bus to put an end to t .....

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Judgment assessment. - A perusal of the chart that only an addition of ₹ 4,75,030/- has been made against the income of ₹ 1,10,940/- declared by the assessee. However, in view of the factual matrix noticed hereinabove and more particularly when learned counsel for the assessee-appellant has not been able to satisfy this court that the approach of the Tribunal is arbitrary or irrational, no advantage flows to the assessee-appellant from those pronouncements. - Decided against asse .....

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ar 2001-02. It was admitted on 16.3.2009 to consider following substantial questions of law:- i) Whether the Assessing Officer made an assessment by estimation of income arbitrarily without any reasons or findings? ii) Whether the Hon'ble Tribunal was right in estimation of income which is 22 seats per bus without any formula and basis? iii) Whether the findings of the Assessing Officer totally based on assumption and presumption are sustainable in the eyes of law? 2. A few facts relevant fo .....

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come of ₹ 1,03,000/- alongwith the audit report. The case was selected for scrutiny as per Board's instructions. Statutory notices under section 143(2) and 142(1) of the Act were issued to the assessee. During the assessment proceedings, the assessee was issued notice under Section 142(1) of the Act on 23.2.2004 and 15.3.2004 to furnish certain details/information/clarification. The assessee did not produce and/or file the information called for in such notices regarding production of .....

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buses came to ₹ 1,05,90,840/- as against declared receipt of Rs. 77,13,524/-. It was gathered from the transport department that the said department allows breakdown of three days per month. The rebate out of bus fare equal to 36 days (12x3) was allowed and the total receipts were thus assessed at ₹ 95,46,264/-. Accordingly, an addition of Rs. 18,32,740/- was made to the returned income. Aggrieved by the assessment order, the assessee filed appeal before the Commissioner of Income Ta .....

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ued demand notice dated 17.12.2008, Annexure P.4 of ₹ 1,84,797/- giving effect to the impugned order for recovery of the tax. Hence the instant appeal by the appellant-assessee. 3. We have heard learned counsel for the parties. 4. Law in respect of best judgment assessment is well settled. The assessing authority while making the best judgment assessment should arrive at its conclusion without any bias and on rational basis. That authority should not be vindictive or capricious. If the est .....

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23.2.2004 and 15.3.2004 were issued to the assessee to which there was no response from the assessee and accordingly, the Assessing Officer passed 'Best Judgment Assessment' under Section 144 of the Act on 29.3.2004. The assessee as per profit and loss account declared total annual receipt from the bus fare at ₹ 77,13,524/-. The average receipt from all the buses on daily basis worked out to ₹ 21,133/-. In the books of account, the assessee credited amount of ₹ 19000/- .....

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pancy of 19 seats of each bus. The revenue challenged the order passed by the CIT(A) before the Tribunal. It was categorically recorded by the Tribunal that the moot question was the justification of estimation of seats. Due to mechanical defect, accidents, over speed challan, and other traffic violations, the buses might not be plied throughout the year. Even otherwise, the tax had to be calculated on net income. The Assessing Officer and the CIT(A) had estimated the occupancy of seats to the e .....

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ad failed to furnish the requisite information compelling the Assessing Officer to take recourse to Section 144 of the Act in framing the Best Judgment assessment. 6. Additionally, Annexure P.4 has been appended alongwith the appeal which is an order dated 17.12.2008 passed by the Assessing Officer giving appeal effect to the order of the Tribunal dated 25.9.2008 which reads thus:- 1. Income as returned by the assessee ₹ 1,10,940/- 2. Receipt per day per seat calculated by the AO at the ti .....

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