TMI Blog1993 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ignoring the market realities and in face of the fact as admitted by the Income-tax Appellate Tribunal in its order that the sales were undisputedly unverifiable and also there was no restriction of the State Government or any other authority in charging any sale price ? 2. Whether in view of the ratio of the decision of the Supreme Court in the case of CIT v. S. P. Jain [1973] 87 ITR 370 (381), the Tribunal was correct in law in resorting to ad hocism and deviating from its own accepted formula for years for estimating the profit of the assessee who is a liquor contractor especially when the applicability of the provisions of section 145(2) is not disputed ?" Having heard learned counsel for the parties, in our opinion, the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Revenue there after filed an application under section 256(1) of the Act which also met with the same fate. It is in this background that the present application has been made with the prayer referred to earlier. It is evident that the controversy for consideration before the Income-tax Appellate Tribunal was as to what should be the correct figure of estimated income on which the assessee should be made liable to tax for the assessment in question. Now section 145(2) of the Act empowers the Assessing Officer to determine the income to the best of his judgment in the manner provided under section 144 of the Act on his not being satisfied about the correctness and completeness of the accounts of the assessee or where no method of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuation with which the Income-tax Appellate Tribunal was confronted, it cannot be disputed that there can be no rigid tailor-made formula which can be applied to every case. Everything would depend on the facts and circumstances of each case. The finding in a given case about the applicability of a particular rate of net profit on the sales disclosed or estimated is one of fact. In other words, in cases of assessment at a flat rate of profit, the rate to be applied does not raise a question of law. Likewise an estimate of turnover of sale would also normally not give rise to a question of law except in exceptional circumstances. In every case of best judgment, the element of guess work cannot be eliminated. So long as the best judgment has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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